ML Analysis — ST. LUKES JEROME LTD
CCN 131310 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Hold / Selective — investigate specific opportunities but be prepared for execution risk.
49
/ 100 (C)
Financial Health5/25
RCM Upside17/25
Market Position13/20
Demand Defensibility8/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-8.2%
R²=0.34 | n=4,907 | Grade B | Actual: -2.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-36.5%, 20.1%]. P42 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1173774.000 | -0.0566 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1199377.706 | +0.0564 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 2.833 | -0.0358 | Lower Log(Beds) decreases predicted margin | |
| Net-to-Gross | 0.602 | +0.0262 | Higher Net-to-Gross increases predicted margin | |
| Bed Count | 17.000 | +0.0206 | Higher Bed Count increases predicted margin |
Turnaround: 36%Turnaround possible (36%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
58.0%
Distress Risk
$2.4M
RCM Opportunity
B
Opportunity Grade
9.9%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P67. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PROMEDICA HICKMAN HOSPITAL | MI | 58 |
| WATAUGA MEDICAL CENTER | NC | 95 |
| ST LUKES HOSPITAL - EASTON CAMPUS | PA | 29 |
| CULPEPER MEMORIAL HOSPITAL | VA | 70 |
| SOUTHSIDE COMMUNITY HOSPITAL | VA | 80 |
| SPECTRUM HEALTH LUDINGTON | MI | 45 |
Distress Analysis
Risk: High
National distress rate: 49.3%
ID distress rate: 46.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.405 | +0.112 | ▲ risk |
| Net To Gross Ratio | 0.602 | +0.104 | ▲ risk |
| Medicaid Day Pct | 0.193 | +0.104 | ▲ risk |
| Medicare Day Pct | 0.469 | +0.024 | ▲ risk |
| Revenue Per Bed | 1173774.000 | +0.024 | ▲ risk |
| Beds | 17.000 | -0.018 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.4M
Current margin: -2.2%
Projected margin: 9.9%
Grade: B
Comps: 29
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.339 | 0.485 | 14.7% | $2.2M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.602 | 0.691 | 8.9% | $207K | 65% | 18mo |
Predicted RCM Performance (Public Data Only)
A
RCM Grade
Strong RCM profile — likely low-risk from an operations perspective. Focus diligence on growth thesis.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 2.0% | [2.0%, 25.0%] | P0 | Strong — predicted denial rate is in the top third nationall |
| Days in AR | 29.9 | [25.0, 75.0] | P57 | Strong — predicted days in ar is in the top third nationally |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.5% | [90.0%, 99.5%] | P8 | Strong — predicted net collection rate is in the top third. |