ML Analysis — ST. MARGARETS HEALTH - PERU
CCN 140234 | 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.
50
/ 100 (C)
Financial Health5/25
RCM Upside19/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-15.4%
R²=0.34 | n=4,907 | Grade B | Actual: -33.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-43.7%, 12.9%]. P27 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1321401.775 | -0.0360 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.137 | +0.0187 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 360180.803 | -0.0170 | Lower Bed Utilization Value decreases predicted ma | |
| Bed Count | 49.000 | +0.0156 | Higher Bed Count increases predicted margin | |
| Occupancy | 0.273 | -0.0144 | Lower Occupancy decreases predicted margin |
Turnaround: 25%Low turnaround probability (25%). Structural disadvantages in Revenue/Bed and Reimbursement Quality.
Under-Performing / Distre
Archetype
55.7%
Distress Risk
$3.7M
RCM Opportunity
D
Opportunity Grade
-28.0%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P12. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: High
National distress rate: 49.3%
IL distress rate: 51.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.273 | +0.234 | ▲ risk |
| Medicaid Day Pct | 0.141 | +0.052 | ▲ risk |
| Net To Gross Ratio | 0.279 | -0.040 | ▼ risk |
| Revenue Per Bed | 1321401.776 | +0.015 | ▲ risk |
| Beds | 49.000 | -0.013 | ▼ risk |
| Medicare Day Pct | 0.370 | +0.007 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.7M
Current margin: -33.7%
Projected margin: -28.0%
Grade: D
Comps: 78
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.279 | 0.485 | 20.6% | $1.6M | 65% | 18mo |
| Occupancy Improvement | 0.273 | 0.449 | 17.6% | $1.2M | 55% | 24mo |
| Payer Mix Optimization | 0.489 | 0.551 | 6.2% | $935K | 50% | 24mo |
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 | 33.0 | [25.0, 75.0] | P74 | 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. |