ML Analysis — MEMORIAL HOSPITAL EAST
CCN 140307 | 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.
45
/ 100 (C)
Financial Health4/25
RCM Upside19/25
Market Position13/20
Demand Defensibility8/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-7.9%
R²=0.34 | n=4,907 | Grade B | Actual: -7.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-36.2%, 20.4%]. P42 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 980428.138 | -0.0836 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1057178.989 | +0.0739 | Higher Expense/Bed increases predicted margin | |
| Net-to-Gross | 0.212 | -0.0175 | Lower Net-to-Gross decreases predicted margin | |
| Reimbursement Quality | 0.148 | +0.0155 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 477276.202 | -0.0131 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 36%Turnaround possible (36%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
47.9%
Distress Risk
$3.8M
RCM Opportunity
D
Opportunity Grade
-3.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P24. 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: Elevated
National distress rate: 49.3%
IL distress rate: 51.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.212 | -0.070 | ▼ risk |
| Medicaid Day Pct | 0.049 | -0.039 | ▼ risk |
| Occupancy Rate | 0.487 | +0.036 | ▲ risk |
| Revenue Per Bed | 980428.138 | +0.035 | ▲ risk |
| Medicare Day Pct | 0.254 | -0.012 | ▼ risk |
| Beds | 94.000 | -0.007 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.8M
Current margin: -7.8%
Projected margin: -3.7%
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 | 0.212 | 0.383 | 17.1% | $1.8M | 65% | 18mo |
| Occupancy Improvement | 0.487 | 0.689 | 20.2% | $1.3M | 55% | 24mo |
| Payer Mix Optimization | 0.696 | 0.739 | 4.3% | $651K | 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 | 27.9 | [25.0, 75.0] | P43 | 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. |