ML Analysis — ENCOMPASS HEALTH REHABILITATION INST
CCN 143031 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
42
/ 100 (D)
Financial Health5/25
RCM Upside19/25
Market Position9/20
Demand Defensibility5/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-8.7%
R²=0.34 | n=4,907 | Grade B | Actual: -19.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-37.0%, 19.6%]. P40 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 245000.750 | -0.1863 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 293840.483 | +0.1680 | Higher Expense/Bed increases predicted margin | |
| Bed Utilization Value | 85455.967 | -0.0261 | Lower Bed Utilization Value decreases predicted ma | |
| Net-to-Gross | 0.570 | +0.0226 | Higher Net-to-Gross increases predicted margin | |
| Bed Count | 60.000 | +0.0138 | Higher Bed Count increases predicted margin |
Turnaround: 35%Turnaround possible (35%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Rural/Critical Access
Archetype
56.9%
Distress Risk
$6.1M
RCM Opportunity
A
Opportunity Grade
21.2%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P16. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
IL distress rate: 51.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.349 | +0.164 | ▲ risk |
| Net To Gross Ratio | 0.570 | +0.090 | ▲ risk |
| Revenue Per Bed | 245000.750 | +0.079 | ▲ risk |
| Medicaid Day Pct | 0.017 | -0.071 | ▼ risk |
| Medicare Day Pct | 0.642 | +0.054 | ▲ risk |
| Beds | 60.000 | -0.012 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.1M
Current margin: -19.9%
Projected margin: 21.2%
Grade: A
Comps: 52
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 | 0.341 | 0.650 | 30.9% | $4.6M | 50% | 24mo |
| Occupancy Improvement | 0.349 | 0.564 | 21.5% | $1.4M | 55% | 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 | 28.9 | [25.0, 75.0] | P50 | 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. |