ML Analysis — FRANCISCAN HEALTH HAMMOND
CCN 150004 | 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.
55
/ 100 (C)
Financial Health12/25
RCM Upside19/25
Market Position9/20
Demand Defensibility7/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
8.5%
R²=0.34 | n=4,907 | Grade B | Actual: -4.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-19.8%, 36.8%]. P80 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 11767055.100 | +1.4221 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 12272709.300 | -1.3077 | Higher Expense/Bed decreases predicted margin | |
| Bed Utilization Value | 2711258.449 | +0.0610 | Higher Bed Utilization Value increases predicted m | |
| Log(Beds) | 2.303 | -0.0481 | Lower Log(Beds) decreases predicted margin | |
| State Peer Margin | -0.011 | +0.0255 | Higher State Peer Margin increases predicted margi |
Turnaround: 65%Model predicts 65% probability of positive margin. Key drivers: Revenue/Bed and Expense/Bed.
Suburban Community Hospit
Archetype
41.2%
Distress Risk
$11.9M
RCM Opportunity
B
Opportunity Grade
5.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P100. 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%
IN distress rate: 42.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 11767055.100 | -0.601 | ▼ risk |
| Occupancy Rate | 0.230 | +0.274 | ▲ risk |
| Medicaid Day Pct | 0.139 | +0.050 | ▲ risk |
| Net To Gross Ratio | 0.266 | -0.046 | ▼ risk |
| Beds | 10.000 | -0.019 | ▼ risk |
| Medicare Day Pct | 0.395 | +0.012 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $11.9M
Current margin: -4.3%
Projected margin: 5.8%
Grade: B
Comps: 19
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 | 0.466 | 0.824 | 35.8% | $5.4M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.266 | 0.609 | 34.4% | $4.7M | 65% | 18mo |
| Occupancy Improvement | 0.230 | 0.506 | 27.5% | $1.8M | 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 | 35.3 | [25.0, 75.0] | P79 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 98.9% | [90.0%, 99.5%] | P4 | Strong — predicted net collection rate is in the top third. |