ML Analysis — HENDRICKS REGIONAL HEALTH
CCN 150005 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
65
/ 100 (B)
Financial Health12/25
RCM Upside18/25
Market Position15/20
Demand Defensibility9/15
Operational Efficiency10/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
2.1%
R²=0.34 | n=4,907 | Grade B | Actual: -3.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-26.2%, 30.4%]. P67 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 3256714.792 | +0.2342 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 3373722.415 | -0.2115 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.011 | +0.0255 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 1608727.882 | +0.0244 | Higher Bed Utilization Value increases predicted m | |
| Reimbursement Quality | 0.243 | -0.0119 | Higher Reimbursement Quality decreases predicted m |
Turnaround: 54%Turnaround possible (54%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
45.6%
Distress Risk
$1.9M
RCM Opportunity
D
Opportunity Grade
-3.1%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P40. 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 | 3256714.792 | -0.099 | ▼ risk |
| Medicaid Day Pct | 0.027 | -0.062 | ▼ risk |
| Occupancy Rate | 0.494 | +0.029 | ▲ risk |
| Medicare Day Pct | 0.286 | -0.007 | ▼ risk |
| Net To Gross Ratio | 0.353 | -0.007 | ▼ risk |
| Beds | 130.000 | -0.003 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.9M
Current margin: -3.6%
Projected margin: -3.1%
Grade: D
Comps: 53
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.494 | 0.683 | 18.9% | $1.2M | 55% | 24mo |
| Payer Mix Optimization | 0.687 | 0.729 | 4.2% | $623K | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |