ML Analysis — REHABILITATION HOSPITAL OF NORTHERN
CCN 153047 | 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.
48
/ 100 (C)
Financial Health3/25
RCM Upside19/25
Market Position13/20
Demand Defensibility9/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-7.4%
R²=0.34 | n=4,907 | Grade B | Actual: -8.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.7%, 20.9%]. P43 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 349893.425 | -0.1716 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 379579.350 | +0.1574 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.491 | -0.0832 | Higher Reimbursement Quality decreases predicted m | |
| Net-to-Gross | 0.803 | +0.0487 | Higher Net-to-Gross increases predicted margin | |
| State Peer Margin | -0.011 | +0.0255 | Higher State Peer Margin increases predicted margi |
Turnaround: 37%Turnaround possible (37%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
53.2%
Distress Risk
$1.6M
RCM Opportunity
B
Opportunity Grade
3.0%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P47. 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: High
National distress rate: 49.3%
IN distress rate: 42.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.803 | +0.194 | ▲ risk |
| Medicaid Day Pct | 0.002 | -0.087 | ▼ risk |
| Revenue Per Bed | 349893.425 | +0.073 | ▲ risk |
| Occupancy Rate | 0.548 | -0.021 | ▼ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
| Medicare Day Pct | 0.387 | +0.010 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.6M
Current margin: -8.5%
Projected margin: 3.0%
Grade: B
Comps: 90
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 | 0.611 | 0.686 | 7.5% | $1.1M | 50% | 24mo |
| Occupancy Improvement | 0.548 | 0.620 | 7.2% | $476K | 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 | 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. |