ML Analysis — MERCY MEDICAL CENTER-DES MOINES
CCN 160083 | 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.
56
/ 100 (C)
Financial Health9/25
RCM Upside19/25
Market Position13/20
Demand Defensibility13/15
Operational Efficiency2/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-10.0%
R²=0.34 | n=4,907 | Grade B | Actual: -5.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-38.3%, 18.3%]. P37 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Bed Count | 556.000 | -0.0635 | Higher Bed Count decreases predicted margin | |
| Revenue/Bed | 1143438.516 | -0.0608 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1208465.191 | +0.0553 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 6.321 | +0.0452 | Higher Log(Beds) increases predicted margin | |
| State Peer Margin | -0.082 | -0.0269 | Lower State Peer Margin decreases predicted margin |
Turnaround: 33%Turnaround possible (33%) but uncertain. Margin improvement depends on improving Bed Count.
Suburban Community Hospit
Archetype
44.0%
Distress Risk
$11.1M
RCM Opportunity
D
Opportunity Grade
-4.0%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P65. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
IA distress rate: 67.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.732 | -0.192 | ▼ risk |
| Net To Gross Ratio | 0.197 | -0.077 | ▼ risk |
| Beds | 556.000 | +0.055 | ▲ risk |
| Revenue Per Bed | 1143438.516 | +0.026 | ▲ risk |
| Medicaid Day Pct | 0.074 | -0.015 | ▼ risk |
| Medicare Day Pct | 0.251 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $11.1M
Current margin: -5.7%
Projected margin: -4.0%
Grade: D
Comps: 796
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 | 0.197 | 0.321 | 12.5% | $9.3M | 65% | 18mo |
| Payer Mix Optimization | 0.675 | 0.758 | 8.3% | $1.3M | 50% | 24mo |
| Occupancy Improvement | 0.732 | 0.812 | 8.1% | $532K | 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. |