ML Analysis — ST. LUKES SOUTH
CCN 170185 | 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.
49
/ 100 (C)
Financial Health5/25
RCM Upside20/25
Market Position9/20
Demand Defensibility11/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-13.8%
R²=0.34 | n=4,907 | Grade B | Actual: -13.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-42.1%, 14.5%]. P30 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2713141.429 | -0.1301 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 2398091.407 | +0.1143 | Higher Revenue/Bed increases predicted margin | |
| State Peer Margin | -0.177 | -0.0972 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.120 | +0.0233 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.211 | -0.0177 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 27%Low turnaround probability (27%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Suburban Community Hospit
Archetype
44.3%
Distress Risk
$4.6M
RCM Opportunity
D
Opportunity Grade
-11.0%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P38. 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%
KS distress rate: 76.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.211 | -0.070 | ▼ risk |
| Medicaid Day Pct | 0.024 | -0.065 | ▼ risk |
| Revenue Per Bed | 2398091.407 | -0.048 | ▼ risk |
| Occupancy Rate | 0.549 | -0.022 | ▼ risk |
| Medicare Day Pct | 0.405 | +0.013 | ▲ risk |
| Beds | 91.000 | -0.008 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.6M
Current margin: -13.1%
Projected margin: -11.0%
Grade: D
Comps: 26
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 | 0.211 | 0.385 | 17.4% | $4.4M | 65% | 18mo |
| Payer Mix Optimization | 0.572 | 0.585 | 1.3% | $200K | 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 | 27.8 | [25.0, 75.0] | P43 | 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. |