ML Analysis — DEACONESS HENDERSON HOSPITAL
CCN 180056 | 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 Health15/25
RCM Upside10/25
Market Position15/20
Demand Defensibility8/15
Operational Efficiency7/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-4.7%
R²=0.34 | n=4,907 | Grade B | Actual: 6.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.0%, 23.6%]. P50 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1012034.008 | +0.0795 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 1078799.847 | -0.0699 | Lower Revenue/Bed decreases predicted margin | |
| State Peer Margin | -0.006 | +0.0295 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 320759.481 | -0.0183 | Lower Bed Utilization Value decreases predicted ma | |
| Occupancy | 0.297 | -0.0129 | Lower Occupancy decreases predicted margin |
Suburban Community Hospit
Archetype
52.8%
Distress Risk
$6.0M
RCM Opportunity
D
Opportunity Grade
10.9%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P37. 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%
KY distress rate: 45.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.297 | +0.211 | ▲ risk |
| Medicaid Day Pct | 0.019 | -0.070 | ▼ risk |
| Revenue Per Bed | 1078799.847 | +0.030 | ▲ risk |
| Net To Gross Ratio | 0.330 | -0.017 | ▼ risk |
| Medicare Day Pct | 0.254 | -0.012 | ▼ risk |
| Beds | 118.000 | -0.004 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.0M
Current margin: 6.2%
Projected margin: 10.9%
Grade: D
Comps: 41
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.297 | 0.664 | 36.6% | $2.4M | 55% | 24mo |
| Payer Mix Optimization | 0.727 | 0.859 | 13.2% | $2.0M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.330 | 0.439 | 10.9% | $1.6M | 65% | 18mo |
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 | 25.5 | [25.0, 75.0] | P30 | 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. |