ML Analysis — BAPTIST HEALTH MADISONVILLE
CCN 180093 | 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.
55
/ 100 (C)
Financial Health10/25
RCM Upside19/25
Market Position15/20
Demand Defensibility10/15
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
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.5%
R²=0.34 | n=4,907 | Grade B | Actual: -5.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.8%, 26.8%]. P58 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | -0.006 | +0.0295 | Higher State Peer Margin increases predicted margi | |
| Reimbursement Quality | 0.120 | +0.0234 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.161 | -0.0233 | Lower Net-to-Gross decreases predicted margin | |
| Revenue/Bed | 1428895.883 | -0.0210 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1510345.292 | +0.0181 | Higher Expense/Bed increases predicted margin |
Turnaround: 47%Turnaround possible (47%) but uncertain. Margin improvement depends on State Peer Margin.
Suburban Community Hospit
Archetype
44.7%
Distress Risk
$8.0M
RCM Opportunity
D
Opportunity Grade
-2.1%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P31. 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%
KY distress rate: 45.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.161 | -0.093 | ▼ risk |
| Medicaid Day Pct | 0.012 | -0.076 | ▼ risk |
| Medicare Day Pct | 0.240 | -0.015 | ▼ risk |
| Occupancy Rate | 0.536 | -0.010 | ▼ risk |
| Revenue Per Bed | 1428895.883 | +0.009 | ▲ risk |
| Beds | 154.000 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.0M
Current margin: -5.7%
Projected margin: -2.1%
Grade: D
Comps: 35
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 | 0.161 | 0.394 | 23.3% | $6.0M | 65% | 18mo |
| Payer Mix Optimization | 0.748 | 0.840 | 9.2% | $1.4M | 50% | 24mo |
| Occupancy Improvement | 0.536 | 0.629 | 9.3% | $614K | 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 | 26.1 | [25.0, 75.0] | P35 | 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. |