ML Analysis — MERCY HEALTH LOURDES HOSPITAL LLC
CCN 180102 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
60
/ 100 (B)
Financial Health17/25
RCM Upside10/25
Market Position15/20
Demand Defensibility12/15
Operational Efficiency5/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
2.8%
R²=0.34 | n=4,907 | Grade B | Actual: 7.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-25.5%, 31.1%]. P69 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | -0.006 | +0.0295 | Higher State Peer Margin increases predicted margi | |
| Expense/Bed | 1493368.427 | +0.0202 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 5.182 | +0.0188 | Higher Log(Beds) increases predicted margin | |
| Net-to-Gross | 0.229 | -0.0156 | Lower Net-to-Gross decreases predicted margin | |
| Reimbursement Quality | 0.153 | +0.0141 | Higher Reimbursement Quality increases predicted m |
Suburban Community Hospit
Archetype
43.3%
Distress Risk
$5.9M
RCM Opportunity
D
Opportunity Grade
9.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P21. 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 |
|---|---|---|---|
| Occupancy Rate | 0.637 | -0.104 | ▼ risk |
| Medicaid Day Pct | 0.009 | -0.080 | ▼ risk |
| Net To Gross Ratio | 0.229 | -0.062 | ▼ risk |
| Beds | 178.000 | +0.004 | ▲ risk |
| Revenue Per Bed | 1618468.124 | -0.002 | ▼ risk |
| Medicare Day Pct | 0.326 | -0.000 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.9M
Current margin: 7.7%
Projected margin: 9.8%
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 | 0.229 | 0.346 | 11.7% | $3.9M | 65% | 18mo |
| Payer Mix Optimization | 0.665 | 0.795 | 12.9% | $1.9M | 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 | 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. |