ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 183027 | 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.
58
/ 100 (C)
Financial Health15/25
RCM Upside8/25
Market Position15/20
Demand Defensibility12/15
Operational Efficiency9/15
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)
-0.3%
R²=0.34 | n=4,907 | Grade B | Actual: 10.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-28.6%, 28.0%]. P62 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 471784.944 | -0.1546 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 422911.338 | +0.1521 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.361 | -0.0459 | Higher Reimbursement Quality decreases predicted m | |
| Net-to-Gross | 0.675 | +0.0343 | Higher Net-to-Gross increases predicted margin | |
| State Peer Margin | -0.006 | +0.0295 | Higher State Peer Margin increases predicted margi |
Suburban Community Hospit
Archetype
46.4%
Distress Risk
$3.5M
RCM Opportunity
B
Opportunity Grade
20.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P71. 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 | 0.798 | -0.253 | ▼ risk |
| Net To Gross Ratio | 0.675 | +0.136 | ▲ risk |
| Medicaid Day Pct | 0.010 | -0.079 | ▼ risk |
| Revenue Per Bed | 471784.944 | +0.065 | ▲ risk |
| Medicare Day Pct | 0.455 | +0.022 | ▲ risk |
| Beds | 71.000 | -0.010 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.5M
Current margin: 10.4%
Projected margin: 20.8%
Grade: B
Comps: 49
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.535 | 0.768 | 23.3% | $3.5M | 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. |