ML Analysis — SOUTHERN REGIONAL MEDICAL CORP
CCN 190183 | 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.
46
/ 100 (C)
Financial Health4/25
RCM Upside19/25
Market Position13/20
Demand Defensibility5/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-26.3%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-54.6%, 2.0%]. P15 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2813162.859 | -0.1424 | Higher Expense/Bed decreases predicted margin | |
| Reimbursement Quality | 0.439 | -0.0684 | Higher Reimbursement Quality decreases predicted m | |
| Net-to-Gross | 0.542 | +0.0194 | Higher Net-to-Gross increases predicted margin | |
| Bed Utilization Value | 372637.094 | -0.0166 | Lower Bed Utilization Value decreases predicted ma | |
| Occupancy | 0.245 | -0.0159 | Lower Occupancy decreases predicted margin |
Turnaround: 14%Low turnaround probability (14%). Structural disadvantages in Expense/Bed and Reimbursement Quality.
Under-Performing / Distre
Archetype
55.0%
Distress Risk
$3.0M
RCM Opportunity
D
Opportunity Grade
-46.9%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P54. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: High
National distress rate: 49.3%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.245 | +0.260 | ▲ risk |
| Medicaid Day Pct | 0.012 | -0.077 | ▼ risk |
| Net To Gross Ratio | 0.542 | +0.077 | ▲ risk |
| Medicare Day Pct | 0.178 | -0.026 | ▼ risk |
| Beds | 64.000 | -0.011 | ▼ risk |
| Revenue Per Bed | 1519958.531 | +0.004 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.0M
Current margin: -50.0%
Projected margin: -46.9%
Grade: D
Comps: 76
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.245 | 0.688 | 44.3% | $2.9M | 55% | 24mo |
| Payer Mix Optimization | 0.811 | 0.818 | 0.8% | $112K | 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 | 33.0 | [25.0, 75.0] | P74 | 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%] | P7 | Strong — predicted net collection rate is in the top third. |