ML Analysis — THE GENERAL
CCN 190316 | 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.
47
/ 100 (C)
Financial Health4/25
RCM Upside17/25
Market Position15/20
Demand Defensibility6/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-11.0%
R²=0.34 | n=4,907 | Grade B | Actual: -2.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.3%, 17.3%]. P35 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 313906.916 | -0.1766 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 322437.140 | +0.1644 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.358 | -0.0449 | Higher Reimbursement Quality decreases predicted m | |
| Bed Utilization Value | 103692.565 | -0.0255 | Lower Bed Utilization Value decreases predicted ma | |
| Occupancy | 0.330 | -0.0111 | Lower Occupancy decreases predicted margin |
Turnaround: 32%Turnaround possible (32%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
53.8%
Distress Risk
$2.8M
RCM Opportunity
C
Opportunity Grade
5.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P68. 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%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.330 | +0.181 | ▲ risk |
| Medicaid Day Pct | 0.012 | -0.077 | ▼ risk |
| Revenue Per Bed | 313906.916 | +0.075 | ▲ risk |
| Net To Gross Ratio | 0.440 | +0.032 | ▲ risk |
| Medicare Day Pct | 0.175 | -0.026 | ▼ risk |
| Beds | 107.000 | -0.006 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.8M
Current margin: -2.7%
Projected margin: 5.6%
Grade: C
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 | 0.330 | 0.684 | 35.4% | $2.3M | 55% | 24mo |
| Payer Mix Optimization | 0.813 | 0.844 | 3.1% | $465K | 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 | 25.5 | [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. |