ML Analysis — CORNERSTONE SPECIALTY SOUTHWEST LOUI
CCN 192013 | 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 Health9/25
RCM Upside14/25
Market Position15/20
Demand Defensibility8/15
Operational Efficiency1/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-5.7%
R²=0.34 | n=4,907 | Grade B | Actual: 3.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-34.0%, 22.6%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 463308.679 | -0.1558 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 446957.000 | +0.1491 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.082 | +0.0343 | Higher Reimbursement Quality increases predicted m | |
| Log(Beds) | 3.332 | -0.0242 | Lower Log(Beds) decreases predicted margin | |
| Net-to-Gross | 0.183 | -0.0208 | Lower Net-to-Gross decreases predicted margin |
Suburban Community Hospit
Archetype
42.9%
Distress Risk
$4.8M
RCM Opportunity
A
Opportunity Grade
40.9%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P74. 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%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.724 | -0.185 | ▼ risk |
| Net To Gross Ratio | 0.183 | -0.083 | ▼ risk |
| Medicaid Day Pct | 0.010 | -0.079 | ▼ risk |
| Revenue Per Bed | 463308.679 | +0.066 | ▲ risk |
| Medicare Day Pct | 0.542 | +0.037 | ▲ risk |
| Beds | 28.000 | -0.016 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.8M
Current margin: 3.5%
Projected margin: 40.9%
Grade: A
Comps: 135
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 | 0.449 | 0.731 | 28.3% | $4.2M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.183 | 0.581 | 39.8% | $605K | 65% | 18mo |
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 | 30.6 | [25.0, 75.0] | P63 | 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. |