ML Analysis — SPECIALTY HOSPITAL
CCN 192016 | 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.
50
/ 100 (C)
Financial Health9/25
RCM Upside13/25
Market Position13/20
Demand Defensibility10/15
Operational Efficiency5/15
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)
-6.7%
R²=0.34 | n=4,907 | Grade B | Actual: 4.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.0%, 21.6%]. P45 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 319581.812 | -0.1758 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 304547.750 | +0.1666 | Higher Expense/Bed increases predicted margin | |
| Bed Utilization Value | 205566.623 | -0.0221 | Lower Bed Utilization Value decreases predicted ma | |
| Log(Beds) | 3.466 | -0.0211 | Lower Log(Beds) decreases predicted margin | |
| Bed Count | 32.000 | +0.0182 | Higher Bed Count increases predicted margin |
Suburban Community Hospit
Archetype
47.3%
Distress Risk
$4.4M
RCM Opportunity
A
Opportunity Grade
48.1%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P50. 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 | 0.643 | -0.110 | ▼ risk |
| Revenue Per Bed | 319581.812 | +0.074 | ▲ risk |
| Medicaid Day Pct | 0.027 | -0.062 | ▼ risk |
| Medicare Day Pct | 0.479 | +0.026 | ▲ risk |
| Beds | 32.000 | -0.016 | ▼ risk |
| Net To Gross Ratio | 0.385 | +0.007 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.4M
Current margin: 4.7%
Projected margin: 48.1%
Grade: A
Comps: 134
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 | 0.495 | 0.753 | 25.8% | $3.9M | 50% | 24mo |
| Occupancy Improvement | 0.643 | 0.698 | 5.4% | $359K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.385 | 0.561 | 17.6% | $211K | 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 | 28.3 | [25.0, 75.0] | P45 | 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. |