ML Analysis — PAM II OF COVINGTON
CCN 192048 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
35
/ 100 (D)
Financial Health9/25
RCM Upside13/25
Market Position4/20
Demand Defensibility6/15
Operational Efficiency3/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
Catalysts:
Margin Prediction (Trained Ridge Model)
-4.1%
R²=0.34 | n=4,907 | Grade B | Actual: 4.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-32.4%, 24.2%]. P51 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 651673.226 | -0.1295 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 619519.742 | +0.1278 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 3.434 | -0.0218 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.127 | +0.0214 | Higher Reimbursement Quality increases predicted m | |
| Bed Count | 31.000 | +0.0184 | Higher Bed Count increases predicted margin |
nan%
Distress Risk
$6.5M
RCM Opportunity
A
Opportunity Grade
36.9%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.651 | -0.117 | ▼ risk |
| Medicare Day Pct | 0.625 | +0.051 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Revenue Per Bed | 651673.226 | +0.055 | ▲ risk |
| Beds | 31.000 | -0.016 | ▼ risk |
| Net To Gross Ratio | 0.338 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.5M
Current margin: 4.9%
Projected margin: 36.9%
Grade: A
Comps: 132
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 | 0.375 | 0.749 | 37.4% | $5.6M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.338 | 0.563 | 22.5% | $532K | 65% | 18mo |
| Occupancy Improvement | 0.651 | 0.698 | 4.7% | $311K | 55% | 24mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |