ML Analysis — THE AROOSTOOK MEDICAL CENTER
CCN 200018 | 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.
57
/ 100 (C)
Financial Health7/25
RCM Upside21/25
Market Position13/20
Demand Defensibility8/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
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: -23.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-34.0%, 22.6%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 4896268.353 | -0.3990 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 3964730.471 | +0.3330 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 3406281.731 | +0.0840 | Higher Bed Utilization Value increases predicted m | |
| State Peer Margin | -0.083 | -0.0278 | Lower State Peer Margin decreases predicted margin | |
| Log(Beds) | 3.526 | -0.0197 | Lower Log(Beds) decreases predicted margin |
Turnaround: 40%Turnaround possible (40%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
38.6%
Distress Risk
$4.2M
RCM Opportunity
D
Opportunity Grade
-20.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P94. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
ME distress rate: 61.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.859 | -0.310 | ▼ risk |
| Revenue Per Bed | 3964730.471 | -0.141 | ▼ risk |
| Medicaid Day Pct | 0.152 | +0.063 | ▲ risk |
| Net To Gross Ratio | 0.308 | -0.027 | ▼ risk |
| Beds | 34.000 | -0.015 | ▼ risk |
| Medicare Day Pct | 0.276 | -0.009 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.2M
Current margin: -23.5%
Projected margin: -20.4%
Grade: D
Comps: 24
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.308 | 0.567 | 25.9% | $4.1M | 65% | 18mo |
| Payer Mix Optimization | 0.572 | 0.579 | 0.7% | $99K | 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 | 29.4 | [25.0, 75.0] | P53 | 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. |