ML Analysis — MERITUS MEDICAL CENTER
CCN 210001 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
62
/ 100 (B)
Financial Health11/25
RCM Upside14/25
Market Position15/20
Demand Defensibility15/15
Operational Efficiency7/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-3.7%
R²=0.34 | n=4,907 | Grade B | Actual: 1.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-32.0%, 24.6%]. P53 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Reimbursement Quality | 0.411 | -0.0604 | Higher Reimbursement Quality decreases predicted m | |
| Net-to-Gross | 0.813 | +0.0498 | Higher Net-to-Gross increases predicted margin | |
| State Peer Margin | -0.084 | -0.0281 | Lower State Peer Margin decreases predicted margin | |
| Log(Beds) | 5.580 | +0.0280 | Higher Log(Beds) increases predicted margin | |
| Occupancy × Net-to-Gross | 0.562 | +0.0280 | Higher Occupancy × Net-to-Gross increases predicte |
Suburban Community Hospit
Archetype
50.8%
Distress Risk
$3.3M
RCM Opportunity
D
Opportunity Grade
2.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P29. 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: High
National distress rate: 49.3%
MD distress rate: 60.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.813 | +0.198 | ▲ risk |
| Occupancy Rate | 0.691 | -0.154 | ▼ risk |
| Medicaid Day Pct | 0.066 | -0.023 | ▼ risk |
| Medicare Day Pct | 0.427 | +0.017 | ▲ risk |
| Beds | 265.000 | +0.016 | ▲ risk |
| Revenue Per Bed | 1495120.981 | +0.005 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.3M
Current margin: 1.6%
Projected margin: 2.4%
Grade: D
Comps: 32
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 | 0.813 | 0.850 | 3.8% | $1.7M | 65% | 18mo |
| Payer Mix Optimization | 0.506 | 0.567 | 6.1% | $913K | 50% | 24mo |
| Occupancy Improvement | 0.691 | 0.786 | 9.5% | $625K | 55% | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |