ML Analysis — UPMC-WESTERN MARYLAND CORP
CCN 210027 | 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.
56
/ 100 (C)
Financial Health9/25
RCM Upside20/25
Market Position11/20
Demand Defensibility10/15
Operational Efficiency6/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-3.0%
R²=0.34 | n=4,907 | Grade B | Actual: -12.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-31.3%, 25.3%]. P55 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Net-to-Gross | 0.770 | +0.0450 | Higher Net-to-Gross increases predicted margin | |
| State Peer Margin | -0.084 | -0.0281 | Lower State Peer Margin decreases predicted margin | |
| Occupancy × Net-to-Gross | 0.495 | +0.0230 | Higher Occupancy × Net-to-Gross increases predicte | |
| Log(Beds) | 5.298 | +0.0215 | Higher Log(Beds) increases predicted margin | |
| Commercial % | 0.221 | -0.0148 | Lower Commercial % decreases predicted margin |
Turnaround: 45%Turnaround possible (45%) but uncertain. Margin improvement depends on Net-to-Gross.
Suburban Community Hospit
Archetype
55.3%
Distress Risk
$8.9M
RCM Opportunity
D
Opportunity Grade
-9.2%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P92. 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: High
National distress rate: 49.3%
MD distress rate: 60.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.770 | +0.179 | ▲ risk |
| Medicaid Day Pct | 0.207 | +0.118 | ▲ risk |
| Occupancy Rate | 0.643 | -0.109 | ▼ risk |
| Medicare Day Pct | 0.572 | +0.042 | ▲ risk |
| Beds | 200.000 | +0.007 | ▲ risk |
| Revenue Per Bed | 1562262.110 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.9M
Current margin: -12.1%
Projected margin: -9.2%
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 |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.221 | 0.551 | 33.0% | $4.9M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.770 | 0.852 | 8.2% | $3.0M | 65% | 18mo |
| Occupancy Improvement | 0.643 | 0.786 | 14.4% | $948K | 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. |