ML Analysis — MEMORIAL EASTON
CCN 210037 | 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.
60
/ 100 (C)
Financial Health9/25
RCM Upside18/25
Market Position14/20
Demand Defensibility10/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.2%
R²=0.34 | n=4,907 | Grade B | Actual: -4.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.5%, 27.1%]. P59 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2010953.923 | +0.0603 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2093827.532 | -0.0538 | Higher Expense/Bed decreases predicted margin | |
| Net-to-Gross | 0.771 | +0.0451 | Higher Net-to-Gross increases predicted margin | |
| State Peer Margin | -0.084 | -0.0281 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.294 | -0.0266 | Higher Reimbursement Quality decreases predicted m |
Turnaround: 48%Turnaround possible (48%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
51.0%
Distress Risk
$6.7M
RCM Opportunity
D
Opportunity Grade
-1.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P62. 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 | 0.771 | +0.179 | ▲ risk |
| Occupancy Rate | 0.630 | -0.097 | ▼ risk |
| Medicare Day Pct | 0.559 | +0.040 | ▲ risk |
| Medicaid Day Pct | 0.060 | -0.029 | ▼ risk |
| Revenue Per Bed | 2010953.923 | -0.025 | ▼ risk |
| Beds | 143.000 | -0.001 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.7M
Current margin: -4.1%
Projected margin: -1.8%
Grade: D
Comps: 35
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 | 0.771 | 0.856 | 8.5% | $2.8M | 65% | 18mo |
| Payer Mix Optimization | 0.381 | 0.557 | 17.6% | $2.6M | 50% | 24mo |
| Occupancy Improvement | 0.630 | 0.809 | 17.9% | $1.2M | 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. |