ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 213028 | 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.
45
/ 100 (C)
Financial Health15/25
RCM Upside5/25
Market Position8/20
Demand Defensibility8/15
Operational Efficiency9/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Heavy Medicare dependence (>55%)
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
1.3%
R²=0.34 | n=4,907 | Grade B | Actual: 17.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-27.0%, 29.6%]. P66 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 416609.743 | +0.1528 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 503215.919 | -0.1502 | Lower Revenue/Bed decreases predicted margin | |
| Net-to-Gross | 0.692 | +0.0362 | Higher Net-to-Gross increases predicted margin | |
| Occupancy × Net-to-Gross | 0.594 | +0.0304 | Higher Occupancy × Net-to-Gross increases predicte | |
| State Peer Margin | -0.084 | -0.0281 | Lower State Peer Margin decreases predicted margin |
nan%
Distress Risk
$8.1M
RCM Opportunity
A
Opportunity Grade
39.0%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
MD distress rate: 60.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.858 | -0.309 | ▼ risk |
| Medicare Day Pct | 0.805 | +0.082 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.692 | +0.144 | ▲ risk |
| Revenue Per Bed | 503215.919 | +0.064 | ▲ risk |
| Beds | 74.000 | -0.010 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.1M
Current margin: 17.2%
Projected margin: 39.0%
Grade: A
Comps: 20
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 | 0.195 | 0.686 | 49.1% | $7.4M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.692 | 0.859 | 16.7% | $726K | 65% | 18mo |
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. |