ML Analysis — NANTUCKET COTTAGE HOSPITAL
CCN 220177 | 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 Health5/25
RCM Upside20/25
Market Position14/20
Demand Defensibility8/15
Operational Efficiency10/15
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)
-18.6%
R²=0.34 | n=4,907 | Grade B | Actual: -25.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-46.9%, 9.7%]. P22 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 5870106.714 | -0.5190 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 4665960.571 | +0.4309 | Higher Revenue/Bed increases predicted margin | |
| State Peer Margin | -0.122 | -0.0566 | Lower State Peer Margin decreases predicted margin | |
| Log(Beds) | 2.639 | -0.0403 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 2051744.306 | +0.0391 | Higher Bed Utilization Value increases predicted m |
Turnaround: 21%Low turnaround probability (21%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Under-Performing / Distre
Archetype
50.1%
Distress Risk
$4.0M
RCM Opportunity
C
Opportunity Grade
-19.6%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P93. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: High
National distress rate: 49.3%
MA distress rate: 61.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 4665960.571 | -0.182 | ▼ risk |
| Occupancy Rate | 0.440 | +0.079 | ▲ risk |
| Net To Gross Ratio | 0.543 | +0.078 | ▲ risk |
| Medicaid Day Pct | 0.138 | +0.049 | ▲ risk |
| Medicare Day Pct | 0.464 | +0.023 | ▲ risk |
| Beds | 14.000 | -0.018 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.0M
Current margin: -25.8%
Projected margin: -19.6%
Grade: C
Comps: 1748
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 | 0.398 | 0.607 | 20.9% | $3.1M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.543 | 0.629 | 8.6% | $657K | 65% | 18mo |
| Occupancy Improvement | 0.440 | 0.478 | 3.8% | $254K | 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 | 33.4 | [25.0, 75.0] | P75 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.4% | [90.0%, 99.5%] | P6 | Strong — predicted net collection rate is in the top third. |