ML Analysis — MCLAREN THUMB REGION
CCN 230118 | 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.
47
/ 100 (C)
Financial Health3/25
RCM Upside19/25
Market Position13/20
Demand Defensibility8/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
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)
-12.1%
R²=0.34 | n=4,907 | Grade B | Actual: -9.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-40.4%, 16.2%]. P33 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 440369.290 | -0.1590 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 480814.903 | +0.1449 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.314 | -0.0324 | Higher Reimbursement Quality decreases predicted m | |
| Bed Utilization Value | 181031.577 | -0.0230 | Lower Bed Utilization Value decreases predicted ma | |
| Log(Beds) | 3.434 | -0.0218 | Lower Log(Beds) decreases predicted margin |
Turnaround: 30%Low turnaround probability (30%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Suburban Community Hospit
Archetype
52.3%
Distress Risk
$1.2M
RCM Opportunity
C
Opportunity Grade
-0.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P47. 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%
MI distress rate: 50.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.411 | +0.106 | ▲ risk |
| Medicaid Day Pct | 0.010 | -0.078 | ▼ risk |
| Revenue Per Bed | 440369.290 | +0.067 | ▲ risk |
| Net To Gross Ratio | 0.466 | +0.043 | ▲ risk |
| Beds | 31.000 | -0.016 | ▼ risk |
| Medicare Day Pct | 0.316 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.2M
Current margin: -9.2%
Projected margin: -0.7%
Grade: C
Comps: 71
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.411 | 0.543 | 13.2% | $868K | 55% | 24mo |
| Payer Mix Optimization | 0.674 | 0.692 | 1.8% | $273K | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.466 | 0.481 | 1.5% | $24K | 65% | 18mo |
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 | 28.9 | [25.0, 75.0] | P50 | 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. |