ML Analysis — SURGEONS CHOICE MEDICAL CENTER
CCN 230301 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Pass — risk/return profile does not justify PE capital deployment at market multiples.
30
/ 100 (F)
Financial Health3/25
RCM Upside18/25
Market Position5/20
Demand Defensibility1/15
Operational Efficiency2/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-11.5%
R²=0.34 | n=4,907 | Grade B | Actual: -12.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.8%, 16.8%]. P34 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 681651.133 | -0.1253 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 766665.178 | +0.1097 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.065 | +0.0393 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 47601.452 | -0.0274 | Lower Bed Utilization Value decreases predicted ma | |
| Occupancy | 0.070 | -0.0259 | Lower Occupancy decreases predicted margin |
Turnaround: 31%Turnaround possible (31%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Rural/Critical Access
Archetype
59.6%
Distress Risk
$10.8M
RCM Opportunity
A
Opportunity Grade
22.8%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P60. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
MI distress rate: 50.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.070 | +0.423 | ▲ risk |
| Medicaid Day Pct | 0.005 | -0.084 | ▼ risk |
| Medicare Day Pct | 0.767 | +0.076 | ▲ risk |
| Revenue Per Bed | 681651.133 | +0.053 | ▲ risk |
| Net To Gross Ratio | 0.285 | -0.037 | ▼ risk |
| Beds | 45.000 | -0.014 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $10.8M
Current margin: -12.5%
Projected margin: 22.8%
Grade: A
Comps: 73
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 | 0.228 | 0.691 | 46.3% | $6.9M | 50% | 24mo |
| Occupancy Improvement | 0.070 | 0.558 | 48.8% | $3.2M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.285 | 0.466 | 18.1% | $651K | 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 | 34.1 | [25.0, 75.0] | P78 | 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 | 99.5% | [90.0%, 99.5%] | P8 | Strong — predicted net collection rate is in the top third. |