ML Analysis — WINDOM AREA HOSPITAL
CCN 241332 | 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.
50
/ 100 (C)
Financial Health9/25
RCM Upside13/25
Market Position15/20
Demand Defensibility6/15
Operational Efficiency7/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-11.4%
R²=0.34 | n=4,907 | Grade B | Actual: 3.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.7%, 16.9%]. P34 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Log(Beds) | 2.890 | -0.0345 | Lower Log(Beds) decreases predicted margin | |
| Expense/Bed | 1379374.444 | +0.0342 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 1428893.889 | -0.0210 | Lower Revenue/Bed decreases predicted margin | |
| Bed Utilization Value | 253808.093 | -0.0205 | Lower Bed Utilization Value decreases predicted ma | |
| Bed Count | 18.000 | +0.0204 | Higher Bed Count increases predicted margin |
Suburban Community Hospit
Archetype
60.9%
Distress Risk
$3.9M
RCM Opportunity
A
Opportunity Grade
18.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P77. 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%
MN distress rate: 45.4%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.178 | +0.323 | ▲ risk |
| Medicaid Day Pct | 0.174 | +0.085 | ▲ risk |
| Net To Gross Ratio | 0.520 | +0.067 | ▲ risk |
| Beds | 18.000 | -0.017 | ▼ risk |
| Revenue Per Bed | 1428893.889 | +0.009 | ▲ risk |
| Medicare Day Pct | 0.353 | +0.004 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.9M
Current margin: 3.5%
Projected margin: 18.8%
Grade: A
Comps: 90
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 | 0.473 | 0.597 | 12.4% | $1.9M | 50% | 24mo |
| Occupancy Improvement | 0.178 | 0.438 | 26.0% | $1.7M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.520 | 0.641 | 12.1% | $363K | 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 | 30.3 | [25.0, 75.0] | P61 | 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. |