ML Analysis — DEER RIVER HEALTHCARE CENTER INC.
CCN 241360 | 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.
53
/ 100 (C)
Financial Health8/25
RCM Upside14/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency9/15
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)
-6.3%
R²=0.34 | n=4,907 | Grade B | Actual: 2.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-34.6%, 22.0%]. P46 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2081933.050 | +0.0702 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2037195.900 | -0.0468 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 2.996 | -0.0320 | Lower Log(Beds) decreases predicted margin | |
| Net-to-Gross | 0.548 | +0.0201 | Higher Net-to-Gross increases predicted margin | |
| Bed Count | 20.000 | +0.0201 | Higher Bed Count increases predicted margin |
Rural/Critical Access
Archetype
55.6%
Distress Risk
$3.8M
RCM Opportunity
C
Opportunity Grade
11.2%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P36. 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%
MN distress rate: 45.4%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.274 | +0.234 | ▲ risk |
| Net To Gross Ratio | 0.548 | +0.080 | ▲ risk |
| Medicaid Day Pct | 0.047 | -0.042 | ▼ risk |
| Revenue Per Bed | 2081933.050 | -0.030 | ▼ risk |
| Medicare Day Pct | 0.497 | +0.029 | ▲ risk |
| Beds | 20.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.8M
Current margin: 2.1%
Projected margin: 11.2%
Grade: C
Comps: 94
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 | 0.457 | 0.605 | 14.9% | $2.2M | 50% | 24mo |
| Occupancy Improvement | 0.274 | 0.445 | 17.1% | $1.1M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.548 | 0.636 | 8.8% | $430K | 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 | 29.4 | [25.0, 75.0] | P53 | 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. |