ML Analysis — THE SPECIALTY HOSPITAL OF MERIDIAN
CCN 252004 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
34
/ 100 (D)
Financial Health3/25
RCM Upside19/25
Market Position6/20
Demand Defensibility4/15
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
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-14.2%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-42.5%, 14.1%]. P29 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 216788.163 | -0.1902 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 380082.653 | +0.1573 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.125 | -0.0591 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.018 | +0.0528 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 86351.629 | -0.0261 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 27%Low turnaround probability (27%). Structural disadvantages in Revenue/Bed and Expense/Bed.
nan%
Distress Risk
$7.4M
RCM Opportunity
A
Opportunity Grade
19.3%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
MS distress rate: 68.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.398 | +0.118 | ▲ risk |
| Medicare Day Pct | 0.944 | +0.106 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Revenue Per Bed | 216788.163 | +0.080 | ▲ risk |
| Net To Gross Ratio | 0.318 | -0.023 | ▼ risk |
| Beds | 49.000 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $7.4M
Current margin: -50.0%
Projected margin: 19.3%
Grade: A
Comps: 62
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 | 0.056 | 0.480 | 42.4% | $6.4M | 50% | 24mo |
| Occupancy Improvement | 0.398 | 0.510 | 11.2% | $739K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.318 | 0.527 | 20.9% | $259K | 65% | 18mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |