ML Analysis — LIBERTY HOSPITAL
CCN 260177 | 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.
55
/ 100 (C)
Financial Health9/25
RCM Upside18/25
Market Position13/20
Demand Defensibility11/15
Operational Efficiency4/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-6.9%
R²=0.34 | n=4,907 | Grade B | Actual: -3.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.2%, 21.4%]. P44 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Log(Beds) | 5.293 | +0.0213 | Higher Log(Beds) increases predicted margin | |
| State Peer Margin | -0.062 | -0.0125 | Lower State Peer Margin decreases predicted margin | |
| Expense/Bed | 1571038.191 | +0.0106 | Higher Expense/Bed increases predicted margin | |
| Net-to-Gross | 0.281 | -0.0099 | Lower Net-to-Gross decreases predicted margin | |
| Reimbursement Quality | 0.171 | +0.0089 | Higher Reimbursement Quality increases predicted m |
Turnaround: 38%Turnaround possible (38%) but uncertain. Margin improvement depends on Log(Beds).
Suburban Community Hospit
Archetype
49.6%
Distress Risk
$4.8M
RCM Opportunity
D
Opportunity Grade
-1.5%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P20. 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: Elevated
National distress rate: 49.3%
MO distress rate: 53.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.465 | +0.056 | ▲ risk |
| Net To Gross Ratio | 0.281 | -0.039 | ▼ risk |
| Medicaid Day Pct | 0.073 | -0.016 | ▼ risk |
| Beds | 199.000 | +0.007 | ▲ risk |
| Revenue Per Bed | 1523595.101 | +0.003 | ▲ risk |
| Medicare Day Pct | 0.319 | -0.001 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.8M
Current margin: -3.1%
Projected margin: -1.5%
Grade: D
Comps: 41
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.465 | 0.745 | 28.0% | $1.8M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.281 | 0.332 | 5.1% | $1.8M | 65% | 18mo |
| Payer Mix Optimization | 0.608 | 0.682 | 7.3% | $1.1M | 50% | 24mo |
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 | 25.0 | [25.0, 75.0] | P0 | 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. |