ML Analysis — FREEMAN NEOSHO HOSPITAL
CCN 261331 | 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.
47
/ 100 (C)
Financial Health9/25
RCM Upside13/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency3/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-9.7%
R²=0.34 | n=4,907 | Grade B | Actual: 3.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-38.0%, 18.6%]. P38 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1272916.560 | +0.0473 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 1316939.520 | -0.0366 | Lower Revenue/Bed decreases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.110 | +0.0262 | Higher Reimbursement Quality increases predicted m | |
| Bed Count | 25.000 | +0.0193 | Higher Bed Count increases predicted margin |
Suburban Community Hospit
Archetype
53.0%
Distress Risk
$4.7M
RCM Opportunity
A
Opportunity Grade
17.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P30. 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%
MO distress rate: 53.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.335 | +0.176 | ▲ risk |
| Net To Gross Ratio | 0.245 | -0.055 | ▼ risk |
| Medicare Day Pct | 0.456 | +0.022 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
| Revenue Per Bed | 1316939.520 | +0.015 | ▲ risk |
| Medicaid Day Pct | 0.094 | +0.005 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.7M
Current margin: 3.3%
Projected margin: 17.7%
Grade: A
Comps: 61
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 | 0.451 | 0.607 | 15.6% | $2.3M | 50% | 24mo |
| Occupancy Improvement | 0.335 | 0.548 | 21.3% | $1.4M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.245 | 0.502 | 25.7% | $991K | 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 | 31.7 | [25.0, 75.0] | P68 | 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. |