ML Analysis — ST LUKE COMMUNITY HOSPITAL
CCN 271325 | 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.
49
/ 100 (C)
Financial Health3/25
RCM Upside19/25
Market Position13/20
Demand Defensibility8/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-12.6%
R²=0.34 | n=4,907 | Grade B | Actual: -9.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-40.8%, 15.8%]. P32 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | -0.096 | -0.0373 | Lower State Peer Margin decreases predicted margin | |
| Net-to-Gross | 0.675 | +0.0343 | Higher Net-to-Gross increases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Expense/Bed | 1836852.760 | -0.0221 | Higher Expense/Bed decreases predicted margin | |
| Bed Count | 25.000 | +0.0193 | Higher Bed Count increases predicted margin |
Turnaround: 29%Low turnaround probability (29%). Structural disadvantages in State Peer Margin and Net-to-Gross.
Suburban Community Hospit
Archetype
58.6%
Distress Risk
$4.7M
RCM Opportunity
B
Opportunity Grade
1.5%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P74. 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%
MT distress rate: 69.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.675 | +0.136 | ▲ risk |
| Occupancy Rate | 0.384 | +0.131 | ▲ risk |
| Medicaid Day Pct | 0.200 | +0.111 | ▲ risk |
| Medicare Day Pct | 0.445 | +0.020 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
| Revenue Per Bed | 1672047.760 | -0.005 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.7M
Current margin: -9.9%
Projected margin: 1.5%
Grade: B
Comps: 48
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.384 | 0.732 | 34.8% | $2.3M | 55% | 24mo |
| Payer Mix Optimization | 0.355 | 0.451 | 9.6% | $1.4M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.675 | 0.878 | 20.3% | $992K | 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 | 28.7 | [25.0, 75.0] | P49 | 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. |