ML Analysis — FAITH REGIONAL HEALTH SERVICES
CCN 280125 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
61
/ 100 (B)
Financial Health18/25
RCM Upside7/25
Market Position14/20
Demand Defensibility11/15
Operational Efficiency11/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-5.0%
R²=0.34 | n=4,907 | Grade B | Actual: 10.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.3%, 23.3%]. P49 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1459928.344 | +0.0243 | Higher Expense/Bed increases predicted margin | |
| Medicaid % | 0.201 | -0.0136 | Higher Medicaid % decreases predicted margin | |
| State Peer Margin | -0.063 | -0.0129 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.159 | +0.0122 | Higher Reimbursement Quality increases predicted m | |
| Log(Beds) | 4.804 | +0.0100 | Higher Log(Beds) increases predicted margin |
Suburban Community Hospit
Archetype
54.5%
Distress Risk
$6.2M
RCM Opportunity
D
Opportunity Grade
13.2%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P55. 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%
NE distress rate: 53.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.201 | +0.112 | ▲ risk |
| Occupancy Rate | 0.433 | +0.086 | ▲ risk |
| Medicare Day Pct | 0.384 | +0.010 | ▲ risk |
| Net To Gross Ratio | 0.384 | +0.007 | ▲ risk |
| Beds | 122.000 | -0.004 | ▼ risk |
| Revenue Per Bed | 1623472.484 | -0.003 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.2M
Current margin: 10.1%
Projected margin: 13.2%
Grade: D
Comps: 16
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 | 0.415 | 0.679 | 26.4% | $4.0M | 50% | 24mo |
| Occupancy Improvement | 0.433 | 0.625 | 19.2% | $1.3M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.384 | 0.425 | 4.1% | $955K | 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 | 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. |