ML Analysis — NORTHEAST REHABILITATION HOSPITAL
CCN 303026 | 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 Health10/25
RCM Upside17/25
Market Position13/20
Demand Defensibility11/15
Operational Efficiency4/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
0.6%
R²=0.34 | n=4,907 | Grade B | Actual: -0.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-27.7%, 28.9%]. P64 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 760645.578 | -0.1143 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 761958.304 | +0.1103 | Higher Expense/Bed increases predicted margin | |
| Occupancy × Net-to-Gross | 0.444 | +0.0192 | Higher Occupancy × Net-to-Gross increases predicte | |
| Net-to-Gross | 0.532 | +0.0183 | Higher Net-to-Gross increases predicted margin | |
| Occupancy | 0.834 | +0.0175 | Higher Occupancy increases predicted margin |
Turnaround: 51%Turnaround possible (51%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
43.9%
Distress Risk
$2.8M
RCM Opportunity
D
Opportunity Grade
2.5%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P85. 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%
NH distress rate: 42.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.834 | -0.286 | ▼ risk |
| Medicaid Day Pct | 0.000 | -0.088 | ▼ risk |
| Net To Gross Ratio | 0.532 | +0.073 | ▲ risk |
| Revenue Per Bed | 760645.578 | +0.048 | ▲ risk |
| Medicare Day Pct | 0.554 | +0.039 | ▲ risk |
| Beds | 135.000 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.8M
Current margin: -0.2%
Projected margin: 2.5%
Grade: D
Comps: 13
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 | 0.446 | 0.630 | 18.5% | $2.8M | 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. |