ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 313036 | 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 Health15/25
RCM Upside5/25
Market Position14/20
Demand Defensibility6/15
Operational Efficiency9/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
2.1%
R²=0.34 | n=4,907 | Grade B | Actual: 21.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-26.2%, 30.4%]. P67 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 494505.000 | +0.1432 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 627823.024 | -0.1328 | Lower Revenue/Bed decreases predicted margin | |
| Net-to-Gross | 0.669 | +0.0336 | Higher Net-to-Gross increases predicted margin | |
| Occupancy × Net-to-Gross | 0.623 | +0.0325 | Higher Occupancy × Net-to-Gross increases predicte | |
| Occupancy | 0.931 | +0.0231 | Higher Occupancy increases predicted margin |
Suburban Community Hospit
Archetype
43.6%
Distress Risk
$4.6M
RCM Opportunity
A
Opportunity Grade
39.3%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P95. 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%
NJ distress rate: 47.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.931 | -0.377 | ▼ risk |
| Net To Gross Ratio | 0.669 | +0.134 | ▲ risk |
| Medicaid Day Pct | 0.013 | -0.076 | ▼ risk |
| Revenue Per Bed | 627823.024 | +0.056 | ▲ risk |
| Medicare Day Pct | 0.600 | +0.047 | ▲ risk |
| Beds | 41.000 | -0.014 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.6M
Current margin: 21.2%
Projected margin: 39.3%
Grade: A
Comps: 18
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 | 0.387 | 0.696 | 30.9% | $4.6M | 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. |