ML Analysis — CARTHAGE AREA HOSPITAL
CCN 331318 | 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.
57
/ 100 (C)
Financial Health4/25
RCM Upside20/25
Market Position15/20
Demand Defensibility10/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
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)
-13.2%
R²=0.34 | n=4,907 | Grade B | Actual: -12.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-41.5%, 15.1%]. P31 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2671075.640 | -0.1249 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 2377721.160 | +0.1115 | Higher Revenue/Bed increases predicted margin | |
| State Peer Margin | -0.175 | -0.0960 | Lower State Peer Margin decreases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 1671309.975 | +0.0265 | Higher Bed Utilization Value increases predicted m |
Turnaround: 28%Low turnaround probability (28%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Suburban Community Hospit
Archetype
42.6%
Distress Risk
$1.8M
RCM Opportunity
D
Opportunity Grade
-9.3%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P56. 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%
NY distress rate: 84.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.703 | -0.165 | ▼ risk |
| Medicaid Day Pct | 0.017 | -0.072 | ▼ risk |
| Revenue Per Bed | 2377721.160 | -0.047 | ▼ risk |
| Net To Gross Ratio | 0.410 | +0.018 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
| Medicare Day Pct | 0.397 | +0.012 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.8M
Current margin: -12.3%
Projected margin: -9.3%
Grade: D
Comps: 30
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 | 0.586 | 0.679 | 9.3% | $1.4M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.410 | 0.471 | 6.1% | $422K | 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 | 30.0 | [25.0, 75.0] | P58 | 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. |