ML Analysis — RUTHERFORD HOSPITAL INC.
CCN 340013 | 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.
47
/ 100 (C)
Financial Health6/25
RCM Upside17/25
Market Position15/20
Demand Defensibility10/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Low occupancy (<30%) — demand risk
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-7.6%
R²=0.34 | n=4,907 | Grade B | Actual: -1.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.9%, 20.7%]. P43 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 678356.824 | -0.1258 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 691417.740 | +0.1190 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.118 | +0.0239 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 164173.752 | -0.0235 | Lower Bed Utilization Value decreases predicted ma | |
| Net-to-Gross | 0.185 | -0.0206 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 37%Turnaround possible (37%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
54.1%
Distress Risk
$6.6M
RCM Opportunity
C
Opportunity Grade
6.2%
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%
NC distress rate: 36.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.242 | +0.263 | ▲ risk |
| Net To Gross Ratio | 0.185 | -0.082 | ▼ risk |
| Revenue Per Bed | 678356.824 | +0.053 | ▲ risk |
| Medicaid Day Pct | 0.052 | -0.037 | ▼ risk |
| Beds | 119.000 | -0.004 | ▼ risk |
| Medicare Day Pct | 0.308 | -0.003 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.6M
Current margin: -1.9%
Projected margin: 6.2%
Grade: C
Comps: 58
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.242 | 0.742 | 50.0% | $3.3M | 55% | 24mo |
| Payer Mix Optimization | 0.640 | 0.758 | 11.8% | $1.8M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.185 | 0.346 | 16.1% | $1.5M | 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 | 27.9 | [25.0, 75.0] | P43 | 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. |