ML Analysis — WATAUGA MEDICAL CENTER
CCN 340051 | 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.
58
/ 100 (C)
Financial Health13/25
RCM Upside14/25
Market Position15/20
Demand Defensibility11/15
Operational Efficiency5/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
0.1%
R²=0.34 | n=4,907 | Grade B | Actual: 2.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-28.2%, 28.4%]. P62 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1971471.926 | +0.0547 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 1924400.495 | -0.0329 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.020 | +0.0188 | Higher State Peer Margin increases predicted margi | |
| Bed Count | 95.000 | +0.0084 | Higher Bed Count increases predicted margin | |
| Bed Utilization Value | 1068660.024 | +0.0065 | Higher Bed Utilization Value increases predicted m |
Suburban Community Hospit
Archetype
47.0%
Distress Risk
$4.8M
RCM Opportunity
D
Opportunity Grade
4.9%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P0. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
NC distress rate: 36.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.050 | -0.039 | ▼ risk |
| Revenue Per Bed | 1971471.926 | -0.023 | ▼ risk |
| Occupancy Rate | 0.542 | -0.016 | ▼ risk |
| Net To Gross Ratio | 0.337 | -0.014 | ▼ risk |
| Beds | 95.000 | -0.007 | ▼ risk |
| Medicare Day Pct | 0.363 | +0.006 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.8M
Current margin: 2.4%
Projected margin: 4.9%
Grade: D
Comps: 59
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 | 0.587 | 0.758 | 17.1% | $2.6M | 50% | 24mo |
| Occupancy Improvement | 0.542 | 0.742 | 20.0% | $1.3M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.337 | 0.377 | 4.0% | $876K | 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 | 25.3 | [25.0, 75.0] | P29 | 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. |