ML Analysis — THE MCDOWELL HOSPITAL
CCN 340087 | 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.
54
/ 100 (C)
Financial Health8/25
RCM Upside20/25
Market Position15/20
Demand Defensibility8/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
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)
-1.3%
R²=0.34 | n=4,907 | Grade B | Actual: -6.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.6%, 27.0%]. P59 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2188559.567 | +0.0850 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2334582.900 | -0.0834 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 3.401 | -0.0226 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 1484622.873 | +0.0203 | Higher Bed Utilization Value increases predicted m | |
| State Peer Margin | -0.020 | +0.0188 | Higher State Peer Margin increases predicted margi |
Turnaround: 48%Turnaround possible (48%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
41.9%
Distress Risk
$1.4M
RCM Opportunity
D
Opportunity Grade
-4.5%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P32. 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%
NC distress rate: 36.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.678 | -0.142 | ▼ risk |
| Net To Gross Ratio | 0.235 | -0.060 | ▼ risk |
| Medicaid Day Pct | 0.050 | -0.039 | ▼ risk |
| Revenue Per Bed | 2188559.567 | -0.036 | ▼ risk |
| Beds | 30.000 | -0.016 | ▼ risk |
| Medicare Day Pct | 0.273 | -0.009 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.4M
Current margin: -6.7%
Projected margin: -4.5%
Grade: D
Comps: 40
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.235 | 0.423 | 18.9% | $1.4M | 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 | 29.7 | [25.0, 75.0] | P56 | 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. |