ML Analysis — FIRSTHEALTH MONTGOMERY MEMORIAL CAH
CCN 341303 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
63
/ 100 (B)
Financial Health17/25
RCM Upside12/25
Market Position15/20
Demand Defensibility10/15
Operational Efficiency9/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
64.4%
R²=0.34 | n=4,907 | Grade B | Actual: 7.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [36.1%, 92.7%]. P100 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 6066817.667 | +0.6264 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 5598331.667 | -0.4855 | Higher Expense/Bed decreases predicted margin | |
| Bed Utilization Value | 14510498.145 | +0.4524 | Higher Bed Utilization Value increases predicted m | |
| Occupancy | 2.392 | +0.1060 | Higher Occupancy increases predicted margin | |
| Log(Beds) | 1.099 | -0.0761 | Lower Log(Beds) decreases predicted margin |
Suburban Community Hospit
Archetype
10.3%
Distress Risk
$300K
RCM Opportunity
D
Opportunity Grade
9.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P100. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Moderate
National distress rate: 49.3%
NC distress rate: 36.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 2.392 | -1.733 | ▼ risk |
| Revenue Per Bed | 6066817.667 | -0.265 | ▼ risk |
| Medicaid Day Pct | 0.017 | -0.072 | ▼ risk |
| Net To Gross Ratio | 0.239 | -0.058 | ▼ risk |
| Beds | 3.000 | -0.020 | ▼ risk |
| Medicare Day Pct | 0.381 | +0.009 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $300K
Current margin: 7.7%
Projected margin: 9.4%
Grade: D
Comps: 0
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 | 0.239 | 0.380 | 14.1% | $300K | 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 | 27.0 | [25.0, 75.0] | P38 | 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 | 99.3% | [90.0%, 99.5%] | P5 | Strong — predicted net collection rate is in the top third. |