ML Analysis — ST LUKES HOSPITAL
CCN 341322 | 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.
56
/ 100 (C)
Financial Health8/25
RCM Upside17/25
Market Position15/20
Demand Defensibility8/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-2.6%
R²=0.34 | n=4,907 | Grade B | Actual: -1.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.9%, 25.7%]. P56 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2017737.760 | +0.0612 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2053317.960 | -0.0488 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Bed Count | 25.000 | +0.0193 | Higher Bed Count increases predicted margin | |
| State Peer Margin | -0.020 | +0.0188 | Higher State Peer Margin increases predicted margi |
Turnaround: 45%Turnaround possible (45%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
47.6%
Distress Risk
$3.8M
RCM Opportunity
C
Opportunity Grade
5.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P20. 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 |
|---|---|---|---|
| Medicaid Day Pct | 0.007 | -0.081 | ▼ risk |
| Occupancy Rate | 0.486 | +0.036 | ▲ risk |
| Revenue Per Bed | 2017737.760 | -0.026 | ▼ risk |
| Medicare Day Pct | 0.475 | +0.025 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
| Net To Gross Ratio | 0.353 | -0.007 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.8M
Current margin: -1.8%
Projected margin: 5.7%
Grade: C
Comps: 38
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 | 0.517 | 0.665 | 14.8% | $2.2M | 50% | 24mo |
| Occupancy Improvement | 0.486 | 0.677 | 19.1% | $1.3M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.353 | 0.404 | 5.1% | $299K | 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 | 30.1 | [25.0, 75.0] | P59 | 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. |