ML Analysis — KNOX COMMUNITY HOSPITAL
CCN 360040 | 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.
64
/ 100 (B)
Financial Health8/25
RCM Upside20/25
Market Position15/20
Demand Defensibility11/15
Operational Efficiency10/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.8%
R²=0.34 | n=4,907 | Grade B | Actual: -16.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.1%, 26.5%]. P57 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 3573697.422 | -0.2361 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 3062797.500 | +0.2071 | Higher Revenue/Bed increases predicted margin | |
| State Peer Margin | -0.004 | +0.0313 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 1761239.675 | +0.0295 | Higher Bed Utilization Value increases predicted m | |
| Bed Count | 64.000 | +0.0132 | Higher Bed Count increases predicted margin |
Turnaround: 47%Turnaround possible (47%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
44.7%
Distress Risk
$4.3M
RCM Opportunity
D
Opportunity Grade
-14.5%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P56. 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%
OH distress rate: 37.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 3062797.500 | -0.088 | ▼ risk |
| Occupancy Rate | 0.575 | -0.046 | ▼ risk |
| Medicaid Day Pct | 0.048 | -0.041 | ▼ risk |
| Beds | 64.000 | -0.011 | ▼ risk |
| Net To Gross Ratio | 0.365 | -0.001 | ▼ risk |
| Medicare Day Pct | 0.331 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.3M
Current margin: -16.7%
Projected margin: -14.5%
Grade: D
Comps: 94
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 | 0.621 | 0.761 | 14.0% | $2.1M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.365 | 0.433 | 6.8% | $1.6M | 65% | 18mo |
| Occupancy Improvement | 0.575 | 0.674 | 9.9% | $656K | 55% | 24mo |
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 | 27.4 | [25.0, 75.0] | P40 | 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. |