ML Analysis — SOUTH POINTE HOSPITAL
CCN 360144 | 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.
47
/ 100 (C)
Financial Health10/25
RCM Upside17/25
Market Position9/20
Demand Defensibility9/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-4.3%
R²=0.34 | n=4,907 | Grade B | Actual: -1.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-32.6%, 24.0%]. P51 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 851099.907 | -0.1016 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 865751.797 | +0.0975 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.004 | +0.0313 | Higher State Peer Margin increases predicted margi | |
| Log(Beds) | 5.147 | +0.0180 | Higher Log(Beds) increases predicted margin | |
| Bed Utilization Value | 408142.940 | -0.0154 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 42%Turnaround possible (42%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
49.5%
Distress Risk
$2.7M
RCM Opportunity
D
Opportunity Grade
0.1%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P27. 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 | 851099.907 | +0.043 | ▲ risk |
| Occupancy Rate | 0.480 | +0.042 | ▲ risk |
| Net To Gross Ratio | 0.285 | -0.037 | ▼ risk |
| Medicaid Day Pct | 0.059 | -0.030 | ▼ risk |
| Medicare Day Pct | 0.239 | -0.015 | ▼ risk |
| Beds | 172.000 | +0.003 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.7M
Current margin: -1.7%
Projected margin: 0.1%
Grade: D
Comps: 80
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.480 | 0.714 | 23.5% | $1.5M | 55% | 24mo |
| Payer Mix Optimization | 0.702 | 0.754 | 5.3% | $789K | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.285 | 0.308 | 2.4% | $404K | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |