ML Analysis — WESTERN RESERVE HOSPITAL
CCN 360150 | 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.
50
/ 100 (C)
Financial Health9/25
RCM Upside20/25
Market Position11/20
Demand Defensibility8/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-2.0%
R²=0.34 | n=4,907 | Grade B | Actual: -9.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.3%, 26.3%]. P57 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1943598.012 | -0.0353 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.004 | +0.0313 | Higher State Peer Margin increases predicted margi | |
| Reimbursement Quality | 0.104 | +0.0280 | Higher Reimbursement Quality increases predicted m | |
| Revenue/Bed | 1778599.843 | +0.0278 | Higher Revenue/Bed increases predicted margin | |
| Net-to-Gross | 0.138 | -0.0259 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 46%Turnaround possible (46%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
44.9%
Distress Risk
$5.4M
RCM Opportunity
D
Opportunity Grade
-5.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P33. 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 |
|---|---|---|---|
| Net To Gross Ratio | 0.138 | -0.103 | ▼ risk |
| Medicaid Day Pct | 0.026 | -0.063 | ▼ risk |
| Occupancy Rate | 0.494 | +0.029 | ▲ risk |
| Medicare Day Pct | 0.217 | -0.019 | ▼ risk |
| Revenue Per Bed | 1778599.843 | -0.012 | ▼ risk |
| Beds | 83.000 | -0.009 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.4M
Current margin: -9.3%
Projected margin: -5.6%
Grade: D
Comps: 95
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 | 0.138 | 0.379 | 24.1% | $4.2M | 65% | 18mo |
| Occupancy Improvement | 0.494 | 0.670 | 17.6% | $1.2M | 55% | 24mo |
| Payer Mix Optimization | 0.757 | 0.760 | 0.3% | $49K | 50% | 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 | 28.4 | [25.0, 75.0] | P46 | 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. |