ML Analysis — MERCY HOSPITAL ARDMORE
CCN 370047 | 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.
52
/ 100 (C)
Financial Health8/25
RCM Upside17/25
Market Position14/20
Demand Defensibility11/15
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
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-11.1%
R²=0.34 | n=4,907 | Grade B | Actual: -1.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.4%, 17.2%]. P35 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1146906.214 | +0.0629 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 1134380.657 | -0.0621 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.091 | +0.0318 | Higher Reimbursement Quality increases predicted m | |
| State Peer Margin | -0.088 | -0.0313 | Lower State Peer Margin decreases predicted margin | |
| Medicaid % | 0.243 | -0.0187 | Higher Medicaid % decreases predicted margin |
Turnaround: 31%Turnaround possible (31%) but uncertain. Margin improvement depends on Expense/Bed.
Suburban Community Hospit
Archetype
54.3%
Distress Risk
$3.8M
RCM Opportunity
D
Opportunity Grade
1.3%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P78. 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: High
National distress rate: 49.3%
OK distress rate: 58.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.243 | +0.154 | ▲ risk |
| Occupancy Rate | 0.450 | +0.070 | ▲ risk |
| Net To Gross Ratio | 0.237 | -0.058 | ▼ risk |
| Revenue Per Bed | 1134380.657 | +0.026 | ▲ risk |
| Medicare Day Pct | 0.374 | +0.008 | ▲ risk |
| Beds | 140.000 | -0.001 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.8M
Current margin: -1.1%
Projected margin: 1.3%
Grade: D
Comps: 28
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.450 | 0.688 | 23.8% | $1.6M | 55% | 24mo |
| Payer Mix Optimization | 0.382 | 0.461 | 7.8% | $1.2M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.237 | 0.294 | 5.7% | $1.1M | 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 | 27.1 | [25.0, 75.0] | P39 | 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. |