ML Analysis — ORTHOPEDIC HOSPITAL
CCN 370220 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
43
/ 100 (D)
Financial Health2/25
RCM Upside19/25
Market Position9/20
Demand Defensibility7/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-11.1%
R²=0.34 | n=4,907 | Grade B | Actual: -6.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.4%, 17.2%]. P35 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 3367059.714 | +0.2496 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 3568683.714 | -0.2355 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 1.946 | -0.0564 | Lower Log(Beds) decreases predicted margin | |
| State Peer Margin | -0.088 | -0.0313 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.098 | +0.0299 | Higher Reimbursement Quality increases predicted m |
Turnaround: 31%Turnaround possible (31%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
46.5%
Distress Risk
$2.1M
RCM Opportunity
C
Opportunity Grade
2.8%
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%
OK distress rate: 58.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.316 | +0.194 | ▲ risk |
| Revenue Per Bed | 3367059.714 | -0.106 | ▼ risk |
| Net To Gross Ratio | 0.143 | -0.101 | ▼ risk |
| Medicaid Day Pct | 0.010 | -0.079 | ▼ risk |
| Beds | 7.000 | -0.019 | ▼ risk |
| Medicare Day Pct | 0.307 | -0.003 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.1M
Current margin: -6.0%
Projected margin: 2.8%
Grade: C
Comps: 193
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 | 0.143 | 0.718 | 57.5% | $1.6M | 65% | 18mo |
| Occupancy Improvement | 0.316 | 0.387 | 7.2% | $473K | 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 | 36.8 | [25.0, 75.0] | P80 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 98.4% | [90.0%, 99.5%] | P1 | Strong — predicted net collection rate is in the top third. |