ML Analysis — HERITAGE VALLEY BEAVER
CCN 390036 | 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.
56
/ 100 (C)
Financial Health8/25
RCM Upside20/25
Market Position15/20
Demand Defensibility9/15
Operational Efficiency4/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-5.5%
R²=0.34 | n=4,907 | Grade B | Actual: -15.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.9%, 22.8%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Reimbursement Quality | 0.271 | -0.0201 | Higher Reimbursement Quality decreases predicted m | |
| Log(Beds) | 4.997 | +0.0145 | Higher Log(Beds) increases predicted margin | |
| Revenue/Bed | 1486550.987 | -0.0129 | Lower Revenue/Bed decreases predicted margin | |
| Commercial % | 0.849 | +0.0108 | Higher Commercial % increases predicted margin | |
| Medicaid % | 0.008 | +0.0098 | Higher Medicaid % increases predicted margin |
Turnaround: 40%Turnaround possible (40%) but uncertain. Margin improvement depends on improving Reimbursement Quality.
Suburban Community Hospit
Archetype
42.4%
Distress Risk
$739K
RCM Opportunity
D
Opportunity Grade
-15.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P39. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
PA distress rate: 48.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.685 | -0.148 | ▼ risk |
| Medicaid Day Pct | 0.008 | -0.081 | ▼ risk |
| Medicare Day Pct | 0.143 | -0.032 | ▼ risk |
| Net To Gross Ratio | 0.319 | -0.022 | ▼ risk |
| Revenue Per Bed | 1486550.986 | +0.005 | ▲ risk |
| Beds | 148.000 | -0.000 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $739K
Current margin: -15.9%
Projected margin: -15.6%
Grade: D
Comps: 101
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.685 | 0.746 | 6.1% | $404K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.319 | 0.332 | 1.3% | $335K | 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. |