ML Analysis — SHARON REGIONAL HEALTH SYSTEM
CCN 390211 | 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.
48
/ 100 (C)
Financial Health7/25
RCM Upside19/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
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
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-8.3%
R²=0.34 | n=4,907 | Grade B | Actual: -6.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-36.6%, 20.0%]. P41 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 772253.807 | -0.1127 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 822576.153 | +0.1028 | Higher Expense/Bed increases predicted margin | |
| Net-to-Gross | 0.203 | -0.0186 | Lower Net-to-Gross decreases predicted margin | |
| Reimbursement Quality | 0.139 | +0.0180 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 368714.971 | -0.0167 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 36%Turnaround possible (36%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
50.0%
Distress Risk
$5.8M
RCM Opportunity
D
Opportunity Grade
-1.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P57. 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%
PA distress rate: 48.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.203 | -0.074 | ▼ risk |
| Revenue Per Bed | 772253.807 | +0.048 | ▲ risk |
| Occupancy Rate | 0.477 | +0.044 | ▲ risk |
| Medicaid Day Pct | 0.119 | +0.030 | ▲ risk |
| Medicare Day Pct | 0.195 | -0.023 | ▼ risk |
| Beds | 150.000 | +0.000 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.8M
Current margin: -6.5%
Projected margin: -1.6%
Grade: D
Comps: 102
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.686 | 0.836 | 15.0% | $2.3M | 50% | 24mo |
| Occupancy Improvement | 0.477 | 0.745 | 26.8% | $1.8M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.203 | 0.331 | 12.8% | $1.7M | 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 | 26.4 | [25.0, 75.0] | P36 | 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. |