ML Analysis — WILLS EYE HOSPITAL
CCN 390331 | 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.
47
/ 100 (C)
Financial Health4/25
RCM Upside21/25
Market Position9/20
Demand Defensibility5/15
Operational Efficiency8/15
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)
-15.6%
R²=0.34 | n=4,907 | Grade B | Actual: -26.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-43.9%, 12.7%]. P27 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 13034028.500 | -1.4015 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 10300492.500 | +1.2174 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 5397175.865 | +0.1501 | Higher Bed Utilization Value increases predicted m | |
| Log(Beds) | 1.386 | -0.0694 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.304 | -0.0296 | Higher Reimbursement Quality decreases predicted m |
Turnaround: 25%Low turnaround probability (25%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Suburban Community Hospit
Archetype
33.6%
Distress Risk
$1.3M
RCM Opportunity
D
Opportunity Grade
-23.5%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P100. 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 |
|---|---|---|---|
| Revenue Per Bed | 10300492.500 | -0.515 | ▼ risk |
| Medicaid Day Pct | 0.033 | -0.056 | ▼ risk |
| Medicare Day Pct | 0.046 | -0.048 | ▼ risk |
| Beds | 4.000 | -0.019 | ▼ risk |
| Net To Gross Ratio | 0.330 | -0.017 | ▼ risk |
| Occupancy Rate | 0.524 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.3M
Current margin: -26.5%
Projected margin: -23.5%
Grade: D
Comps: 0
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.524 | 0.680 | 15.6% | $1.0M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.330 | 0.380 | 5.0% | $240K | 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 | 37.2 | [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 | 98.0% | [90.0%, 99.5%] | P0 | Strong — predicted net collection rate is in the top third. |