ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 403025 | 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.
44
/ 100 (D)
Financial Health16/25
RCM Upside5/25
Market Position8/20
Demand Defensibility6/15
Operational Efficiency9/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-11.3%
R²=0.34 | n=4,907 | Grade B | Actual: 25.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.6%, 17.0%]. P34 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 181154.182 | -0.1952 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 135774.091 | +0.1874 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.489 | -0.0828 | Higher Reimbursement Quality decreases predicted m | |
| State Peer Margin | -0.088 | -0.0313 | Lower State Peer Margin decreases predicted margin | |
| Occupancy | 0.981 | +0.0259 | Higher Occupancy increases predicted margin |
nan%
Distress Risk
$310K
RCM Opportunity
D
Opportunity Grade
30.2%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
PR distress rate: 55.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.981 | -0.423 | ▼ risk |
| Medicare Day Pct | 0.094 | -0.040 | ▼ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Revenue Per Bed | 181154.182 | +0.083 | ▲ risk |
| Net To Gross Ratio | 0.540 | +0.076 | ▲ risk |
| Beds | 33.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $310K
Current margin: 25.1%
Projected margin: 30.2%
Grade: D
Comps: 11
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 | 0.906 | 0.920 | 1.4% | $211K | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.540 | 0.682 | 14.2% | $100K | 65% | 18mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |