ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 423027 | 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.
40
/ 100 (D)
Financial Health15/25
RCM Upside5/25
Market Position5/20
Demand Defensibility6/15
Operational Efficiency9/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
Catalysts:
Margin Prediction (Trained Ridge Model)
3.7%
R²=0.34 | n=4,907 | Grade B | Actual: 16.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-24.6%, 32.0%]. P71 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 377407.980 | +0.1577 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 452764.878 | -0.1573 | Lower Revenue/Bed decreases predicted margin | |
| State Peer Margin | 0.013 | +0.0432 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.754 | +0.0432 | Higher Net-to-Gross increases predicted margin | |
| Occupancy × Net-to-Gross | 0.565 | +0.0282 | Higher Occupancy × Net-to-Gross increases predicte |
nan%
Distress Risk
$5.2M
RCM Opportunity
A
Opportunity Grade
40.0%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
SC distress rate: 34.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.749 | -0.208 | ▼ risk |
| Medicare Day Pct | 0.641 | +0.054 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.754 | +0.172 | ▲ risk |
| Revenue Per Bed | 452764.878 | +0.067 | ▲ risk |
| Beds | 49.000 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.2M
Current margin: 16.6%
Projected margin: 40.0%
Grade: A
Comps: 44
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 | 0.359 | 0.701 | 34.2% | $5.1M | 50% | 24mo |
| Occupancy Improvement | 0.749 | 0.757 | 0.8% | $52K | 55% | 24mo |
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. |