ML Analysis — AVERA QUEEN OF PEACE
CCN 430013 | 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.
58
/ 100 (C)
Financial Health9/25
RCM Upside19/25
Market Position14/20
Demand Defensibility8/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-5.4%
R²=0.34 | n=4,907 | Grade B | Actual: -8.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.7%, 22.9%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2808385.200 | -0.1418 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 2583358.340 | +0.1402 | Higher Revenue/Bed increases predicted margin | |
| Reimbursement Quality | 0.146 | +0.0158 | Higher Reimbursement Quality increases predicted m | |
| Bed Count | 50.000 | +0.0154 | Higher Bed Count increases predicted margin | |
| Log(Beds) | 3.912 | -0.0107 | Lower Log(Beds) decreases predicted margin |
Turnaround: 40%Turnaround possible (40%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
52.2%
Distress Risk
$3.4M
RCM Opportunity
D
Opportunity Grade
-6.1%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P53. 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: High
National distress rate: 49.3%
SD distress rate: 44.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.375 | +0.140 | ▲ risk |
| Revenue Per Bed | 2583358.340 | -0.059 | ▼ risk |
| Medicaid Day Pct | 0.120 | +0.031 | ▲ risk |
| Medicare Day Pct | 0.469 | +0.024 | ▲ risk |
| Beds | 50.000 | -0.013 | ▼ risk |
| Net To Gross Ratio | 0.356 | -0.006 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.4M
Current margin: -8.7%
Projected margin: -6.1%
Grade: D
Comps: 31
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.356 | 0.533 | 17.8% | $2.7M | 65% | 18mo |
| Payer Mix Optimization | 0.411 | 0.444 | 3.3% | $491K | 50% | 24mo |
| Occupancy Improvement | 0.375 | 0.410 | 3.5% | $230K | 55% | 24mo |
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 | 29.1 | [25.0, 75.0] | P52 | 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. |