ML Analysis — MADISON REGIONAL HEALTH SYSTEM
CCN 431300 | 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.
46
/ 100 (C)
Financial Health7/25
RCM Upside18/25
Market Position11/20
Demand Defensibility5/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.5%
R²=0.34 | n=4,907 | Grade B | Actual: -1.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.8%, 26.8%]. P58 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Log(Beds) | 3.091 | -0.0298 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.102 | +0.0285 | Higher Reimbursement Quality increases predicted m | |
| Bed Count | 22.000 | +0.0198 | Higher Bed Count increases predicted margin | |
| Net-to-Gross | 0.523 | +0.0173 | Higher Net-to-Gross increases predicted margin | |
| Commercial % | 0.196 | -0.0158 | Lower Commercial % decreases predicted margin |
Turnaround: 47%Turnaround possible (47%) but uncertain. Margin improvement depends on improving Log(Beds).
Rural/Critical Access
Archetype
51.8%
Distress Risk
$2.8M
RCM Opportunity
C
Opportunity Grade
6.6%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P66. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
SD distress rate: 44.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.523 | +0.069 | ▲ risk |
| Medicare Day Pct | 0.715 | +0.067 | ▲ risk |
| Occupancy Rate | 0.549 | -0.022 | ▼ risk |
| Beds | 22.000 | -0.017 | ▼ risk |
| Revenue Per Bed | 1534313.136 | +0.003 | ▲ risk |
| Medicaid Day Pct | 0.090 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.8M
Current margin: -1.6%
Projected margin: 6.6%
Grade: C
Comps: 42
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 | 0.196 | 0.353 | 15.7% | $2.4M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.523 | 0.632 | 10.9% | $430K | 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 | 30.1 | [25.0, 75.0] | P59 | 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. |