ML Analysis — FREEMAN REGIONAL HEALTH SERVICES
CCN 431313 | 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.
38
/ 100 (D)
Financial Health3/25
RCM Upside18/25
Market Position10/20
Demand Defensibility2/15
Operational Efficiency4/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-7.0%
R²=0.34 | n=4,907 | Grade B | Actual: -7.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.3%, 21.3%]. P44 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 536620.760 | -0.1455 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 576385.560 | +0.1331 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.081 | +0.0346 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.619 | +0.0281 | Higher Net-to-Gross increases predicted margin | |
| Bed Utilization Value | 60395.564 | -0.0270 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 38%Turnaround possible (38%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Rural/Critical Access
Archetype
62.7%
Distress Risk
$6.1M
RCM Opportunity
A
Opportunity Grade
38.0%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P78. 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 |
|---|---|---|---|
| Occupancy Rate | 0.113 | +0.383 | ▲ risk |
| Net To Gross Ratio | 0.619 | +0.112 | ▲ risk |
| Medicare Day Pct | 0.866 | +0.092 | ▲ risk |
| Medicaid Day Pct | 0.003 | -0.086 | ▼ risk |
| Revenue Per Bed | 536620.760 | +0.062 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.1M
Current margin: -7.4%
Projected margin: 38.0%
Grade: A
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 | 0.131 | 0.406 | 27.5% | $4.1M | 50% | 24mo |
| Occupancy Improvement | 0.113 | 0.410 | 29.8% | $2.0M | 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 | 32.3 | [25.0, 75.0] | P71 | 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. |