ML Analysis — HOLSTON VALLEY HOSP & MED CTR
CCN 440017 | 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.
57
/ 100 (C)
Financial Health9/25
RCM Upside20/25
Market Position13/20
Demand Defensibility13/15
Operational Efficiency2/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-1.1%
R²=0.34 | n=4,907 | Grade B | Actual: -7.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.4%, 27.2%]. P60 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1204921.668 | -0.0523 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1294388.968 | +0.0447 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 5.656 | +0.0298 | Higher Log(Beds) increases predicted margin | |
| State Peer Margin | -0.006 | +0.0291 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.174 | -0.0219 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 48%Turnaround possible (48%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
41.3%
Distress Risk
$4.9M
RCM Opportunity
D
Opportunity Grade
-6.0%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P0. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
TN distress rate: 43.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.763 | -0.221 | ▼ risk |
| Net To Gross Ratio | 0.174 | -0.087 | ▼ risk |
| Medicaid Day Pct | 0.050 | -0.039 | ▼ risk |
| Revenue Per Bed | 1204921.668 | +0.022 | ▲ risk |
| Beds | 286.000 | +0.018 | ▲ risk |
| Medicare Day Pct | 0.223 | -0.018 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.9M
Current margin: -7.4%
Projected margin: -6.0%
Grade: D
Comps: 24
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 | 0.174 | 0.270 | 9.6% | $3.9M | 65% | 18mo |
| Payer Mix Optimization | 0.727 | 0.778 | 5.1% | $770K | 50% | 24mo |
| Occupancy Improvement | 0.763 | 0.802 | 3.9% | $256K | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |