ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 443035 | 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 Health12/25
RCM Upside11/25
Market Position8/20
Demand Defensibility8/15
Operational Efficiency7/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.1%
R²=0.34 | n=4,907 | Grade B | Actual: 7.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.4%, 27.2%]. P60 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 400239.275 | -0.1646 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 371132.650 | +0.1584 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.006 | +0.0291 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.604 | +0.0263 | Higher Net-to-Gross increases predicted margin | |
| Bed Utilization Value | 292147.257 | -0.0193 | Lower Bed Utilization Value decreases predicted ma |
nan%
Distress Risk
$4.1M
RCM Opportunity
A
Opportunity Grade
32.7%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
TN distress rate: 43.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.730 | -0.190 | ▼ risk |
| Medicare Day Pct | 0.567 | +0.041 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.604 | +0.105 | ▲ risk |
| Revenue Per Bed | 400239.275 | +0.070 | ▲ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.1M
Current margin: 7.3%
Projected margin: 32.7%
Grade: A
Comps: 67
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 | 0.433 | 0.705 | 27.2% | $4.1M | 50% | 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. |