ML Analysis — SOUTH TEXAS HEALTH SYSTEM
CCN 450119 | 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.
53
/ 100 (C)
Financial Health20/25
RCM Upside7/25
Market Position11/20
Demand Defensibility10/15
Operational Efficiency5/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-7.2%
R²=0.34 | n=4,907 | Grade B | Actual: 12.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.5%, 21.1%]. P44 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 742663.755 | +0.1127 | Higher Expense/Bed increases predicted margin | |
| Bed Count | 835.000 | -0.1071 | Higher Bed Count decreases predicted margin | |
| Revenue/Bed | 850545.265 | -0.1017 | Lower Revenue/Bed decreases predicted margin | |
| Log(Beds) | 6.727 | +0.0547 | Higher Log(Beds) increases predicted margin | |
| Reimbursement Quality | 0.070 | +0.0378 | Higher Reimbursement Quality increases predicted m |
Large Academic Medical Ce
Archetype
46.0%
Distress Risk
$17.6M
RCM Opportunity
D
Opportunity Grade
15.2%
Projected Margin
Cluster: Large Academic Medical Center
Percentile within cluster: P81. Large medical centers trade at premium multiples (12-14x). Limited PE value creation but strong cash flow.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| NORTH CAROLINA BAPTIST HOSPITAL | NC | 800 |
| HACKENSACK UNIVERSITY MEDICAL CENTER | NJ | 779 |
| TEMPLE UNIVERSITY HOSPITAL | PA | 761 |
| VCU HEALTH SYSTEM MCV HOSPITAL | VA | 842 |
| UH CLEVELAND MEDICAL CENTER | OH | 660 |
| FROEDTERT MEM. LUTHERAN HOSPT. | WI | 731 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.085 | -0.126 | ▼ risk |
| Beds | 835.000 | +0.092 | ▲ risk |
| Occupancy Rate | 0.618 | -0.087 | ▼ risk |
| Revenue Per Bed | 850545.265 | +0.043 | ▲ risk |
| Medicare Day Pct | 0.103 | -0.038 | ▼ risk |
| Medicaid Day Pct | 0.070 | -0.019 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $17.6M
Current margin: 12.7%
Projected margin: 15.2%
Grade: D
Comps: 33
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 | 0.085 | 0.281 | 19.6% | $16.3M | 65% | 18mo |
| Occupancy Improvement | 0.618 | 0.820 | 20.2% | $1.3M | 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. |