ML Analysis — METHODIST HOSPITAL SOUTH
CCN 450165 | 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.
44
/ 100 (D)
Financial Health9/25
RCM Upside13/25
Market Position15/20
Demand Defensibility6/15
Operational Efficiency1/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-6.5%
R²=0.34 | n=4,907 | Grade B | Actual: 2.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-34.8%, 21.8%]. P46 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 576568.000 | -0.1400 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 561080.328 | +0.1350 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.082 | +0.0343 | Higher Reimbursement Quality increases predicted m | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.111 | -0.0289 | Lower Net-to-Gross decreases predicted margin |
Suburban Community Hospit
Archetype
53.5%
Distress Risk
$6.3M
RCM Opportunity
A
Opportunity Grade
19.0%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P74. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PROMEDICA HICKMAN HOSPITAL | MI | 58 |
| WATAUGA MEDICAL CENTER | NC | 95 |
| ST LUKES HOSPITAL - EASTON CAMPUS | PA | 29 |
| CULPEPER MEMORIAL HOSPITAL | VA | 70 |
| SOUTHSIDE COMMUNITY HOSPITAL | VA | 80 |
| SPECTRUM HEALTH LUDINGTON | MI | 45 |
Distress Analysis
Risk: High
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.170 | +0.330 | ▲ risk |
| Net To Gross Ratio | 0.111 | -0.115 | ▼ risk |
| Medicaid Day Pct | 0.005 | -0.084 | ▼ risk |
| Revenue Per Bed | 576568.000 | +0.059 | ▲ risk |
| Medicare Day Pct | 0.251 | -0.013 | ▼ risk |
| Beds | 67.000 | -0.011 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.3M
Current margin: 2.7%
Projected margin: 19.0%
Grade: A
Comps: 223
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.170 | 0.750 | 58.1% | $3.8M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.111 | 0.486 | 37.5% | $1.7M | 65% | 18mo |
| Payer Mix Optimization | 0.744 | 0.795 | 5.1% | $765K | 50% | 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 | 30.3 | [25.0, 75.0] | P61 | 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. |