ML Analysis — DECATUR COMMUNITY HOSPITAL
CCN 450271 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
62
/ 100 (B)
Financial Health8/25
RCM Upside20/25
Market Position15/20
Demand Defensibility11/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
1.6%
R²=0.34 | n=4,907 | Grade B | Actual: -15.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-26.7%, 29.9%]. P66 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 5148096.864 | -0.4300 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 4456451.617 | +0.4016 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 2574989.446 | +0.0565 | Higher Bed Utilization Value increases predicted m | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.252 | -0.0131 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 53%Turnaround possible (53%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
40.4%
Distress Risk
$11.6M
RCM Opportunity
D
Opportunity Grade
-12.3%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P82. 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: Elevated
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 4456451.617 | -0.170 | ▼ risk |
| Medicaid Day Pct | 0.008 | -0.081 | ▼ risk |
| Net To Gross Ratio | 0.252 | -0.052 | ▼ risk |
| Occupancy Rate | 0.578 | -0.049 | ▼ risk |
| Beds | 81.000 | -0.009 | ▼ risk |
| Medicare Day Pct | 0.320 | -0.001 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $11.6M
Current margin: -15.5%
Projected margin: -12.3%
Grade: D
Comps: 206
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 | 0.252 | 0.448 | 19.6% | $8.3M | 65% | 18mo |
| Payer Mix Optimization | 0.673 | 0.818 | 14.6% | $2.2M | 50% | 24mo |
| Occupancy Improvement | 0.578 | 0.740 | 16.2% | $1.1M | 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 | 27.8 | [25.0, 75.0] | P43 | 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. |