ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 453059 | 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.
39
/ 100 (D)
Financial Health6/25
RCM Upside17/25
Market Position4/20
Demand Defensibility7/15
Operational Efficiency4/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
Catalysts:
Margin Prediction (Trained Ridge Model)
-4.8%
R²=0.34 | n=4,907 | Grade B | Actual: -2.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.1%, 23.5%]. P50 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 226282.131 | -0.1889 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 231644.762 | +0.1756 | Higher Expense/Bed increases predicted margin | |
| Net-to-Gross | 0.803 | +0.0488 | Higher Net-to-Gross increases predicted margin | |
| Reimbursement Quality | 0.336 | -0.0386 | Higher Reimbursement Quality decreases predicted m | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi |
Turnaround: 42%Turnaround possible (42%) but uncertain. Margin improvement depends on improving Revenue/Bed.
nan%
Distress Risk
$8.8M
RCM Opportunity
A
Opportunity Grade
44.1%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.344 | +0.168 | ▲ risk |
| Medicare Day Pct | 0.582 | +0.044 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.804 | +0.194 | ▲ risk |
| Revenue Per Bed | 226282.131 | +0.080 | ▲ risk |
| Beds | 84.000 | -0.009 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.8M
Current margin: -2.4%
Projected margin: 44.1%
Grade: A
Comps: 204
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 | 0.418 | 0.827 | 40.9% | $6.1M | 50% | 24mo |
| Occupancy Improvement | 0.344 | 0.753 | 40.9% | $2.7M | 55% | 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. |