ML Analysis — THE ORTHOPEDIC SPECIALTY HOSPITAL
CCN 460049 | 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.
52
/ 100 (C)
Financial Health16/25
RCM Upside6/25
Market Position13/20
Demand Defensibility3/15
Operational Efficiency13/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
0.9%
R²=0.34 | n=4,907 | Grade B | Actual: 12.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-27.4%, 29.2%]. P64 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | 0.080 | +0.0933 | Higher State Peer Margin increases predicted margi | |
| Revenue/Bed | 2218603.825 | +0.0892 | Higher Revenue/Bed increases predicted margin | |
| Reimbursement Quality | 0.326 | -0.0359 | Higher Reimbursement Quality decreases predicted m | |
| Expense/Bed | 1944257.900 | -0.0354 | Higher Expense/Bed decreases predicted margin | |
| Occupancy | 0.046 | -0.0272 | Lower Occupancy decreases predicted margin |
Suburban Community Hospit
Archetype
57.2%
Distress Risk
$6.4M
RCM Opportunity
C
Opportunity Grade
19.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P88. 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%
UT distress rate: 25.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.046 | +0.445 | ▲ risk |
| Medicaid Day Pct | 0.006 | -0.083 | ▼ risk |
| Revenue Per Bed | 2218603.825 | -0.038 | ▼ risk |
| Net To Gross Ratio | 0.426 | +0.026 | ▲ risk |
| Medicare Day Pct | 0.228 | -0.017 | ▼ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.4M
Current margin: 12.4%
Projected margin: 19.6%
Grade: C
Comps: 25
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.046 | 0.571 | 52.6% | $3.5M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.426 | 0.681 | 25.5% | $2.6M | 65% | 18mo |
| Payer Mix Optimization | 0.766 | 0.785 | 1.9% | $289K | 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 | 27.9 | [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. |