ML Analysis — NORTON COMMUNITY HOSPITAL INC.
CCN 490001 | 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.
51
/ 100 (C)
Financial Health4/25
RCM Upside19/25
Market Position17/20
Demand Defensibility10/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
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)
-2.9%
R²=0.34 | n=4,907 | Grade B | Actual: -22.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-31.2%, 25.4%]. P55 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 377586.693 | -0.1677 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 462279.129 | +0.1472 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | 0.044 | +0.0666 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 176004.120 | -0.0231 | Lower Bed Utilization Value decreases predicted ma | |
| Reimbursement Quality | 0.136 | +0.0188 | Higher Reimbursement Quality increases predicted m |
Turnaround: 45%Turnaround possible (45%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Under-Performing / Distre
Archetype
48.6%
Distress Risk
$2.7M
RCM Opportunity
B
Opportunity Grade
-10.9%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P5. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
VA distress rate: 29.6%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.202 | -0.074 | ▼ risk |
| Revenue Per Bed | 377586.694 | +0.071 | ▲ risk |
| Medicaid Day Pct | 0.023 | -0.066 | ▼ risk |
| Occupancy Rate | 0.466 | +0.055 | ▲ risk |
| Beds | 62.000 | -0.012 | ▼ risk |
| Medicare Day Pct | 0.302 | -0.004 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.7M
Current margin: -22.4%
Projected margin: -10.9%
Grade: B
Comps: 54
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.466 | 0.775 | 30.9% | $2.0M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.202 | 0.324 | 12.2% | $335K | 65% | 18mo |
| Payer Mix Optimization | 0.675 | 0.697 | 2.2% | $326K | 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 | 30.1 | [25.0, 75.0] | P59 | 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. |