ML Analysis — VCU HEALTH TAPPAHANNOCK HOSPITAL
CCN 490084 | 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.
55
/ 100 (C)
Financial Health7/25
RCM Upside17/25
Market Position17/20
Demand Defensibility9/15
Operational Efficiency4/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-2.6%
R²=0.34 | n=4,907 | Grade B | Actual: -3.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.9%, 25.7%]. P56 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1039039.632 | -0.0754 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1073262.930 | +0.0719 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | 0.044 | +0.0666 | Higher State Peer Margin increases predicted margi | |
| Reimbursement Quality | 0.133 | +0.0197 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 351989.970 | -0.0173 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 46%Turnaround possible (46%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
54.5%
Distress Risk
$6.4M
RCM Opportunity
B
Opportunity Grade
7.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P40. 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%
VA distress rate: 29.6%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.339 | +0.173 | ▲ risk |
| Medicaid Day Pct | 0.126 | +0.037 | ▲ risk |
| Net To Gross Ratio | 0.285 | -0.037 | ▼ risk |
| Revenue Per Bed | 1039039.632 | +0.032 | ▲ risk |
| Medicare Day Pct | 0.408 | +0.014 | ▲ risk |
| Beds | 57.000 | -0.012 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.4M
Current margin: -3.3%
Projected margin: 7.6%
Grade: B
Comps: 52
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 | 0.466 | 0.685 | 22.0% | $3.3M | 50% | 24mo |
| Occupancy Improvement | 0.339 | 0.761 | 42.2% | $2.8M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.285 | 0.336 | 5.0% | $348K | 65% | 18mo |
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 | 29.4 | [25.0, 75.0] | P53 | 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. |