ML Analysis — CARILION FRANKLIN MEMORIAL HOSPITAL
CCN 490089 | 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.
54
/ 100 (C)
Financial Health8/25
RCM Upside17/25
Market Position17/20
Demand Defensibility8/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
1.2%
R²=0.34 | n=4,907 | Grade B | Actual: -0.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-27.1%, 29.5%]. P65 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | 0.044 | +0.0666 | Higher State Peer Margin increases predicted margi | |
| Log(Beds) | 3.611 | -0.0177 | Lower Log(Beds) decreases predicted margin | |
| Bed Count | 37.000 | +0.0174 | Higher Bed Count increases predicted margin | |
| Revenue/Bed | 1670444.405 | +0.0127 | Higher Revenue/Bed increases predicted margin | |
| Net-to-Gross | 0.285 | -0.0093 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 52%Turnaround possible (52%) but uncertain. Margin improvement depends on State Peer Margin.
Suburban Community Hospit
Archetype
47.9%
Distress Risk
$3.4M
RCM Opportunity
D
Opportunity Grade
4.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P0. 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%
VA distress rate: 29.6%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.041 | -0.048 | ▼ risk |
| Occupancy Rate | 0.481 | +0.041 | ▲ risk |
| Net To Gross Ratio | 0.285 | -0.037 | ▼ risk |
| Beds | 37.000 | -0.015 | ▼ risk |
| Medicare Day Pct | 0.365 | +0.007 | ▲ risk |
| Revenue Per Bed | 1670444.405 | -0.005 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.4M
Current margin: -0.7%
Projected margin: 4.8%
Grade: D
Comps: 40
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.481 | 0.763 | 28.2% | $1.9M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.285 | 0.456 | 17.0% | $1.2M | 65% | 18mo |
| Payer Mix Optimization | 0.594 | 0.617 | 2.3% | $345K | 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 | 29.2 | [25.0, 75.0] | P52 | 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. |