ML Analysis — COMMUNITY MEMORIAL HOSPITAL
CCN 490098 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
61
/ 100 (B)
Financial Health7/25
RCM Upside20/25
Market Position17/20
Demand Defensibility11/15
Operational Efficiency6/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
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)
-2.2%
R²=0.34 | n=4,907 | Grade B | Actual: -31.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.5%, 26.1%]. P56 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2682774.530 | -0.1263 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | 0.044 | +0.0666 | Higher State Peer Margin increases predicted margi | |
| Revenue/Bed | 2047794.121 | +0.0654 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 1268119.249 | +0.0131 | Higher Bed Utilization Value increases predicted m | |
| Bed Count | 66.000 | +0.0129 | Higher Bed Count increases predicted margin |
Turnaround: 46%Turnaround possible (46%) but uncertain. Margin improvement depends on improving Expense/Bed.
Under-Performing / Distre
Archetype
43.7%
Distress Risk
$3.3M
RCM Opportunity
D
Opportunity Grade
-28.5%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P44. 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 |
|---|---|---|---|
| Occupancy Rate | 0.619 | -0.087 | ▼ risk |
| Medicaid Day Pct | 0.024 | -0.064 | ▼ risk |
| Net To Gross Ratio | 0.275 | -0.042 | ▼ risk |
| Revenue Per Bed | 2047794.121 | -0.028 | ▼ risk |
| Beds | 66.000 | -0.011 | ▼ risk |
| Medicare Day Pct | 0.365 | +0.006 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.3M
Current margin: -31.0%
Projected margin: -28.5%
Grade: D
Comps: 56
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 | 0.611 | 0.709 | 9.9% | $1.5M | 50% | 24mo |
| Occupancy Improvement | 0.619 | 0.783 | 16.4% | $1.1M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.275 | 0.323 | 4.8% | $757K | 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 | 29.3 | [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. |