ML Analysis — EVERGREEN HEALTH MONROE
CCN 500084 | 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.
46
/ 100 (C)
Financial Health3/25
RCM Upside19/25
Market Position13/20
Demand Defensibility7/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-14.5%
R²=0.34 | n=4,907 | Grade B | Actual: -10.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-42.8%, 13.8%]. P28 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | -0.103 | -0.0426 | Lower State Peer Margin decreases predicted margin | |
| Expense/Bed | 1993442.577 | -0.0414 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 1805544.192 | +0.0316 | Higher Revenue/Bed increases predicted margin | |
| Log(Beds) | 3.258 | -0.0259 | Lower Log(Beds) decreases predicted margin | |
| Bed Count | 26.000 | +0.0191 | Higher Bed Count increases predicted margin |
Turnaround: 26%Low turnaround probability (26%). Structural disadvantages in State Peer Margin and Expense/Bed.
Suburban Community Hospit
Archetype
51.4%
Distress Risk
$3.6M
RCM Opportunity
C
Opportunity Grade
-2.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P49. 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%
WA distress rate: 67.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.299 | +0.210 | ▲ risk |
| Medicaid Day Pct | 0.013 | -0.075 | ▼ risk |
| Net To Gross Ratio | 0.309 | -0.026 | ▼ risk |
| Beds | 26.000 | -0.016 | ▼ risk |
| Revenue Per Bed | 1805544.192 | -0.013 | ▼ risk |
| Medicare Day Pct | 0.362 | +0.006 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.6M
Current margin: -10.4%
Projected margin: -2.7%
Grade: C
Comps: 42
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.299 | 0.582 | 28.4% | $1.9M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.309 | 0.613 | 30.4% | $1.7M | 65% | 18mo |
| Payer Mix Optimization | 0.625 | 0.629 | 0.4% | $61K | 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 | 32.1 | [25.0, 75.0] | P71 | 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. |