ML Analysis — SACRED HEART HOSPITAL
CCN 520013 | 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 Health9/25
RCM Upside19/25
Market Position15/20
Demand Defensibility12/15
Operational Efficiency6/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-3.0%
R²=0.34 | n=4,907 | Grade B | Actual: -12.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-31.3%, 25.3%]. P54 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | 0.004 | +0.0371 | Higher State Peer Margin increases predicted margi | |
| Revenue/Bed | 1333509.449 | -0.0343 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1496404.686 | +0.0198 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 5.050 | +0.0157 | Higher Log(Beds) increases predicted margin | |
| Bed Utilization Value | 706731.904 | -0.0055 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 45%Turnaround possible (45%) but uncertain. Margin improvement depends on State Peer Margin.
Suburban Community Hospit
Archetype
49.1%
Distress Risk
$3.4M
RCM Opportunity
D
Opportunity Grade
-10.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P35. 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%
WI distress rate: 34.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.064 | -0.024 | ▼ risk |
| Revenue Per Bed | 1333509.449 | +0.015 | ▲ risk |
| Occupancy Rate | 0.530 | -0.004 | ▼ risk |
| Medicare Day Pct | 0.352 | +0.004 | ▲ risk |
| Beds | 156.000 | +0.001 | ▲ risk |
| Net To Gross Ratio | 0.370 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.4M
Current margin: -12.2%
Projected margin: -10.6%
Grade: D
Comps: 34
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 | 0.583 | 0.742 | 15.8% | $2.4M | 50% | 24mo |
| Occupancy Improvement | 0.530 | 0.644 | 11.4% | $752K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.370 | 0.381 | 1.1% | $278K | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |