ML Analysis — MERCY HEALTH SYSTEM CORPORATION
CCN 520066 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Pass — risk/return profile does not justify PE capital deployment at market multiples.
27
/ 100 (F)
Financial Health0/25
RCM Upside5/25
Market Position13/20
Demand Defensibility9/15
Operational Efficiency0/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-55.8%
R²=0.34 | n=4,907 | Grade B
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-84.1%, -27.5%]. P0 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | -714273.055 | -0.3202 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 3236866.060 | -0.1946 | Higher Expense/Bed decreases predicted margin | |
| Reimbursement Quality | 0.000 | +0.0580 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.000 | -0.0413 | Lower Net-to-Gross decreases predicted margin | |
| Bed Utilization Value | -320008.952 | -0.0396 | Lower Bed Utilization Value decreases predicted ma |
49.2%
Distress Risk
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
WI distress rate: 34.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.000 | -0.164 | ▼ risk |
| Revenue Per Bed | -714273.055 | +0.135 | ▲ risk |
| Occupancy Rate | 0.448 | +0.072 | ▲ risk |
| Medicaid Day Pct | 0.041 | -0.048 | ▼ risk |
| Medicare Day Pct | 0.295 | -0.006 | ▼ risk |
| Beds | 182.000 | +0.004 | ▲ risk |
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 | 27.9 | [25.0, 75.0] | P43 | 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. |