ML Analysis — REEDSBURG AREA MEDICAL CENTER
CCN 521351 | 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.
60
/ 100 (C)
Financial Health7/25
RCM Upside20/25
Market Position15/20
Demand Defensibility8/15
Operational Efficiency10/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.4%
R²=0.34 | n=4,907 | Grade B | Actual: -8.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.7%, 26.9%]. P59 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 3507008.240 | +0.2691 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 3789511.920 | -0.2627 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | 0.004 | +0.0371 | Higher State Peer Margin increases predicted margi | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 1494273.758 | +0.0206 | Higher Bed Utilization Value increases predicted m |
Turnaround: 48%Turnaround possible (48%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
51.8%
Distress Risk
$3.4M
RCM Opportunity
D
Opportunity Grade
-4.2%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P61. 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%
WI distress rate: 34.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 3507008.240 | -0.114 | ▼ risk |
| Occupancy Rate | 0.426 | +0.092 | ▲ risk |
| Net To Gross Ratio | 0.516 | +0.066 | ▲ risk |
| Medicaid Day Pct | 0.150 | +0.061 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
| Medicare Day Pct | 0.401 | +0.013 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.4M
Current margin: -8.1%
Projected margin: -4.2%
Grade: D
Comps: 87
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 | 0.450 | 0.636 | 18.6% | $2.8M | 50% | 24mo |
| Occupancy Improvement | 0.426 | 0.499 | 7.3% | $484K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.516 | 0.530 | 1.5% | $149K | 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. |