ML Analysis — MERCY WALWORTH HOSPITAL
CCN 521357 | 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.
66
/ 100 (B)
Financial Health19/25
RCM Upside15/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency9/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
72.9%
R²=0.34 | n=4,907 | Grade B | Actual: 4.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [44.6%, 101.2%]. P100 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 24656706.600 | +3.2214 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 23564384.920 | -2.6988 | Higher Expense/Bed decreases predicted margin | |
| Bed Utilization Value | 8573778.635 | +0.2555 | Higher Bed Utilization Value increases predicted m | |
| 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 |
Under-Performing / Distre
Archetype
21.7%
Distress Risk
$19.2M
RCM Opportunity
D
Opportunity Grade
7.5%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P50. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PARKLAND HLTH CTR - BONNE TERRE | MO | 3 |
| LAGUNA HONDA HOSPITAL | CA | 6 |
| WENATCHEE VALLEY HOSPITAL | WA | 11 |
| FRED HUTCHINSON CANCER CENTER | WA | 20 |
| DANA-FARBER CANCER INSTITUTE | MA | 30 |
Distress Analysis
Risk: Moderate
National distress rate: 49.3%
WI distress rate: 34.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 24656706.600 | -1.362 | ▼ risk |
| Occupancy Rate | 0.348 | +0.165 | ▲ risk |
| Net To Gross Ratio | 0.290 | -0.035 | ▼ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
| Medicaid Day Pct | 0.081 | -0.008 | ▼ risk |
| Medicare Day Pct | 0.339 | +0.002 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $19.2M
Current margin: 4.4%
Projected margin: 7.5%
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 |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.290 | 0.530 | 24.1% | $17.4M | 65% | 18mo |
| Occupancy Improvement | 0.348 | 0.499 | 15.2% | $1.0M | 55% | 24mo |
| Payer Mix Optimization | 0.580 | 0.636 | 5.6% | $842K | 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 | 30.4 | [25.0, 75.0] | P61 | 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. |