ML Analysis — MEMORIAL HERMANN KINGWOOD
CCN 670005 | 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.
48
/ 100 (C)
Financial Health15/25
RCM Upside7/25
Market Position11/20
Demand Defensibility4/15
Operational Efficiency11/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
1.3%
R²=0.34 | n=4,907 | Grade B | Actual: 14.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-27.0%, 29.6%]. P66 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 3411590.300 | +0.2558 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2917742.200 | -0.1553 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 2.303 | -0.0481 | Lower Log(Beds) decreases predicted margin | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi | |
| Bed Count | 10.000 | +0.0216 | Higher Bed Count increases predicted margin |
Suburban Community Hospit
Archetype
50.1%
Distress Risk
$2.4M
RCM Opportunity
C
Opportunity Grade
21.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P77. 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%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.187 | +0.314 | ▲ risk |
| Revenue Per Bed | 3411590.300 | -0.108 | ▼ risk |
| Medicaid Day Pct | 0.004 | -0.084 | ▼ risk |
| Net To Gross Ratio | 0.234 | -0.060 | ▼ risk |
| Beds | 10.000 | -0.019 | ▼ risk |
| Medicare Day Pct | 0.252 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.4M
Current margin: 14.5%
Projected margin: 21.6%
Grade: C
Comps: 64
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 | 0.234 | 0.653 | 41.8% | $1.7M | 65% | 18mo |
| Occupancy Improvement | 0.187 | 0.300 | 11.4% | $750K | 55% | 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 | 33.7 | [25.0, 75.0] | P77 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.2% | [90.0%, 99.5%] | P5 | Strong — predicted net collection rate is in the top third. |