ML Analysis — WEBSTER SURGICAL SPECIALTY HOSPITAL
CCN 670008 | 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.
46
/ 100 (C)
Financial Health7/25
RCM Upside18/25
Market Position9/20
Demand Defensibility6/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-1.4%
R²=0.34 | n=4,907 | Grade B | Actual: -2.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.7%, 26.9%]. P59 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 4247747.550 | +0.3725 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 4366954.050 | -0.3338 | Higher Expense/Bed decreases predicted margin | |
| Reimbursement Quality | 0.083 | +0.0342 | Higher Reimbursement Quality increases predicted m | |
| Log(Beds) | 2.996 | -0.0320 | Lower Log(Beds) decreases predicted margin | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi |
Turnaround: 48%Turnaround possible (48%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
47.7%
Distress Risk
$7.7M
RCM Opportunity
C
Opportunity Grade
6.2%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P82. 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%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.214 | +0.289 | ▲ risk |
| Revenue Per Bed | 4247747.550 | -0.158 | ▼ risk |
| Net To Gross Ratio | 0.135 | -0.104 | ▼ risk |
| Medicaid Day Pct | 0.001 | -0.088 | ▼ risk |
| Beds | 20.000 | -0.017 | ▼ risk |
| Medicare Day Pct | 0.389 | +0.011 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $7.7M
Current margin: -2.8%
Projected margin: 6.2%
Grade: C
Comps: 220
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 | 0.135 | 0.542 | 40.7% | $4.0M | 65% | 18mo |
| Occupancy Improvement | 0.214 | 0.523 | 30.9% | $2.0M | 55% | 24mo |
| Payer Mix Optimization | 0.610 | 0.717 | 10.7% | $1.6M | 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 | 34.2 | [25.0, 75.0] | P78 | 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. |