ML Analysis — HCA HOUSTON HEALTHCARE PEARLAND
CCN 670106 | 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.
49
/ 100 (C)
Financial Health7/25
RCM Upside21/25
Market Position13/20
Demand Defensibility6/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
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)
4.7%
R²=0.34 | n=4,907 | Grade B | Actual: -8.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-23.6%, 33.0%]. P73 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Reimbursement Quality | 0.075 | +0.0364 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 1871153.506 | +0.0331 | Higher Bed Utilization Value increases predicted m | |
| Expense/Bed | 1910116.188 | -0.0312 | Higher Expense/Bed decreases predicted margin | |
| Net-to-Gross | 0.092 | -0.0310 | Lower Net-to-Gross decreases predicted margin | |
| Occupancy | 1.065 | +0.0306 | Higher Occupancy increases predicted margin |
Turnaround: 58%Turnaround possible (58%) but uncertain. Margin improvement depends on Reimbursement Quality.
Suburban Community Hospit
Archetype
31.5%
Distress Risk
$4.1M
RCM Opportunity
D
Opportunity Grade
-3.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P85. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 1.064 | -0.501 | ▼ risk |
| Net To Gross Ratio | 0.092 | -0.123 | ▼ risk |
| Medicaid Day Pct | 0.011 | -0.078 | ▼ risk |
| Medicare Day Pct | 0.174 | -0.026 | ▼ risk |
| Beds | 48.000 | -0.013 | ▼ risk |
| Revenue Per Bed | 1757780.667 | -0.011 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.1M
Current margin: -8.7%
Projected margin: -3.8%
Grade: D
Comps: 280
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 | 0.092 | 0.511 | 41.9% | $4.1M | 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 | 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. |