ML Analysis — THE WOODLANDS SPECIALTY HOSPITAL
CCN 670267 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Pass — risk/return profile does not justify PE capital deployment at market multiples.
29
/ 100 (F)
Financial Health3/25
RCM Upside18/25
Market Position4/20
Demand Defensibility1/15
Operational Efficiency2/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-28.8%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-57.1%, -0.5%]. P13 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 3444639.167 | -0.2202 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 1.792 | -0.0600 | Lower Log(Beds) decreases predicted margin | |
| Revenue/Bed | 1940416.833 | +0.0504 | Higher Revenue/Bed increases predicted margin | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi | |
| Occupancy | 0.051 | -0.0269 | Lower Occupancy decreases predicted margin |
Turnaround: 12%Low turnaround probability (12%). Structural disadvantages in Expense/Bed and Log(Beds).
nan%
Distress Risk
$2.9M
RCM Opportunity
A
Opportunity Grade
-24.7%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.051 | +0.440 | ▲ risk |
| Medicare Day Pct | 0.089 | -0.041 | ▼ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.144 | -0.100 | ▼ risk |
| Revenue Per Bed | 1940416.833 | -0.021 | ▼ risk |
| Beds | 6.000 | -0.019 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.9M
Current margin: -50.0%
Projected margin: -24.7%
Grade: A
Comps: 114
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.051 | 0.380 | 32.9% | $2.2M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.144 | 0.715 | 57.1% | $778K | 65% | 18mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |