ML Analysis — ENCOMPASS HEALTH REHABILITATION OF W
CCN 673079 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
43
/ 100 (D)
Financial Health10/25
RCM Upside14/25
Market Position8/20
Demand Defensibility5/15
Operational Efficiency5/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-1.3%
R²=0.34 | n=4,907 | Grade B | Actual: 1.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.6%, 27.0%]. P59 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 393189.725 | -0.1656 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 387178.450 | +0.1565 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.620 | +0.0281 | Higher Net-to-Gross increases predicted margin | |
| Bed Utilization Value | 224398.315 | -0.0215 | Lower Bed Utilization Value decreases predicted ma |
nan%
Distress Risk
$7.3M
RCM Opportunity
A
Opportunity Grade
47.9%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.620 | +0.112 | ▲ risk |
| Medicare Day Pct | 0.693 | +0.063 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Revenue Per Bed | 393189.725 | +0.070 | ▲ risk |
| Occupancy Rate | 0.571 | -0.042 | ▼ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $7.3M
Current margin: 1.5%
Projected margin: 47.9%
Grade: A
Comps: 286
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.307 | 0.738 | 43.1% | $6.5M | 50% | 24mo |
| Occupancy Improvement | 0.571 | 0.695 | 12.4% | $821K | 55% | 24mo |
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. |