ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 713028 | 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.
50
/ 100 (C)
Financial Health9/25
RCM Upside14/25
Market Position14/20
Demand Defensibility8/15
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:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-2.2%
R²=0.34 | n=4,907 | Grade B | Actual: 2.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.5%, 26.1%]. P56 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 445340.000 | -0.1583 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 432717.475 | +0.1508 | Higher Expense/Bed increases predicted margin | |
| Occupancy × Net-to-Gross | 0.441 | +0.0190 | Higher Occupancy × Net-to-Gross increases predicte | |
| Occupancy | 0.857 | +0.0189 | Higher Occupancy increases predicted margin | |
| Bed Count | 40.000 | +0.0170 | Higher Bed Count increases predicted margin |
Suburban Community Hospit
Archetype
43.5%
Distress Risk
$4.9M
RCM Opportunity
A
Opportunity Grade
30.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P88. 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%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.857 | -0.308 | ▼ risk |
| Medicaid Day Pct | 0.004 | -0.085 | ▼ risk |
| Revenue Per Bed | 445340.000 | +0.067 | ▲ risk |
| Net To Gross Ratio | 0.514 | +0.065 | ▲ risk |
| Medicare Day Pct | 0.566 | +0.041 | ▲ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.9M
Current margin: 2.8%
Projected margin: 30.4%
Grade: A
Comps: 125
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 | 0.431 | 0.751 | 32.0% | $4.8M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.514 | 0.562 | 4.8% | $100K | 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 | 25.8 | [25.0, 75.0] | P32 | 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. |