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Almost everyone thought the Indiana Pacers would be worse this season. Replacing the departed Lance Stephenson and the injured Paul George with Rodney Stuckey and C.J. Miles was a step backward, no matter what sort of shine was put on it.

The ESPN Forecast panel, a collection of over 200 affiliated basketball writers, picked the Pacers for 37 wins, finishing 10th in the East. Bleacher Report's own Josh Martin predicted the Pacers at 35 wins. Drifting through other basketball sites, you would probably have found a general consensus on a preseason win prediction for the Pacers in the mid-to-high 30s.

Through their first 12 games, the Pacers are 5-7, with a point differential that puts them on pace for 34 wins. With the gift of playing in the Eastern Conference they're actually in playoff position—currently in the eighth spot, a game up on the Boston Celtics.

With production matching projections, it may seem strange to make the argument that the Pacers have underperformed their potential. But I believe that's the case. With a little bit of health, the Pacers have the potential to improve significantly over the course of this season, blowing those mid-30s win predictions out of the water.

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While subjective preseason predictions of the Pacers were not kind, those with a statistical underpinning were a little more optimistic. Two different sets of statistical win projections, based on ESPN's Real Plus-Minus, saw the Pacers as a potential playoff team in the Eastern Conference. Both Neil Paine of FiveThirtyEight and Nathan Walker of Nylon Calculus projected the Pacers at 41 wins and as the seventh seed in the East.

Those rosier projections were based on the expectation that Roy Hibbert would bounce back from a disappointing season, and that George Hill and David West would continue to produce as solid, reliable, above-average players.

In addition to West and Hill, C.J. Watson, Stuckey and Miles were all expected to play key roles for the Pacers this season. Instead, they've been keeping the medical staff busy. Watson, West and Hill have yet to play, and Stuckey and Miles have played a combined total of just 225 minutes.

Given that four-fifths of their projected starting lineup, as well as their projected backup point guard, have barely played puts the Pacers' 5-7 start in a whole different light. Relying mostly on end-of-the bench players and unexpected contributors, the team has looked surprisingly frisky.

Their Nov. 19th win over the Charlotte Hornets was a perfect example of how the Pacers will have to win this season. They scraped, scratched and clawed, getting a great defensive performance and just enough scoring to keep the game within reach. Afterward, Frank Vogel talked to the Indianapolis Star's Candace Buckner about the pattern:

We talked about this at halftime, we were shooting the ball horribly. We talked about, these are the games you got to learn how to win. When you're not shooting the ball well, still find a way, do other things, find a way to win the game. Final play exemplified that.

That final play Vogel is referring to was a game-winning offensive rebound and putback by Solomon Hill.

The offense has struggled, as expected, averaging just 101.9 points per 100 possessions, the 26th-best mark in the league. They've been able to keep things afloat with a defense that has continued to perform.

Through 12 games, the Pacers are allowing 104.0 points per 100 possessions, the seventh-best mark in the league. That is a big defensive drop-off from where they sat last season, but it's a number strong enough to keep them competitive in most games.

Admittedly, the Pacers have had an easy schedule to start the season—seventh-easiest in the league, according to Basketball-Reference. But those offensive and defensive efficiencies should improve when West, Hill and Watson—three of the Pacers' six best players from last season, according to Basketball-Reference's Box Plus-Minus—return to the lineup.

Stuckey adds an off-the-dribble creator the Pacers offense has desperately needed. Miles is a reliable outside shooter who can both defend his position and help space the floor.

While the Pacers will get better as injured players return to the floor, they should also improve as some of their early surprises continue to develop. Solomon Hill has been an enormous surprise and looks ready to contribute in a big way throughout the season.

In a round-table discussion at NBA.com, John Schuhmann talked about Solomon Hill as a player who had really impressed early this season:

Solomon Hill is a guy who spent a lot of time on the inactive list as a rookie last year and who looked a little overwhelmed at the start of this season. But he’s shown a lot of improvement as the depleted Pacers have won three of their last four. I don’t know if he’s ever going to be a full-time starter in this league, and he basically “opened my eyes” in one game, looking rather comfortable running the pick-and-roll and finding good shots against the Bulls’ defense on Saturday. But he could be a solid rotation guy as the Pacers get healthy, with this experience as a starter being an important part of his development.

In addition, Roy Hibbert has looked very solid, continuing to control the interior on defense as well as finishing around the rim much better than he did last season. Lavoy Allen has also been a pleasantly unexpected contributor, doing great work on the glass and revealing a dangerous pick-and-pop game.

You can make an argument that playing up to their abilities this season may not be the best long-term plan for the Pacers. A high lottery pick would be a great way to help reload for a deep playoff run when George returns next season. That being said, this team appears to be all in on an effort to win as many games as possible this season.

If they can just get healthy, that number could be far higher than most people expected.