Hospital Archetypes (K-Means Clustering)
Unsupervised clustering of 6,123 US hospitals into 7 investable archetypes based on size, revenue, margins, payer mix, and occupancy. Each cluster has a distinct risk/return profile for PE evaluation.
Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
High Medicaid dependence creates reimbursement risk. Assess DSH payments and state expansion status.
Large medical centers trade at premium multiples (12-14x). Limited PE value creation but strong cash flow.
Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Distress Risk Screening (Logistic Regression)
Hospitals ranked by predicted probability of financial distress (operating margin < -5%). Model AUC = 0.629 on 4,907 training samples. High-distress hospitals are potential turnaround acquisition targets at discounted multiples.
RCM Performance Screening (Predicted from Public Data)
Hospitals with the worst predicted RCM metrics — highest denial rates, longest AR days. These are potential PE targets where RCM improvement could create the most value. Predictions use HCRIS financials + payer mix + geography only (no internal data needed).
| Hospital | State | Beds | Est Denial | Est AR Days | Est Clean Claim | RCM Score |
|---|---|---|---|---|---|---|
| ASPEN HILLS HEALTHCARE CENTER | NJ | 30 | 25.0% | 75d | 98.0% | 50 |
| FALLBROOK HOSPITAL | CA | 0 | 25.0% | 75d | 98.0% | 50 |
| SAN GORGONIO MEMORIAL | CA | 79 | 25.0% | 75d | 98.0% | 50 |
| ST. JOSEPH HOSPITAL OF ORANGE | CA | 315 | 25.0% | 75d | 98.0% | 50 |
| ASCENSION SAINT THOMAS REHABILITATI | TN | 40 | 25.0% | 75d | 98.0% | 50 |
| QUINCY VALLEY MEDICAL CENTER | WA | 10 | 25.0% | 75d | 98.0% | 50 |
| LTAC OF LOUISIANA LLC | LA | 18 | 25.0% | 75d | 98.0% | 50 |
| BROOKHAVEN MEADOWBROOK HOSPITAL | OK | 0 | 25.0% | 75d | 98.0% | 50 |
| ENCOMPASS HEALTH REHABILITATION HOS | TX | 84 | 25.0% | 75d | 98.0% | 50 |
| CENTRAL LA. STATE HOSPITAL | LA | 148 | 25.0% | 75d | 98.0% | 50 |
| BAKERSFIELD REHABILITATION HOSPITAL | CA | 50 | 25.0% | 75d | 98.0% | 50 |
| KINDRED HOSPITAL SOUTH FLORIDA | FL | 197 | 25.0% | 75d | 98.0% | 50 |
| OCEANS BEHAVIORAL HOSPITAL OF HAMMO | LA | 52 | 25.0% | 75d | 98.0% | 50 |
| SUMMITRIDGE HOSPITAL | GA | 96 | 25.0% | 75d | 98.0% | 50 |
| THE PHYSICIAN CENTRE | TX | 16 | 25.0% | 75d | 98.0% | 50 |
| REHABILIATION HOSPITAL OF NAPLES | FL | 50 | 25.0% | 75d | 98.0% | 50 |
| MADONNA REHABILITATION LTC HOSPITAL | NE | 77 | 25.0% | 75d | 98.0% | 50 |
| SSH - JOHNSTOWN INC. | PA | 39 | 25.0% | 75d | 98.0% | 50 |
| BEHAVIORAL HEALTH CENTERS | TN | 16 | 25.0% | 75d | 98.0% | 50 |
| SSH WILLINGBORO | NJ | 69 | 25.0% | 75d | 98.0% | 50 |
Proprietary Models
Hospital Clustering
K-means on 7 standardized features (beds, revenue, margin, Medicare %, Medicaid %, occupancy, revenue/bed). Clusters labeled by centroid characteristics. Pure numpy — no sklearn dependency.
Distress Predictor
L2-regularized logistic regression predicting P(margin < -5%). Trained on cross-sectional HCRIS data. Features: occupancy, Medicare %, Medicaid %, revenue/bed, net-to-gross ratio, beds. AUC validated on held-out data.
RCM Opportunity Scorer
Gap analysis across 6 RCM levers: denial reduction, AR acceleration, clean claim rate, net-to-gross improvement, payer mix optimization, occupancy. Each lever benchmarked against P75 peers with 60% gap closure assumption and confidence weighting.
Conformal Prediction
Distribution-free 90% prediction intervals via split conformal inference. Guarantees finite-sample coverage — every point estimate comes with a calibrated uncertainty band, not just a standard error.