ML Analysis — FAIRBANKS MEMORIAL
CCN 020012 | 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.
58
/ 100 (C)
Financial Health9/25
RCM Upside18/25
Market Position14/20
Demand Defensibility9/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-3.2%
R²=0.34 | n=4,907 | Grade B | Actual: -3.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-31.5%, 25.1%]. P54 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2365383.369 | +0.1097 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2446746.361 | -0.0973 | Higher Expense/Bed decreases predicted margin | |
| Medicaid % | 0.313 | -0.0272 | Higher Medicaid % decreases predicted margin | |
| State Peer Margin | -0.021 | +0.0181 | Higher State Peer Margin increases predicted margi | |
| Log(Beds) | 4.804 | +0.0100 | Higher Log(Beds) increases predicted margin |
Turnaround: 44%Turnaround possible (44%) but uncertain. Margin improvement depends on Revenue/Bed.
Safety-Net/Medicaid Heavy
Archetype
55.9%
Distress Risk
$7.4M
RCM Opportunity
D
Opportunity Grade
-0.9%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P26. High Medicaid dependence creates reimbursement risk. Assess DSH payments and state expansion status.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| WESTERN PEAKS SPECIALTY HOSPITAL | UT | 59 |
| HOSPITAL MENONITA AIBONITO | PR | 129 |
| TOPPENISH COMMUNITY HOSPITAL | WA | 47 |
| MINERAL COMMUNITY HOSPITAL | MT | 25 |
| BANNER UNIVERSITY MED CENTER SOUTH | AZ | 132 |
| NORTH COLORADO MEDICAL CENTER | CO | 202 |
Distress Analysis
Risk: High
National distress rate: 49.3%
AK distress rate: 38.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.313 | +0.224 | ▲ risk |
| Occupancy Rate | 0.460 | +0.060 | ▲ risk |
| Revenue Per Bed | 2365383.369 | -0.046 | ▼ risk |
| Net To Gross Ratio | 0.445 | +0.034 | ▲ risk |
| Medicare Day Pct | 0.300 | -0.005 | ▼ risk |
| Beds | 122.000 | -0.004 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $7.4M
Current margin: -3.4%
Projected margin: -0.9%
Grade: D
Comps: 2077
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 | 0.387 | 0.756 | 36.9% | $5.5M | 50% | 24mo |
| Occupancy Improvement | 0.460 | 0.750 | 28.9% | $1.9M | 55% | 24mo |
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 | 26.4 | [25.0, 75.0] | P36 | 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. |