ML Analysis — VERDE VALLEY MEDICAL CENTER
CCN 030007 | 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.
56
/ 100 (C)
Financial Health14/25
RCM Upside13/25
Market Position13/20
Demand Defensibility11/15
Operational Efficiency5/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-0.5%
R²=0.34 | n=4,907 | Grade B | Actual: 4.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-28.8%, 27.8%]. P61 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1982638.241 | +0.0563 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 1896908.965 | -0.0295 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.008 | +0.0279 | Higher State Peer Margin increases predicted margi | |
| Reimbursement Quality | 0.123 | +0.0224 | Higher Reimbursement Quality increases predicted m | |
| Medicaid % | 0.197 | -0.0130 | Higher Medicaid % decreases predicted margin |
Suburban Community Hospit
Archetype
50.6%
Distress Risk
$10.5M
RCM Opportunity
C
Opportunity Grade
10.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P45. 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: High
National distress rate: 49.3%
AZ distress rate: 35.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.196 | +0.107 | ▲ risk |
| Net To Gross Ratio | 0.261 | -0.048 | ▼ risk |
| Revenue Per Bed | 1982638.241 | -0.024 | ▼ risk |
| Occupancy Rate | 0.501 | +0.022 | ▲ risk |
| Beds | 87.000 | -0.008 | ▼ risk |
| Medicare Day Pct | 0.330 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $10.5M
Current margin: 4.3%
Projected margin: 10.4%
Grade: C
Comps: 56
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 | 0.473 | 0.771 | 29.8% | $4.5M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.261 | 0.479 | 21.8% | $4.4M | 65% | 18mo |
| Occupancy Improvement | 0.501 | 0.744 | 24.3% | $1.6M | 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 | 27.1 | [25.0, 75.0] | P39 | 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. |