ML Analysis — SELLS HOSPITAL
CCN 030074 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Pass — risk/return profile does not justify PE capital deployment at market multiples.
17
/ 100 (F)
Financial Health0/25
RCM Upside5/25
Market Position9/20
Demand Defensibility3/15
Operational Efficiency0/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-100.0%
R²=0.34 | n=4,907 | Grade B
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-128.3%, -71.7%]. P0 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 7109877.500 | -0.6717 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 0.000 | -0.2205 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.000 | +0.0580 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.000 | -0.0413 | Lower Net-to-Gross decreases predicted margin | |
| Log(Beds) | 2.639 | -0.0403 | Lower Log(Beds) decreases predicted margin |
nan%
Distress Risk
$5.7M
RCM Opportunity
D
Opportunity Grade
nan%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
AZ distress rate: 35.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.048 | +0.443 | ▲ risk |
| Medicaid Day Pct | 0.329 | +0.240 | ▲ risk |
| Beds | 14.000 | -0.018 | ▼ risk |
| Medicare Day Pct | 0.222 | -0.018 | ▼ risk |
| Revenue Per Bed | nan | +nan | ▼ risk |
| Net To Gross Ratio | nan | +nan | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.7M
Current margin: nan%
Projected margin: nan%
Grade: D
Comps: 27
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.048 | 0.500 | 45.3% | $3.0M | 55% | 24mo |
| Payer Mix Optimization | 0.449 | 0.631 | 18.2% | $2.7M | 50% | 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 | 35.3 | [25.0, 75.0] | P79 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.0% | [90.0%, 99.5%] | P4 | Strong — predicted net collection rate is in the top third. |