ML Analysis — BANNER UNIVERSITY MED CENTER SOUTH
CCN 030111 | 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.
50
/ 100 (C)
Financial Health8/25
RCM Upside20/25
Market Position8/20
Demand Defensibility9/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-5.9%
R²=0.34 | n=4,907 | Grade B | Actual: -16.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-34.2%, 22.4%]. P47 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Medicaid % | 0.441 | -0.0425 | Higher Medicaid % decreases predicted margin | |
| State Peer Margin | -0.008 | +0.0279 | Higher State Peer Margin increases predicted margi | |
| Reimbursement Quality | 0.108 | +0.0267 | Higher Reimbursement Quality increases predicted m | |
| Revenue/Bed | 1446422.023 | -0.0185 | Lower Revenue/Bed decreases predicted margin | |
| Net-to-Gross | 0.257 | -0.0126 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 40%Turnaround possible (40%) but uncertain. Margin improvement depends on improving Medicaid %.
Safety-Net/Medicaid Heavy
Archetype
51.2%
Distress Risk
$8.4M
RCM Opportunity
D
Opportunity Grade
-11.9%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P1. 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 |
| NORTH COLORADO MEDICAL CENTER | CO | 202 |
| NORTH SUBURBAN MEDICAL CENTER | CO | 115 |
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 | 0.441 | +0.351 | ▲ risk |
| Occupancy Rate | 0.741 | -0.201 | ▼ risk |
| Net To Gross Ratio | 0.257 | -0.050 | ▼ risk |
| Medicare Day Pct | 0.137 | -0.033 | ▼ risk |
| Revenue Per Bed | 1446422.023 | +0.008 | ▲ risk |
| Beds | 132.000 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.4M
Current margin: -16.3%
Projected margin: -11.9%
Grade: D
Comps: 47
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 | 0.423 | 0.789 | 36.6% | $5.5M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.257 | 0.377 | 12.0% | $2.7M | 65% | 18mo |
| Occupancy Improvement | 0.741 | 0.774 | 3.3% | $217K | 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 | 27.5 | [25.0, 75.0] | P40 | 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. |