ML Analysis — HONORHEALTH SONORAN CROSSING MED CTR
CCN 030146 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
42
/ 100 (D)
Financial Health5/25
RCM Upside19/25
Market Position9/20
Demand Defensibility8/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-6.3%
R²=0.34 | n=4,907 | Grade B | Actual: -6.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-34.6%, 22.0%]. P46 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1348733.443 | -0.0322 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.096 | +0.0305 | Higher Reimbursement Quality increases predicted m | |
| State Peer Margin | -0.008 | +0.0279 | Higher State Peer Margin increases predicted margi | |
| Expense/Bed | 1437837.743 | +0.0270 | Higher Expense/Bed increases predicted margin | |
| Net-to-Gross | 0.172 | -0.0220 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 39%Turnaround possible (39%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
52.3%
Distress Risk
$8.8M
RCM Opportunity
C
Opportunity Grade
2.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P67. 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 |
|---|---|---|---|
| Occupancy Rate | 0.407 | +0.110 | ▲ risk |
| Medicaid Day Pct | 0.197 | +0.108 | ▲ risk |
| Net To Gross Ratio | 0.172 | -0.087 | ▼ risk |
| Revenue Per Bed | 1348733.443 | +0.014 | ▲ risk |
| Medicare Day Pct | 0.249 | -0.013 | ▼ risk |
| Beds | 70.000 | -0.011 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.8M
Current margin: -6.6%
Projected margin: 2.7%
Grade: C
Comps: 51
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.172 | 0.545 | 37.2% | $4.1M | 65% | 18mo |
| Payer Mix Optimization | 0.554 | 0.718 | 16.4% | $2.5M | 50% | 24mo |
| Occupancy Improvement | 0.407 | 0.741 | 33.5% | $2.2M | 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 | 29.8 | [25.0, 75.0] | P57 | 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. |