ML Analysis — BANNER OCOTILLO MEDICAL CENTER
CCN 030147 | 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.
43
/ 100 (D)
Financial Health6/25
RCM Upside19/25
Market Position9/20
Demand Defensibility8/15
Operational Efficiency0/15
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)
-7.9%
R²=0.34 | n=4,907 | Grade B | Actual: -17.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-36.2%, 20.4%]. P42 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 937154.170 | -0.0896 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1105337.862 | +0.0680 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.008 | +0.0279 | Higher State Peer Margin increases predicted margi | |
| Reimbursement Quality | 0.116 | +0.0245 | Higher Reimbursement Quality increases predicted m | |
| Medicaid % | 0.246 | -0.0190 | Higher Medicaid % decreases predicted margin |
Turnaround: 36%Turnaround possible (36%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Safety-Net/Medicaid Heavy
Archetype
52.3%
Distress Risk
$7.5M
RCM Opportunity
C
Opportunity Grade
-9.4%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P29. 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%
AZ distress rate: 35.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.246 | +0.157 | ▲ risk |
| Net To Gross Ratio | 0.212 | -0.070 | ▼ risk |
| Revenue Per Bed | 937154.170 | +0.038 | ▲ risk |
| Occupancy Rate | 0.500 | +0.024 | ▲ risk |
| Medicare Day Pct | 0.205 | -0.021 | ▼ risk |
| Beds | 94.000 | -0.007 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $7.5M
Current margin: -17.9%
Projected margin: -9.4%
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 | 0.549 | 0.771 | 22.2% | $3.3M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.212 | 0.462 | 25.0% | $2.6M | 65% | 18mo |
| Occupancy Improvement | 0.500 | 0.744 | 24.4% | $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 | 29.1 | [25.0, 75.0] | P52 | 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. |