ML Analysis — KFH - FONTANA
CCN 050140 | 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.
58
/ 100 (C)
Financial Health19/25
RCM Upside10/25
Market Position9/20
Demand Defensibility10/15
Operational Efficiency9/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-5.5%
R²=0.34 | n=4,907 | Grade B | Actual: 6.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.8%, 22.8%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2242044.231 | +0.0925 | Higher Revenue/Bed increases predicted margin | |
| Bed Count | 654.000 | -0.0788 | Higher Bed Count decreases predicted margin | |
| Expense/Bed | 2095535.553 | -0.0540 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 6.483 | +0.0490 | Higher Log(Beds) increases predicted margin | |
| Reimbursement Quality | 0.264 | -0.0181 | Higher Reimbursement Quality decreases predicted m |
Large Academic Medical Ce
Archetype
47.3%
Distress Risk
$1.5M
RCM Opportunity
D
Opportunity Grade
6.6%
Projected Margin
Cluster: Large Academic Medical Center
Percentile within cluster: P44. Large medical centers trade at premium multiples (12-14x). Limited PE value creation but strong cash flow.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| NORTH CAROLINA BAPTIST HOSPITAL | NC | 800 |
| HACKENSACK UNIVERSITY MEDICAL CENTER | NJ | 779 |
| TEMPLE UNIVERSITY HOSPITAL | PA | 761 |
| VCU HEALTH SYSTEM MCV HOSPITAL | VA | 842 |
| UH CLEVELAND MEDICAL CENTER | OH | 660 |
| FROEDTERT MEM. LUTHERAN HOSPT. | WI | 731 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Beds | 654.000 | +0.068 | ▲ risk |
| Occupancy Rate | 0.587 | -0.057 | ▼ risk |
| Medicare Day Pct | 0.035 | -0.050 | ▼ risk |
| Revenue Per Bed | 2242044.231 | -0.039 | ▼ risk |
| Net To Gross Ratio | 0.311 | -0.026 | ▼ risk |
| Medicaid Day Pct | 0.114 | +0.025 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.5M
Current margin: 6.5%
Projected margin: 6.6%
Grade: D
Comps: 67
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.587 | 0.817 | 23.0% | $1.5M | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |