ML Analysis — ADVENTIST HEALTH SIMI VALLEY
CCN 050236 | 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.
54
/ 100 (C)
Financial Health9/25
RCM Upside20/25
Market Position11/20
Demand Defensibility12/15
Operational Efficiency2/15
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)
-4.9%
R²=0.34 | n=4,907 | Grade B | Actual: -10.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.2%, 23.4%]. P50 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1366269.750 | -0.0297 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.105 | +0.0276 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.182 | -0.0209 | Lower Net-to-Gross decreases predicted margin | |
| Expense/Bed | 1510234.812 | +0.0181 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 4.970 | +0.0138 | Higher Log(Beds) increases predicted margin |
Turnaround: 41%Turnaround possible (41%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
44.3%
Distress Risk
$5.7M
RCM Opportunity
D
Opportunity Grade
-7.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P37. 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: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.619 | -0.087 | ▼ risk |
| Net To Gross Ratio | 0.182 | -0.083 | ▼ risk |
| Medicaid Day Pct | 0.035 | -0.053 | ▼ risk |
| Revenue Per Bed | 1366269.750 | +0.013 | ▲ risk |
| Medicare Day Pct | 0.385 | +0.010 | ▲ risk |
| Beds | 144.000 | -0.001 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.7M
Current margin: -10.5%
Projected margin: -7.6%
Grade: D
Comps: 200
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 | 0.182 | 0.292 | 11.1% | $2.5M | 65% | 18mo |
| Payer Mix Optimization | 0.580 | 0.745 | 16.5% | $2.5M | 50% | 24mo |
| Occupancy Improvement | 0.619 | 0.722 | 10.3% | $683K | 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 | 27.1 | [25.0, 75.0] | P39 | 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. |