ML Analysis — REDLANDS COMMUNITY HOSPITAL
CCN 050272 | 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.
37
/ 100 (D)
Financial Health7/25
RCM Upside20/25
Market Position2/20
Demand Defensibility8/15
Operational Efficiency0/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
Margin Prediction (Trained Ridge Model)
-7.5%
R²=0.34 | n=4,907 | Grade B | Actual: -31.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.8%, 20.8%]. P43 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 983692.472 | -0.0831 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1289357.456 | +0.0453 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.077 | +0.0358 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.088 | -0.0314 | Lower Net-to-Gross decreases predicted margin | |
| Log(Beds) | 5.273 | +0.0209 | Higher Log(Beds) increases predicted margin |
Turnaround: 37%Turnaround possible (37%) but uncertain. Margin improvement depends on improving Revenue/Bed.
nan%
Distress Risk
$5.3M
RCM Opportunity
D
Opportunity Grade
-28.3%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.608 | -0.077 | ▼ risk |
| Medicare Day Pct | 0.127 | -0.034 | ▼ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.088 | -0.125 | ▼ risk |
| Revenue Per Bed | 983692.472 | +0.035 | ▲ risk |
| Beds | 195.000 | +0.006 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.3M
Current margin: -31.1%
Projected margin: -28.3%
Grade: D
Comps: 219
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 | 0.088 | 0.287 | 19.8% | $4.4M | 65% | 18mo |
| Occupancy Improvement | 0.608 | 0.732 | 12.4% | $820K | 55% | 24mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |