ML Analysis — ALAMEDA HEALTH SYSTEM
CCN 050320 | 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.
45
/ 100 (C)
Financial Health3/25
RCM Upside20/25
Market Position9/20
Demand Defensibility11/15
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)
-53.0%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-81.3%, -24.7%]. P0 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 5342201.487 | -0.4540 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 1283576.517 | -0.0413 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.064 | +0.0395 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.097 | -0.0305 | Lower Net-to-Gross decreases predicted margin | |
| Log(Beds) | 5.447 | +0.0249 | Higher Log(Beds) increases predicted margin |
Turnaround: 2%Low turnaround probability (2%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Under-Performing / Distre
Archetype
41.3%
Distress Risk
$8.1M
RCM Opportunity
D
Opportunity Grade
-47.3%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P94. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.805 | -0.259 | ▼ risk |
| Net To Gross Ratio | 0.097 | -0.121 | ▼ risk |
| Medicaid Day Pct | 0.140 | +0.051 | ▲ risk |
| Medicare Day Pct | 0.198 | -0.022 | ▼ risk |
| Revenue Per Bed | 1283576.517 | +0.017 | ▲ risk |
| Beds | 232.000 | +0.011 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.1M
Current margin: -50.0%
Projected margin: -47.3%
Grade: D
Comps: 198
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 | 0.097 | 0.292 | 19.5% | $6.8M | 65% | 18mo |
| Payer Mix Optimization | 0.661 | 0.751 | 9.0% | $1.3M | 50% | 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 | 32.7 | [25.0, 75.0] | P73 | 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 | 99.2% | [90.0%, 99.5%] | P5 | Strong — predicted net collection rate is in the top third. |