ML Analysis — PIH HEALTH HOSPITAL - DOWNEY
CCN 050393 | 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.
46
/ 100 (C)
Financial Health10/25
RCM Upside17/25
Market Position9/20
Demand Defensibility8/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-5.6%
R²=0.34 | n=4,907 | Grade B | Actual: -0.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.9%, 22.7%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1154640.873 | +0.0619 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 1146775.109 | -0.0604 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.111 | +0.0260 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.155 | -0.0240 | Lower Net-to-Gross decreases predicted margin | |
| Log(Beds) | 5.106 | +0.0170 | Higher Log(Beds) increases predicted margin |
Turnaround: 40%Turnaround possible (40%) but uncertain. Margin improvement depends on Expense/Bed.
Suburban Community Hospit
Archetype
46.5%
Distress Risk
$4.5M
RCM Opportunity
D
Opportunity Grade
1.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P25. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.155 | -0.095 | ▼ risk |
| Occupancy Rate | 0.557 | -0.030 | ▼ risk |
| Revenue Per Bed | 1146775.109 | +0.026 | ▲ risk |
| Medicare Day Pct | 0.184 | -0.025 | ▼ risk |
| Medicaid Day Pct | 0.098 | +0.009 | ▲ risk |
| Beds | 165.000 | +0.002 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.5M
Current margin: -0.7%
Projected margin: 1.7%
Grade: D
Comps: 207
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 | 0.155 | 0.291 | 13.7% | $3.0M | 65% | 18mo |
| Occupancy Improvement | 0.557 | 0.726 | 16.8% | $1.1M | 55% | 24mo |
| Payer Mix Optimization | 0.718 | 0.739 | 2.1% | $317K | 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 | 26.2 | [25.0, 75.0] | P36 | 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. |