ML Analysis — PALO VERDE HOSPITAL
CCN 050423 | 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.
44
/ 100 (D)
Financial Health15/25
RCM Upside5/25
Market Position9/20
Demand Defensibility4/15
Operational Efficiency11/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-12.1%
R²=0.34 | n=4,907 | Grade B | Actual: 16.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-40.4%, 16.2%]. P33 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1061514.526 | +0.0734 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 1275613.579 | -0.0424 | Lower Revenue/Bed decreases predicted margin | |
| Log(Beds) | 2.944 | -0.0332 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.292 | -0.0261 | Higher Reimbursement Quality decreases predicted m | |
| Bed Utilization Value | 176397.033 | -0.0231 | Lower Bed Utilization Value decreases predicted ma |
Suburban Community Hospit
Archetype
59.4%
Distress Risk
$4.2M
RCM Opportunity
A
Opportunity Grade
34.1%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P83. 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: High
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.138 | +0.359 | ▲ risk |
| Medicaid Day Pct | 0.125 | +0.036 | ▲ risk |
| Net To Gross Ratio | 0.439 | +0.032 | ▲ risk |
| Medicare Day Pct | 0.210 | -0.020 | ▼ risk |
| Revenue Per Bed | 1275613.579 | +0.018 | ▲ risk |
| Beds | 19.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.2M
Current margin: 16.8%
Projected margin: 34.1%
Grade: A
Comps: 59
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.138 | 0.686 | 54.8% | $3.6M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.439 | 0.643 | 20.3% | $577K | 65% | 18mo |
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 | 30.7 | [25.0, 75.0] | P63 | 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. |