ML Analysis — ADVENTIST HEALTH BAKERSFIELD
CCN 050455 | 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.
53
/ 100 (C)
Financial Health9/25
RCM Upside20/25
Market Position9/20
Demand Defensibility13/15
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)
-2.7%
R²=0.34 | n=4,907 | Grade B | Actual: -8.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-31.0%, 25.6%]. P55 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2017836.020 | -0.0444 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 1853191.858 | +0.0382 | Higher Revenue/Bed increases predicted margin | |
| Log(Beds) | 5.537 | +0.0270 | Higher Log(Beds) increases predicted margin | |
| Net-to-Gross | 0.173 | -0.0220 | Lower Net-to-Gross decreases predicted margin | |
| Reimbursement Quality | 0.128 | +0.0210 | Higher Reimbursement Quality increases predicted m |
Turnaround: 45%Turnaround possible (45%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
41.0%
Distress Risk
$6.4M
RCM Opportunity
D
Opportunity Grade
-7.5%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P0. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.726 | -0.186 | ▼ risk |
| Net To Gross Ratio | 0.173 | -0.087 | ▼ risk |
| Medicaid Day Pct | 0.049 | -0.040 | ▼ risk |
| Medicare Day Pct | 0.208 | -0.020 | ▼ risk |
| Revenue Per Bed | 1853191.858 | -0.016 | ▼ risk |
| Beds | 254.000 | +0.014 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.4M
Current margin: -8.9%
Projected margin: -7.5%
Grade: D
Comps: 190
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 | 0.173 | 0.285 | 11.2% | $6.1M | 65% | 18mo |
| Occupancy Improvement | 0.726 | 0.753 | 2.8% | $182K | 55% | 24mo |
| Payer Mix Optimization | 0.743 | 0.746 | 0.3% | $52K | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |