ML Analysis — HUNTINGTON BEACH HOSPITAL
CCN 050526 | 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.
43
/ 100 (D)
Financial Health5/25
RCM Upside17/25
Market Position9/20
Demand Defensibility9/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-9.7%
R²=0.34 | n=4,907 | Grade B | Actual: -2.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-38.0%, 18.6%]. P38 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 762956.098 | -0.1140 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 781602.171 | +0.1079 | Higher Expense/Bed increases predicted margin | |
| Bed Utilization Value | 253384.016 | -0.0206 | Lower Bed Utilization Value decreases predicted ma | |
| Reimbursement Quality | 0.161 | +0.0115 | Higher Reimbursement Quality increases predicted m | |
| Occupancy | 0.332 | -0.0110 | Lower Occupancy decreases predicted margin |
Turnaround: 34%Turnaround possible (34%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
53.9%
Distress Risk
$5.5M
RCM Opportunity
C
Opportunity Grade
6.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P30. 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 | 0.332 | +0.179 | ▲ risk |
| Revenue Per Bed | 762956.098 | +0.048 | ▲ risk |
| Net To Gross Ratio | 0.283 | -0.038 | ▼ risk |
| Beds | 82.000 | -0.009 | ▼ risk |
| Medicare Day Pct | 0.342 | +0.002 | ▲ risk |
| Medicaid Day Pct | 0.089 | +0.000 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.5M
Current margin: -2.4%
Projected margin: 6.4%
Grade: C
Comps: 153
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.332 | 0.715 | 38.3% | $2.5M | 55% | 24mo |
| Payer Mix Optimization | 0.569 | 0.727 | 15.8% | $2.4M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.283 | 0.369 | 8.5% | $623K | 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 | 28.6 | [25.0, 75.0] | P47 | 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. |