ML Analysis — LAGUNA HONDA HOSPITAL
CCN 050668 | 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 Health1/25
RCM Upside23/25
Market Position6/20
Demand Defensibility5/15
Operational Efficiency10/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-100.0%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-128.3%, -71.7%]. P0 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 56902638.833 | -6.8057 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 36598599.167 | +4.8883 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 19903621.739 | +0.6313 | Higher Bed Utilization Value increases predicted m | |
| Log(Beds) | 1.792 | -0.0600 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.098 | +0.0298 | Higher Reimbursement Quality increases predicted m |
Turnaround: 0%Low turnaround probability (0%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Under-Performing / Distre
Archetype
13.7%
Distress Risk
$9.6M
RCM Opportunity
D
Opportunity Grade
-45.6%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P17. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PARKLAND HLTH CTR - BONNE TERRE | MO | 3 |
| WENATCHEE VALLEY HOSPITAL | WA | 11 |
| MERCY WALWORTH HOSPITAL | WI | 25 |
| FRED HUTCHINSON CANCER CENTER | WA | 20 |
| DANA-FARBER CANCER INSTITUTE | MA | 30 |
Distress Analysis
Risk: Moderate
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 36598599.167 | -2.067 | ▼ risk |
| Medicaid Day Pct | 0.230 | +0.141 | ▲ risk |
| Net To Gross Ratio | 0.595 | +0.101 | ▲ risk |
| Medicare Day Pct | 0.605 | +0.048 | ▲ risk |
| Beds | 6.000 | -0.019 | ▼ risk |
| Occupancy Rate | 0.544 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $9.6M
Current margin: -50.0%
Projected margin: -45.6%
Grade: D
Comps: 114
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.165 | 0.598 | 43.3% | $6.5M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.595 | 0.715 | 11.9% | $3.1M | 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 | 38.9 | [25.0, 75.0] | P82 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 98.0% | [90.0%, 99.5%] | P1 | Strong — predicted net collection rate is in the top third. |