ML Analysis — KFH - BALDWIN PARK
CCN 050723 | 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.
56
/ 100 (C)
Financial Health20/25
RCM Upside7/25
Market Position9/20
Demand Defensibility9/15
Operational Efficiency11/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-2.1%
R²=0.34 | n=4,907 | Grade B | Actual: 11.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-30.3%, 26.2%]. P57 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2187991.162 | +0.0850 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 1942420.198 | -0.0351 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 5.606 | +0.0286 | Higher Log(Beds) increases predicted margin | |
| Bed Count | 272.000 | -0.0192 | Higher Bed Count decreases predicted margin | |
| Reimbursement Quality | 0.251 | -0.0141 | Higher Reimbursement Quality decreases predicted m |
Suburban Community Hospit
Archetype
48.1%
Distress Risk
$2.6M
RCM Opportunity
D
Opportunity Grade
11.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P73. 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 |
|---|---|---|---|
| Occupancy Rate | 0.443 | +0.077 | ▲ risk |
| Medicare Day Pct | 0.034 | -0.050 | ▼ risk |
| Net To Gross Ratio | 0.280 | -0.039 | ▼ risk |
| Revenue Per Bed | 2187991.162 | -0.036 | ▼ risk |
| Beds | 272.000 | +0.017 | ▲ risk |
| Medicaid Day Pct | 0.073 | -0.016 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.6M
Current margin: 11.2%
Projected margin: 11.7%
Grade: D
Comps: 187
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.443 | 0.759 | 31.7% | $2.1M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.280 | 0.288 | 0.8% | $541K | 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 | 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. |