ML Analysis — HEART HOSPITAL OF BAKERSFIELD
CCN 050724 | 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.
46
/ 100 (C)
Financial Health6/25
RCM Upside20/25
Market Position9/20
Demand Defensibility9/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-6.9%
R²=0.34 | n=4,907 | Grade B | Actual: -14.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.2%, 21.4%]. P44 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Reimbursement Quality | 0.098 | +0.0297 | Higher Reimbursement Quality increases predicted m | |
| Revenue/Bed | 1383045.894 | -0.0274 | Lower Revenue/Bed decreases predicted margin | |
| Net-to-Gross | 0.190 | -0.0201 | Lower Net-to-Gross decreases predicted margin | |
| Bed Count | 47.000 | +0.0159 | Higher Bed Count increases predicted margin | |
| Log(Beds) | 3.850 | -0.0122 | Lower Log(Beds) decreases predicted margin |
Turnaround: 38%Turnaround possible (38%) but uncertain. Margin improvement depends on Reimbursement Quality.
Suburban Community Hospit
Archetype
45.3%
Distress Risk
$5.6M
RCM Opportunity
C
Opportunity Grade
-5.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P50. 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: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.190 | -0.080 | ▼ risk |
| Medicaid Day Pct | 0.027 | -0.062 | ▼ risk |
| Occupancy Rate | 0.567 | -0.039 | ▼ risk |
| Medicare Day Pct | 0.455 | +0.022 | ▲ risk |
| Beds | 47.000 | -0.014 | ▼ risk |
| Revenue Per Bed | 1383045.894 | +0.012 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.6M
Current margin: -14.1%
Projected margin: -5.6%
Grade: C
Comps: 100
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 | 0.518 | 0.683 | 16.5% | $2.5M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.190 | 0.468 | 27.8% | $2.1M | 65% | 18mo |
| Occupancy Improvement | 0.567 | 0.715 | 14.8% | $976K | 55% | 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 | 31.1 | [25.0, 75.0] | P65 | 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. |