ML Analysis — KFH - MORENO VALLEY
CCN 050765 | 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.
48
/ 100 (C)
Financial Health10/25
RCM Upside17/25
Market Position9/20
Demand Defensibility7/15
Operational Efficiency6/15
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)
-3.9%
R²=0.34 | n=4,907 | Grade B | Actual: -0.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-32.1%, 24.4%]. P52 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2132932.692 | +0.0773 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2142826.106 | -0.0598 | Higher Expense/Bed decreases predicted margin | |
| Commercial % | 0.884 | +0.0122 | Higher Commercial % increases predicted margin | |
| Net-to-Gross | 0.260 | -0.0122 | Lower Net-to-Gross decreases predicted margin | |
| Bed Count | 94.000 | +0.0085 | Higher Bed Count increases predicted margin |
Turnaround: 43%Turnaround possible (43%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
45.9%
Distress Risk
$3.7M
RCM Opportunity
D
Opportunity Grade
1.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P68. 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 |
|---|---|---|---|
| Medicare Day Pct | 0.038 | -0.050 | ▼ risk |
| Net To Gross Ratio | 0.260 | -0.048 | ▼ risk |
| Revenue Per Bed | 2132932.691 | -0.033 | ▼ risk |
| Occupancy Rate | 0.512 | +0.012 | ▲ risk |
| Medicaid Day Pct | 0.078 | -0.011 | ▼ risk |
| Beds | 94.000 | -0.007 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.7M
Current margin: -0.5%
Projected margin: 1.4%
Grade: D
Comps: 173
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 | 0.260 | 0.355 | 9.5% | $2.2M | 65% | 18mo |
| Occupancy Improvement | 0.512 | 0.734 | 22.1% | $1.5M | 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 | 27.1 | [25.0, 75.0] | P39 | 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. |