ML Analysis — MARTIN LUTHER KING COMMUNITY HOSP
CCN 050779 | 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.
45
/ 100 (D)
Financial Health6/25
RCM Upside21/25
Market Position9/20
Demand Defensibility9/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-24.9%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-53.2%, 3.4%]. P16 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2701674.750 | -0.1287 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 936709.572 | -0.0897 | Lower Revenue/Bed decreases predicted margin | |
| Reimbursement Quality | 0.027 | +0.0501 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.039 | -0.0370 | Lower Net-to-Gross decreases predicted margin | |
| Occupancy | 0.925 | +0.0227 | Higher Occupancy increases predicted margin |
Turnaround: 15%Low turnaround probability (15%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Under-Performing / Distre
Archetype
38.6%
Distress Risk
$4.9M
RCM Opportunity
D
Opportunity Grade
-46.6%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P97. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.925 | -0.371 | ▼ risk |
| Net To Gross Ratio | 0.039 | -0.147 | ▼ risk |
| Medicaid Day Pct | 0.165 | +0.076 | ▲ risk |
| Revenue Per Bed | 936709.572 | +0.038 | ▲ risk |
| Medicare Day Pct | 0.128 | -0.034 | ▼ risk |
| Beds | 152.000 | +0.000 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.9M
Current margin: -50.0%
Projected margin: -46.6%
Grade: D
Comps: 197
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 | 0.039 | 0.290 | 25.1% | $4.2M | 65% | 18mo |
| Payer Mix Optimization | 0.707 | 0.754 | 4.7% | $706K | 50% | 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 | 34.0 | [25.0, 75.0] | P77 | 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 | 98.8% | [90.0%, 99.5%] | P3 | Strong — predicted net collection rate is in the top third. |