ML Analysis — KERN VALLEY HEALTHCARE DISTRICT
CCN 051314 | 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.
34
/ 100 (D)
Financial Health5/25
RCM Upside19/25
Market Position2/20
Demand Defensibility6/15
Operational Efficiency2/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-13.2%
R²=0.34 | n=4,907 | Grade B | Actual: -17.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-41.5%, 15.1%]. P31 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1221999.875 | -0.0499 | Lower Revenue/Bed decreases predicted margin | |
| Log(Beds) | 3.178 | -0.0278 | Lower Log(Beds) decreases predicted margin | |
| Expense/Bed | 1432147.833 | +0.0277 | Higher Expense/Bed increases predicted margin | |
| Bed Utilization Value | 243702.486 | -0.0209 | Lower Bed Utilization Value decreases predicted ma | |
| Bed Count | 24.000 | +0.0195 | Higher Bed Count increases predicted margin |
Turnaround: 28%Low turnaround probability (28%). Structural disadvantages in Revenue/Bed and Log(Beds).
nan%
Distress Risk
$5.1M
RCM Opportunity
A
Opportunity Grade
0.3%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.199 | +0.302 | ▲ risk |
| Medicare Day Pct | 0.373 | +0.008 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.248 | -0.054 | ▼ risk |
| Revenue Per Bed | 1221999.875 | +0.021 | ▲ risk |
| Beds | 24.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.1M
Current margin: -17.2%
Projected margin: 0.3%
Grade: A
Comps: 63
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.199 | 0.709 | 51.0% | $3.4M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.248 | 0.619 | 37.1% | $1.3M | 65% | 18mo |
| Payer Mix Optimization | 0.627 | 0.661 | 3.4% | $504K | 50% | 24mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |