ML Analysis — REDWOOD MEMORIAL HOSPITAL
CCN 051318 | 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.
41
/ 100 (D)
Financial Health5/25
RCM Upside20/25
Market Position6/20
Demand Defensibility5/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-4.7%
R²=0.34 | n=4,907 | Grade B | Actual: -12.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.0%, 23.6%]. P50 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2817244.950 | -0.1429 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 2494746.600 | +0.1278 | Higher Revenue/Bed increases predicted margin | |
| Reimbursement Quality | 0.086 | +0.0333 | Higher Reimbursement Quality increases predicted m | |
| Log(Beds) | 2.996 | -0.0320 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 1509150.820 | +0.0211 | Higher Bed Utilization Value increases predicted m |
Turnaround: 42%Turnaround possible (42%) but uncertain. Margin improvement depends on improving Expense/Bed.
nan%
Distress Risk
$7.2M
RCM Opportunity
A
Opportunity Grade
1.6%
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 | 0.605 | -0.074 | ▼ risk |
| Medicare Day Pct | 0.620 | +0.050 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.225 | -0.064 | ▼ risk |
| Revenue Per Bed | 2494746.600 | -0.054 | ▼ risk |
| Beds | 20.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $7.2M
Current margin: -12.9%
Projected margin: 1.6%
Grade: A
Comps: 61
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 | 0.380 | 0.657 | 27.6% | $4.1M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.225 | 0.642 | 41.7% | $2.4M | 65% | 18mo |
| Occupancy Improvement | 0.605 | 0.703 | 9.8% | $646K | 55% | 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. |