ML Analysis — KINDRED HOSPITAL LA MIRADA
CCN 052038 | 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 Health9/25
RCM Upside19/25
Market Position9/20
Demand Defensibility11/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-5.2%
R²=0.34 | n=4,907 | Grade B | Actual: -4.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.5%, 23.1%]. P49 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 534500.554 | -0.1458 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 559432.150 | +0.1352 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.083 | +0.0340 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.178 | -0.0214 | Lower Net-to-Gross decreases predicted margin | |
| Log(Beds) | 5.263 | +0.0206 | Higher Log(Beds) increases predicted margin |
Turnaround: 41%Turnaround possible (41%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
43.4%
Distress Risk
$5.6M
RCM Opportunity
D
Opportunity Grade
0.8%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P78. 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 |
|---|---|---|---|
| Occupancy Rate | 0.708 | -0.170 | ▼ risk |
| Medicaid Day Pct | 0.004 | -0.085 | ▼ risk |
| Net To Gross Ratio | 0.178 | -0.085 | ▼ risk |
| Revenue Per Bed | 534500.554 | +0.062 | ▲ risk |
| Medicare Day Pct | 0.529 | +0.035 | ▲ risk |
| Beds | 193.000 | +0.006 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.6M
Current margin: -4.7%
Projected margin: 0.8%
Grade: D
Comps: 219
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 | 0.468 | 0.741 | 27.3% | $4.1M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.178 | 0.288 | 11.1% | $1.3M | 65% | 18mo |
| Occupancy Improvement | 0.708 | 0.735 | 2.7% | $176K | 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 | 25.8 | [25.0, 75.0] | P33 | 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. |