ML Analysis — AURORA SANTA ROSA BEHAVIORAL HEALTH
CCN 054151 | 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.
50
/ 100 (C)
Financial Health5/25
RCM Upside19/25
Market Position13/20
Demand Defensibility8/15
Operational Efficiency4/15
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)
-11.4%
R²=0.34 | n=4,907 | Grade B | Actual: -15.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.7%, 16.9%]. P34 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 346849.327 | -0.1720 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 399872.487 | +0.1549 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.412 | -0.0607 | Higher Reimbursement Quality decreases predicted m | |
| Net-to-Gross | 0.609 | +0.0270 | Higher Net-to-Gross increases predicted margin | |
| Bed Utilization Value | 213945.781 | -0.0219 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 31%Turnaround possible (31%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Under-Performing / Distre
Archetype
53.3%
Distress Risk
$1.6M
RCM Opportunity
D
Opportunity Grade
-11.3%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P76. 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: High
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.609 | +0.107 | ▲ risk |
| Medicaid Day Pct | 0.191 | +0.102 | ▲ risk |
| Occupancy Rate | 0.617 | -0.085 | ▼ risk |
| Revenue Per Bed | 346849.327 | +0.073 | ▲ risk |
| Medicare Day Pct | 0.132 | -0.034 | ▼ risk |
| Beds | 113.000 | -0.005 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.6M
Current margin: -15.3%
Projected margin: -11.3%
Grade: D
Comps: 181
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 | 0.677 | 0.735 | 5.8% | $868K | 50% | 24mo |
| Occupancy Improvement | 0.617 | 0.724 | 10.7% | $705K | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |