ML Analysis — ALISO RIDGE BEHAVIORAL HEALTH
CCN 054158 | 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.
42
/ 100 (D)
Financial Health3/25
RCM Upside19/25
Market Position9/20
Demand Defensibility7/15
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
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-15.1%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-43.4%, 13.2%]. P28 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 81477.067 | -0.2091 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 154042.908 | +0.1852 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.369 | -0.0481 | Higher Reimbursement Quality decreases predicted m | |
| Bed Utilization Value | 36526.948 | -0.0278 | Lower Bed Utilization Value decreases predicted ma | |
| Medicaid % | 0.250 | -0.0194 | Higher Medicaid % decreases predicted margin |
Turnaround: 26%Low turnaround probability (26%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Under-Performing / Distre
Archetype
57.5%
Distress Risk
$2.0M
RCM Opportunity
A
Opportunity Grade
-29.3%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P93. 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 |
|---|---|---|---|
| Medicaid Day Pct | 0.250 | +0.161 | ▲ risk |
| Revenue Per Bed | 81477.067 | +0.088 | ▲ risk |
| Occupancy Rate | 0.448 | +0.071 | ▲ risk |
| Net To Gross Ratio | 0.510 | +0.063 | ▲ risk |
| Medicare Day Pct | 0.028 | -0.051 | ▼ risk |
| Beds | 119.000 | -0.004 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.0M
Current margin: -50.0%
Projected margin: -29.3%
Grade: A
Comps: 188
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.448 | 0.722 | 27.3% | $1.8M | 55% | 24mo |
| Payer Mix Optimization | 0.723 | 0.736 | 1.3% | $200K | 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 | 31.8 | [25.0, 75.0] | P69 | 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. |