ML Analysis — CHCO - COLORADO SPRINGS
CCN 063303 | 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.
49
/ 100 (C)
Financial Health6/25
RCM Upside20/25
Market Position11/20
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)
-8.5%
R²=0.34 | n=4,907 | Grade B | Actual: -9.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-36.8%, 19.8%]. P41 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Medicaid % | 0.529 | -0.0533 | Higher Medicaid % decreases predicted margin | |
| Expense/Bed | 1938587.565 | -0.0347 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 1775592.669 | +0.0274 | Higher Revenue/Bed increases predicted margin | |
| Reimbursement Quality | 0.139 | +0.0179 | Higher Reimbursement Quality increases predicted m | |
| Log(Beds) | 4.820 | +0.0104 | Higher Log(Beds) increases predicted margin |
Turnaround: 35%Turnaround possible (35%) but uncertain. Margin improvement depends on improving Medicaid %.
Safety-Net/Medicaid Heavy
Archetype
55.4%
Distress Risk
$4.9M
RCM Opportunity
D
Opportunity Grade
-7.0%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P14. High Medicaid dependence creates reimbursement risk. Assess DSH payments and state expansion status.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| WESTERN PEAKS SPECIALTY HOSPITAL | UT | 59 |
| HOSPITAL MENONITA AIBONITO | PR | 129 |
| TOPPENISH COMMUNITY HOSPITAL | WA | 47 |
| MINERAL COMMUNITY HOSPITAL | MT | 25 |
| BANNER UNIVERSITY MED CENTER SOUTH | AZ | 132 |
| NORTH COLORADO MEDICAL CENTER | CO | 202 |
Distress Analysis
Risk: High
National distress rate: 49.3%
CO distress rate: 46.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.529 | +0.440 | ▲ risk |
| Occupancy Rate | 0.626 | -0.094 | ▼ risk |
| Medicare Day Pct | 0.000 | -0.056 | ▼ risk |
| Net To Gross Ratio | 0.296 | -0.032 | ▼ risk |
| Revenue Per Bed | 1775592.669 | -0.012 | ▼ risk |
| Beds | 124.000 | -0.003 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.9M
Current margin: -9.2%
Projected margin: -7.0%
Grade: D
Comps: 35
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 | 0.471 | 0.649 | 17.8% | $2.7M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.296 | 0.342 | 4.6% | $1.2M | 65% | 18mo |
| Occupancy Improvement | 0.626 | 0.776 | 15.0% | $989K | 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 | 27.4 | [25.0, 75.0] | P40 | 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. |