ML Analysis — KAU HOSPITAL
CCN 121301 | 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.
43
/ 100 (D)
Financial Health4/25
RCM Upside21/25
Market Position6/20
Demand Defensibility6/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-17.4%
R²=0.34 | n=4,907 | Grade B | Actual: -35.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-45.7%, 10.9%]. P24 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Medicaid % | 0.780 | -0.0836 | Higher Medicaid % decreases predicted margin | |
| State Peer Margin | -0.147 | -0.0753 | Lower State Peer Margin decreases predicted margin | |
| Expense/Bed | 2193378.286 | -0.0661 | Higher Expense/Bed decreases predicted margin | |
| Net-to-Gross | 0.779 | +0.0461 | Higher Net-to-Gross increases predicted margin | |
| Occupancy × Net-to-Gross | 0.654 | +0.0349 | Higher Occupancy × Net-to-Gross increases predicte |
Turnaround: 23%Low turnaround probability (23%). Structural disadvantages in Medicaid % and State Peer Margin.
Safety-Net/Medicaid Heavy
Archetype
62.0%
Distress Risk
$6.9M
RCM Opportunity
A
Opportunity Grade
-15.2%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P94. 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%
HI distress rate: 68.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.780 | +0.691 | ▲ risk |
| Occupancy Rate | 0.840 | -0.292 | ▼ risk |
| Net To Gross Ratio | 0.780 | +0.183 | ▲ risk |
| Medicare Day Pct | 0.058 | -0.046 | ▼ risk |
| Beds | 21.000 | -0.017 | ▼ risk |
| Revenue Per Bed | 1618079.905 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.9M
Current margin: -35.5%
Projected margin: -15.2%
Grade: A
Comps: 2243
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 | 0.162 | 0.624 | 46.2% | $6.9M | 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 | 32.4 | [25.0, 75.0] | P71 | 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 | 99.4% | [90.0%, 99.5%] | P6 | Strong — predicted net collection rate is in the top third. |