ML Analysis — KAHUKU MEDICAL CENTER
CCN 121304 | 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.
51
/ 100 (C)
Financial Health3/25
RCM Upside21/25
Market Position11/20
Demand Defensibility10/15
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:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-11.5%
R²=0.34 | n=4,907 | Grade B | Actual: -8.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.8%, 16.8%]. P34 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | -0.147 | -0.0753 | Lower State Peer Margin decreases predicted margin | |
| Revenue/Bed | 1122626.524 | -0.0637 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1214668.429 | +0.0545 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 3.045 | -0.0309 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.281 | -0.0229 | Higher Reimbursement Quality decreases predicted m |
Turnaround: 31%Turnaround possible (31%) but uncertain. Margin improvement depends on improving State Peer Margin.
Suburban Community Hospit
Archetype
42.2%
Distress Risk
$1.5M
RCM Opportunity
C
Opportunity Grade
-2.0%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P80. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
HI distress rate: 68.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.910 | -0.357 | ▼ risk |
| Net To Gross Ratio | 0.518 | +0.067 | ▲ risk |
| Revenue Per Bed | 1122626.524 | +0.027 | ▲ risk |
| Medicaid Day Pct | 0.071 | -0.018 | ▼ risk |
| Beds | 21.000 | -0.017 | ▼ risk |
| Medicare Day Pct | 0.386 | +0.010 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.5M
Current margin: -8.2%
Projected margin: -2.0%
Grade: C
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 | 0.543 | 0.624 | 8.1% | $1.2M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.518 | 0.608 | 9.0% | $247K | 65% | 18mo |
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 | 27.7 | [25.0, 75.0] | P41 | 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. |