ML Analysis — WALTER KNOX MEMORIAL HOSPITAL
CCN 131318 | 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.
48
/ 100 (C)
Financial Health2/25
RCM Upside19/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-15.1%
R²=0.34 | n=4,907 | Grade B | Actual: -15.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-43.4%, 13.2%]. P28 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Log(Beds) | 2.565 | -0.0420 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.321 | -0.0345 | Higher Reimbursement Quality decreases predicted m | |
| Expense/Bed | 1909556.615 | -0.0311 | Higher Expense/Bed decreases predicted margin | |
| Net-to-Gross | 0.603 | +0.0263 | Higher Net-to-Gross increases predicted margin | |
| Bed Count | 13.000 | +0.0212 | Higher Bed Count increases predicted margin |
Turnaround: 26%Low turnaround probability (26%). Structural disadvantages in Log(Beds) and Reimbursement Quality.
Under-Performing / Distre
Archetype
59.8%
Distress Risk
$1.3M
RCM Opportunity
C
Opportunity Grade
-8.9%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P41. 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%
ID distress rate: 46.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.223 | +0.281 | ▲ risk |
| Net To Gross Ratio | 0.603 | +0.104 | ▲ risk |
| Medicaid Day Pct | 0.151 | +0.062 | ▲ risk |
| Beds | 13.000 | -0.018 | ▼ risk |
| Revenue Per Bed | 1660104.538 | -0.005 | ▼ risk |
| Medicare Day Pct | 0.316 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.3M
Current margin: -15.0%
Projected margin: -8.9%
Grade: C
Comps: 26
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.223 | 0.391 | 16.8% | $1.1M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.603 | 0.686 | 8.3% | $211K | 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 | 31.6 | [25.0, 75.0] | P68 | 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. |