ML Analysis — KINDRED HOSPITAL CHICAGO
CCN 142008 | 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.
44
/ 100 (D)
Financial Health5/25
RCM Upside19/25
Market Position9/20
Demand Defensibility10/15
Operational Efficiency0/15
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)
-9.9%
R²=0.34 | n=4,907 | Grade B | Actual: -23.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-38.2%, 18.4%]. P37 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 383845.573 | -0.1669 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 473909.173 | +0.1458 | Higher Expense/Bed increases predicted margin | |
| Bed Utilization Value | 211991.899 | -0.0219 | Lower Bed Utilization Value decreases predicted ma | |
| Log(Beds) | 5.220 | +0.0197 | Higher Log(Beds) increases predicted margin | |
| Reimbursement Quality | 0.134 | +0.0196 | Higher Reimbursement Quality increases predicted m |
Turnaround: 33%Turnaround possible (33%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Under-Performing / Distre
Archetype
48.8%
Distress Risk
$3.2M
RCM Opportunity
D
Opportunity Grade
-18.9%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P15. 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: Elevated
National distress rate: 49.3%
IL distress rate: 51.0%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.206 | -0.073 | ▼ risk |
| Revenue Per Bed | 383845.573 | +0.071 | ▲ risk |
| Occupancy Rate | 0.552 | -0.025 | ▼ risk |
| Medicaid Day Pct | 0.105 | +0.016 | ▲ risk |
| Medicare Day Pct | 0.245 | -0.014 | ▼ risk |
| Beds | 185.000 | +0.005 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.2M
Current margin: -23.5%
Projected margin: -18.9%
Grade: D
Comps: 98
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 | 0.649 | 0.729 | 8.0% | $1.2M | 50% | 24mo |
| Occupancy Improvement | 0.552 | 0.705 | 15.3% | $1.0M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.206 | 0.326 | 12.1% | $1.0M | 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 | 27.0 | [25.0, 75.0] | P38 | 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. |