ML Analysis — CHEROKEE REGIONAL MEDICAL CENTER
CCN 161362 | 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.
45
/ 100 (C)
Financial Health2/25
RCM Upside18/25
Market Position15/20
Demand Defensibility5/15
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)
-12.1%
R²=0.34 | n=4,907 | Grade B | Actual: -7.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-40.4%, 16.2%]. P33 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 1960676.040 | -0.0374 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 1832176.960 | +0.0353 | Higher Revenue/Bed increases predicted margin | |
| Net-to-Gross | 0.639 | +0.0303 | Higher Net-to-Gross increases predicted margin | |
| State Peer Margin | -0.082 | -0.0269 | Lower State Peer Margin decreases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin |
Turnaround: 30%Low turnaround probability (30%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Rural/Critical Access
Archetype
57.1%
Distress Risk
$976K
RCM Opportunity
D
Opportunity Grade
-4.9%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P9. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
IA distress rate: 67.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.234 | +0.270 | ▲ risk |
| Net To Gross Ratio | 0.639 | +0.120 | ▲ risk |
| Medicaid Day Pct | 0.004 | -0.085 | ▼ risk |
| Medicare Day Pct | 0.544 | +0.037 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
| Revenue Per Bed | 1832176.960 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $976K
Current margin: -7.0%
Projected margin: -4.9%
Grade: D
Comps: 93
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.234 | 0.330 | 9.5% | $629K | 55% | 24mo |
| Payer Mix Optimization | 0.452 | 0.475 | 2.3% | $347K | 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 | 28.8 | [25.0, 75.0] | P49 | 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. |