ML Analysis — LARNED STATE HOSPITAL
CCN 174006 | 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 Health3/25
RCM Upside19/25
Market Position15/20
Demand Defensibility6/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-31.3%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-59.6%, -3.0%]. P12 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 151609.232 | -0.1993 | Lower Revenue/Bed decreases predicted margin | |
| State Peer Margin | -0.177 | -0.0972 | Lower State Peer Margin decreases predicted margin | |
| Expense/Bed | 1097957.939 | +0.0689 | Higher Expense/Bed increases predicted margin | |
| Bed Utilization Value | 73238.986 | -0.0265 | Lower Bed Utilization Value decreases predicted ma | |
| Net-to-Gross | 0.169 | -0.0224 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 10%Low turnaround probability (10%). Structural disadvantages in Revenue/Bed and State Peer Margin.
Under-Performing / Distre
Archetype
50.2%
Distress Risk
$766K
RCM Opportunity
D
Opportunity Grade
-44.9%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P61. 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%
KS distress rate: 76.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.169 | -0.089 | ▼ risk |
| Revenue Per Bed | 151609.232 | +0.084 | ▲ risk |
| Medicaid Day Pct | 0.131 | +0.042 | ▲ risk |
| Occupancy Rate | 0.483 | +0.039 | ▲ risk |
| Medicare Day Pct | 0.118 | -0.036 | ▼ risk |
| Beds | 99.000 | -0.007 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $766K
Current margin: -50.0%
Projected margin: -44.9%
Grade: D
Comps: 22
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.169 | 0.418 | 24.9% | $438K | 65% | 18mo |
| Occupancy Improvement | 0.483 | 0.533 | 5.0% | $328K | 55% | 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 | 35.1 | [25.0, 75.0] | P79 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 98.7% | [90.0%, 99.5%] | P2 | Strong — predicted net collection rate is in the top third. |