ML Analysis — WILLIS-KNIGHTON HEALTH SYSTEMS
CCN 190111 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
62
/ 100 (B)
Financial Health19/25
RCM Upside10/25
Market Position11/20
Demand Defensibility15/15
Operational Efficiency7/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-4.9%
R²=0.34 | n=4,907 | Grade B | Actual: 6.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.2%, 23.4%]. P50 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Bed Count | 686.000 | -0.0838 | Higher Bed Count decreases predicted margin | |
| Log(Beds) | 6.531 | +0.0501 | Higher Log(Beds) increases predicted margin | |
| Expense/Bed | 1380188.254 | +0.0341 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 1482433.369 | -0.0135 | Lower Revenue/Bed decreases predicted margin | |
| Net-to-Gross | 0.271 | -0.0109 | Lower Net-to-Gross decreases predicted margin |
Large Academic Medical Ce
Archetype
45.4%
Distress Risk
$8.6M
RCM Opportunity
D
Opportunity Grade
7.8%
Projected Margin
Cluster: Large Academic Medical Center
Percentile within cluster: P68. Large medical centers trade at premium multiples (12-14x). Limited PE value creation but strong cash flow.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| NORTH CAROLINA BAPTIST HOSPITAL | NC | 800 |
| HACKENSACK UNIVERSITY MEDICAL CENTER | NJ | 779 |
| TEMPLE UNIVERSITY HOSPITAL | PA | 761 |
| VCU HEALTH SYSTEM MCV HOSPITAL | VA | 842 |
| UH CLEVELAND MEDICAL CENTER | OH | 660 |
| FROEDTERT MEM. LUTHERAN HOSPT. | WI | 731 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.647 | -0.113 | ▼ risk |
| Medicaid Day Pct | 0.009 | -0.079 | ▼ risk |
| Beds | 686.000 | +0.072 | ▲ risk |
| Net To Gross Ratio | 0.271 | -0.043 | ▼ risk |
| Revenue Per Bed | 1482433.369 | +0.006 | ▲ risk |
| Medicare Day Pct | 0.335 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $8.6M
Current margin: 6.9%
Projected margin: 7.8%
Grade: D
Comps: 564
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 | 0.271 | 0.321 | 5.0% | $5.9M | 65% | 18mo |
| Payer Mix Optimization | 0.656 | 0.760 | 10.4% | $1.6M | 50% | 24mo |
| Occupancy Improvement | 0.647 | 0.825 | 17.8% | $1.2M | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |