ML Analysis — NORTHLAKE BEHAVIORAL HEALTH SYSTEM
CCN 194007 | 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.
46
/ 100 (C)
Financial Health4/25
RCM Upside19/25
Market Position11/20
Demand Defensibility8/15
Operational Efficiency4/15
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)
-11.8%
R²=0.34 | n=4,907 | Grade B | Actual: -24.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-40.1%, 16.5%]. P33 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 112830.993 | -0.2047 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 140227.900 | +0.1869 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.472 | -0.0778 | Higher Reimbursement Quality decreases predicted m | |
| Bed Utilization Value | 57267.801 | -0.0271 | Lower Bed Utilization Value decreases predicted ma | |
| Commercial % | 0.990 | +0.0165 | Higher Commercial % increases predicted margin |
Turnaround: 30%Turnaround possible (30%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Under-Performing / Distre
Archetype
49.6%
Distress Risk
$1.2M
RCM Opportunity
C
Opportunity Grade
-16.4%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P76. 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%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 112830.993 | +0.087 | ▲ risk |
| Medicaid Day Pct | 0.004 | -0.085 | ▼ risk |
| Medicare Day Pct | 0.006 | -0.055 | ▼ risk |
| Net To Gross Ratio | 0.476 | +0.048 | ▲ risk |
| Occupancy Rate | 0.508 | +0.016 | ▲ risk |
| Beds | 140.000 | -0.001 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.2M
Current margin: -24.3%
Projected margin: -16.4%
Grade: C
Comps: 43
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.508 | 0.697 | 18.9% | $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 | 25.4 | [25.0, 75.0] | P29 | 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. |