ML Analysis — HEALTHSOURCE SAGINAW INC.
CCN 230275 | 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.
49
/ 100 (C)
Financial Health4/25
RCM Upside20/25
Market Position11/20
Demand Defensibility4/15
Operational Efficiency10/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-21.6%
R²=0.34 | n=4,907 | Grade B | Actual: -28.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-49.9%, 6.7%]. P19 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 7571613.429 | -0.7286 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 5873567.000 | +0.5994 | Higher Revenue/Bed increases predicted margin | |
| Medicaid % | 0.626 | -0.0650 | Higher Medicaid % decreases predicted margin | |
| Log(Beds) | 1.946 | -0.0564 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 2572415.449 | +0.0564 | Higher Bed Utilization Value increases predicted m |
Turnaround: 18%Low turnaround probability (18%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Safety-Net/Medicaid Heavy
Archetype
60.1%
Distress Risk
$4.2M
RCM Opportunity
B
Opportunity Grade
-18.8%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P91. High Medicaid dependence creates reimbursement risk. Assess DSH payments and state expansion status.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| WESTERN PEAKS SPECIALTY HOSPITAL | UT | 59 |
| HOSPITAL MENONITA AIBONITO | PR | 129 |
| TOPPENISH COMMUNITY HOSPITAL | WA | 47 |
| MINERAL COMMUNITY HOSPITAL | MT | 25 |
| BANNER UNIVERSITY MED CENTER SOUTH | AZ | 132 |
| NORTH COLORADO MEDICAL CENTER | CO | 202 |
Distress Analysis
Risk: High
National distress rate: 49.3%
MI distress rate: 50.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.626 | +0.537 | ▲ risk |
| Revenue Per Bed | 5873567.000 | -0.254 | ▼ risk |
| Net To Gross Ratio | 0.671 | +0.135 | ▲ risk |
| Occupancy Rate | 0.438 | +0.081 | ▲ risk |
| Medicare Day Pct | 0.072 | -0.044 | ▼ risk |
| Beds | 7.000 | -0.019 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.2M
Current margin: -28.9%
Projected margin: -18.8%
Grade: B
Comps: 193
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 | 0.301 | 0.564 | 26.3% | $3.9M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.671 | 0.718 | 4.7% | $226K | 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 | 36.2 | [25.0, 75.0] | P80 | 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 | 98.6% | [90.0%, 99.5%] | P2 | Strong — predicted net collection rate is in the top third. |