ML Analysis — MCKENZIE HEALTH SYSTEM
CCN 231314 | 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.
37
/ 100 (D)
Financial Health2/25
RCM Upside18/25
Market Position8/20
Demand Defensibility4/15
Operational Efficiency6/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-13.1%
R²=0.34 | n=4,907 | Grade B | Actual: -7.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-41.4%, 15.2%]. P31 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1030069.440 | -0.0767 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1102952.880 | +0.0683 | Higher Expense/Bed increases predicted margin | |
| Net-to-Gross | 0.617 | +0.0279 | Higher Net-to-Gross increases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 105095.304 | -0.0255 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 28%Low turnaround probability (28%). Structural disadvantages in Revenue/Bed and Expense/Bed.
nan%
Distress Risk
$6.2M
RCM Opportunity
A
Opportunity Grade
16.9%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
MI distress rate: 50.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.102 | +0.393 | ▲ risk |
| Medicare Day Pct | 0.532 | +0.035 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.617 | +0.111 | ▲ risk |
| Revenue Per Bed | 1030069.440 | +0.032 | ▲ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.2M
Current margin: -7.1%
Projected margin: 16.9%
Grade: A
Comps: 72
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 | 0.468 | 0.691 | 22.2% | $3.3M | 50% | 24mo |
| Occupancy Improvement | 0.102 | 0.533 | 43.0% | $2.8M | 55% | 24mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |