ML Analysis — SANFORD BEHAVIORAL HEALTH
CCN 244018 | 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 Position14/20
Demand Defensibility4/15
Operational Efficiency4/15
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:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-15.8%
R²=0.34 | n=4,907 | Grade B | Actual: -25.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-44.1%, 12.5%]. P26 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 773584.875 | -0.1125 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 971936.688 | +0.0844 | Higher Expense/Bed increases predicted margin | |
| Medicaid % | 0.496 | -0.0492 | Higher Medicaid % decreases predicted margin | |
| Log(Beds) | 2.773 | -0.0372 | Lower Log(Beds) decreases predicted margin | |
| Net-to-Gross | 0.562 | +0.0216 | Higher Net-to-Gross increases predicted margin |
Turnaround: 25%Low turnaround probability (25%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Safety-Net/Medicaid Heavy
Archetype
62.8%
Distress Risk
$3.2M
RCM Opportunity
A
Opportunity Grade
0.1%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P14. 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%
MN distress rate: 45.4%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.496 | +0.406 | ▲ risk |
| Net To Gross Ratio | 0.562 | +0.086 | ▲ risk |
| Occupancy Rate | 0.457 | +0.064 | ▲ risk |
| Revenue Per Bed | 773584.875 | +0.048 | ▲ risk |
| Medicare Day Pct | 0.113 | -0.037 | ▼ risk |
| Beds | 16.000 | -0.018 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.2M
Current margin: -25.6%
Projected margin: 0.1%
Grade: A
Comps: 87
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 | 0.391 | 0.596 | 20.5% | $3.1M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.562 | 0.642 | 8.0% | $116K | 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 | 32.7 | [25.0, 75.0] | P73 | 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 | 99.4% | [90.0%, 99.5%] | P6 | Strong — predicted net collection rate is in the top third. |