ML Analysis — MERIT HEALTH RIVER REGION
CCN 250031 | 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.
51
/ 100 (C)
Financial Health11/25
RCM Upside14/25
Market Position15/20
Demand Defensibility10/15
Operational Efficiency1/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-14.7%
R²=0.34 | n=4,907 | Grade B | Actual: 1.5%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-43.0%, 13.6%]. P28 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 689029.161 | -0.1243 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 678649.219 | +0.1205 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.125 | -0.0591 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.047 | +0.0444 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.094 | -0.0308 | Lower Net-to-Gross decreases predicted margin |
Safety-Net/Medicaid Heavy
Archetype
50.8%
Distress Risk
$3.1M
RCM Opportunity
D
Opportunity Grade
4.4%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P28. 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%
MS distress rate: 68.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.260 | +0.171 | ▲ risk |
| Net To Gross Ratio | 0.094 | -0.123 | ▼ risk |
| Revenue Per Bed | 689029.161 | +0.053 | ▲ risk |
| Occupancy Rate | 0.556 | -0.029 | ▼ risk |
| Medicare Day Pct | 0.235 | -0.016 | ▼ risk |
| Beds | 155.000 | +0.001 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.1M
Current margin: 1.5%
Projected margin: 4.4%
Grade: D
Comps: 29
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 | 0.094 | 0.305 | 21.2% | $2.6M | 65% | 18mo |
| Payer Mix Optimization | 0.505 | 0.538 | 3.2% | $487K | 50% | 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 | 27.4 | [25.0, 75.0] | P40 | 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. |