ML Analysis — DELTA HEALTH-NORTHWEST REGIONAL
CCN 250042 | 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.
40
/ 100 (D)
Financial Health4/25
RCM Upside18/25
Market Position13/20
Demand Defensibility5/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-23.0%
R²=0.34 | n=4,907 | Grade B | Actual: -30.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-51.3%, 5.3%]. P18 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 178094.184 | -0.1956 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 232902.218 | +0.1755 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.125 | -0.0591 | Lower State Peer Margin decreases predicted margin | |
| Medicaid % | 0.461 | -0.0451 | Higher Medicaid % decreases predicted margin | |
| Reimbursement Quality | 0.053 | +0.0427 | Higher Reimbursement Quality increases predicted m |
Turnaround: 16%Low turnaround probability (16%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Safety-Net/Medicaid Heavy
Archetype
66.9%
Distress Risk
$6.4M
RCM Opportunity
A
Opportunity Grade
-10.2%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P73. 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 |
|---|---|---|---|
| Occupancy Rate | 0.102 | +0.392 | ▲ risk |
| Medicaid Day Pct | 0.461 | +0.372 | ▲ risk |
| Net To Gross Ratio | 0.151 | -0.097 | ▼ risk |
| Revenue Per Bed | 178094.184 | +0.083 | ▲ risk |
| Medicare Day Pct | 0.186 | -0.024 | ▼ risk |
| Beds | 174.000 | +0.003 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.4M
Current margin: -30.8%
Projected margin: -10.2%
Grade: A
Comps: 26
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.102 | 0.555 | 45.2% | $3.0M | 55% | 24mo |
| Payer Mix Optimization | 0.353 | 0.543 | 19.0% | $2.8M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.151 | 0.305 | 15.4% | $560K | 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 | 99.5% | [90.0%, 99.5%] | P8 | Strong — predicted net collection rate is in the top third. |