ML Analysis — TRI VALLEY HEALTH SYSTEM
CCN 281348 | 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.
38
/ 100 (D)
Financial Health3/25
RCM Upside19/25
Market Position8/20
Demand Defensibility2/15
Operational Efficiency6/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Heavy Medicare dependence (>55%)
- 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)
-10.6%
R²=0.34 | n=4,907 | Grade B | Actual: -10.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-38.9%, 17.7%]. P36 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1191651.650 | -0.0541 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1315563.000 | +0.0421 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 2.996 | -0.0320 | Lower Log(Beds) decreases predicted margin | |
| Net-to-Gross | 0.614 | +0.0275 | Higher Net-to-Gross increases predicted margin | |
| Bed Utilization Value | 193439.343 | -0.0225 | Lower Bed Utilization Value decreases predicted ma |
Turnaround: 32%Turnaround possible (32%) but uncertain. Margin improvement depends on improving Revenue/Bed.
nan%
Distress Risk
$3.0M
RCM Opportunity
B
Opportunity Grade
2.0%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
NE distress rate: 53.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.162 | +0.337 | ▲ risk |
| Medicare Day Pct | 0.747 | +0.072 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.614 | +0.109 | ▲ risk |
| Revenue Per Bed | 1191651.650 | +0.023 | ▲ risk |
| Beds | 20.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.0M
Current margin: -10.4%
Projected margin: 2.0%
Grade: B
Comps: 69
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 | 0.253 | 0.381 | 12.8% | $1.9M | 50% | 24mo |
| Occupancy Improvement | 0.162 | 0.249 | 8.6% | $571K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.614 | 0.779 | 16.4% | $459K | 65% | 18mo |
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. |