ML Analysis — SEVEN HILLS BEHAVIORAL INSTITUTE
CCN 294012 | 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.
44
/ 100 (D)
Financial Health6/25
RCM Upside19/25
Market Position9/20
Demand Defensibility8/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-6.8%
R²=0.34 | n=4,907 | Grade B | Actual: -11.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.1%, 21.5%]. P45 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 143815.463 | -0.2004 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 159898.500 | +0.1845 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | 0.004 | +0.0369 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 78467.787 | -0.0264 | Lower Bed Utilization Value decreases predicted ma | |
| Reimbursement Quality | 0.285 | -0.0240 | Higher Reimbursement Quality decreases predicted m |
Turnaround: 38%Turnaround possible (38%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Under-Performing / Distre
Archetype
49.1%
Distress Risk
$1.4M
RCM Opportunity
C
Opportunity Grade
-4.0%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P74. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
NV distress rate: 37.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 143815.463 | +0.085 | ▲ risk |
| Medicare Day Pct | 0.054 | -0.047 | ▼ risk |
| Occupancy Rate | 0.546 | -0.019 | ▼ risk |
| Net To Gross Ratio | 0.329 | -0.018 | ▼ risk |
| Medicaid Day Pct | 0.080 | -0.009 | ▼ risk |
| Beds | 134.000 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.4M
Current margin: -11.2%
Projected margin: -4.0%
Grade: C
Comps: 19
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.546 | 0.725 | 18.0% | $1.2M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.329 | 0.421 | 9.2% | $208K | 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 | 25.6 | [25.0, 75.0] | P31 | 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. |