ML Analysis — KINDRED HOSPITAL NEW JERSEY
CCN 312020 | 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.
48
/ 100 (C)
Financial Health8/25
RCM Upside17/25
Market Position13/20
Demand Defensibility10/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-5.4%
R²=0.34 | n=4,907 | Grade B | Actual: -1.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.7%, 22.9%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 520478.490 | -0.1478 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 528818.673 | +0.1390 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.100 | +0.0291 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 307885.788 | -0.0187 | Lower Bed Utilization Value decreases predicted ma | |
| Net-to-Gross | 0.209 | -0.0179 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 41%Turnaround possible (41%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
46.1%
Distress Risk
$5.8M
RCM Opportunity
B
Opportunity Grade
9.1%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P56. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PROMEDICA HICKMAN HOSPITAL | MI | 58 |
| WATAUGA MEDICAL CENTER | NC | 95 |
| ST LUKES HOSPITAL - EASTON CAMPUS | PA | 29 |
| CULPEPER MEMORIAL HOSPITAL | VA | 70 |
| SOUTHSIDE COMMUNITY HOSPITAL | VA | 80 |
| SPECTRUM HEALTH LUDINGTON | MI | 45 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
NJ distress rate: 47.9%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.005 | -0.084 | ▼ risk |
| Net To Gross Ratio | 0.209 | -0.071 | ▼ risk |
| Revenue Per Bed | 520478.490 | +0.063 | ▲ risk |
| Occupancy Rate | 0.592 | -0.062 | ▼ risk |
| Medicare Day Pct | 0.516 | +0.032 | ▲ risk |
| Beds | 104.000 | -0.006 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.8M
Current margin: -1.6%
Projected margin: 9.1%
Grade: B
Comps: 48
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 | 0.479 | 0.737 | 25.7% | $3.9M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.209 | 0.370 | 16.1% | $1.0M | 65% | 18mo |
| Occupancy Improvement | 0.592 | 0.727 | 13.5% | $891K | 55% | 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 | 27.8 | [25.0, 75.0] | P43 | 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. |