ML Analysis — MCKENZIE COUNTY HEALTHCARE SYSTEM
CCN 351302 | 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 Health5/25
RCM Upside19/25
Market Position12/20
Demand Defensibility2/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
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)
-14.7%
R²=0.34 | n=4,907 | Grade B | Actual: -20.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-43.0%, 13.6%]. P28 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2158620.833 | -0.0618 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.093 | -0.0351 | Lower State Peer Margin decreases predicted margin | |
| Net-to-Gross | 0.655 | +0.0321 | Higher Net-to-Gross increases predicted margin | |
| Revenue/Bed | 1796227.583 | +0.0303 | Higher Revenue/Bed increases predicted margin | |
| Log(Beds) | 3.178 | -0.0278 | Lower Log(Beds) decreases predicted margin |
Turnaround: 26%Low turnaround probability (26%). Structural disadvantages in Expense/Bed and State Peer Margin.
Rural/Critical Access
Archetype
60.6%
Distress Risk
$6.9M
RCM Opportunity
A
Opportunity Grade
-4.2%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P19. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
ND distress rate: 69.4%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.196 | +0.306 | ▲ risk |
| Net To Gross Ratio | 0.655 | +0.127 | ▲ risk |
| Medicare Day Pct | 0.652 | +0.056 | ▲ risk |
| Beds | 24.000 | -0.017 | ▼ risk |
| Revenue Per Bed | 1796227.583 | -0.013 | ▼ risk |
| Medicaid Day Pct | 0.085 | -0.004 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.9M
Current margin: -20.2%
Projected margin: -4.2%
Grade: A
Comps: 40
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 | 0.263 | 0.509 | 24.5% | $3.7M | 50% | 24mo |
| Occupancy Improvement | 0.196 | 0.495 | 30.0% | $2.0M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.655 | 0.895 | 24.0% | $1.2M | 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 | 31.2 | [25.0, 75.0] | P65 | 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. |