ML Analysis — RED RIVER BEHAVIORAL HEALTH SYSTEM
CCN 354005 | 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 Health2/25
RCM Upside19/25
Market Position13/20
Demand Defensibility7/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-14.5%
R²=0.34 | n=4,907 | Grade B | Actual: -13.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-42.8%, 13.8%]. P28 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 134761.157 | -0.2016 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 152513.229 | +0.1854 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.093 | -0.0351 | Lower State Peer Margin decreases predicted margin | |
| Bed Utilization Value | 75209.059 | -0.0265 | Lower Bed Utilization Value decreases predicted ma | |
| Medicaid % | 0.201 | -0.0135 | Higher Medicaid % decreases predicted margin |
Turnaround: 26%Low turnaround probability (26%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Under-Performing / Distre
Archetype
51.3%
Distress Risk
$3.0M
RCM Opportunity
A
Opportunity Grade
18.4%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P70. 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: High
National distress rate: 49.3%
ND distress rate: 69.4%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.200 | +0.111 | ▲ risk |
| Revenue Per Bed | 134761.157 | +0.085 | ▲ risk |
| Net To Gross Ratio | 0.253 | -0.051 | ▼ risk |
| Occupancy Rate | 0.558 | -0.031 | ▼ risk |
| Medicare Day Pct | 0.182 | -0.025 | ▼ risk |
| Beds | 70.000 | -0.011 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.0M
Current margin: -13.2%
Projected margin: 18.4%
Grade: A
Comps: 2205
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 | 0.617 | 0.729 | 11.2% | $1.7M | 50% | 24mo |
| Occupancy Improvement | 0.558 | 0.725 | 16.6% | $1.1M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.253 | 0.442 | 18.9% | $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 | 28.0 | [25.0, 75.0] | P44 | 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. |