ML Analysis — KETTERING HEALTH TROY
CCN 360368 | 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.
52
/ 100 (C)
Financial Health8/25
RCM Upside19/25
Market Position15/20
Demand Defensibility6/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-2.7%
R²=0.34 | n=4,907 | Grade B | Actual: -7.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-31.0%, 25.6%]. P56 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2290155.786 | +0.0992 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2454453.071 | -0.0982 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.004 | +0.0313 | Higher State Peer Margin increases predicted margi | |
| Log(Beds) | 3.332 | -0.0242 | Lower Log(Beds) decreases predicted margin | |
| Reimbursement Quality | 0.126 | +0.0217 | Higher Reimbursement Quality increases predicted m |
Turnaround: 45%Turnaround possible (45%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
45.5%
Distress Risk
$3.1M
RCM Opportunity
D
Opportunity Grade
-2.3%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P14. 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%
OH distress rate: 37.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.184 | -0.082 | ▼ risk |
| Medicaid Day Pct | 0.019 | -0.070 | ▼ risk |
| Occupancy Rate | 0.459 | +0.062 | ▲ risk |
| Revenue Per Bed | 2290155.786 | -0.042 | ▼ risk |
| Beds | 28.000 | -0.016 | ▼ risk |
| Medicare Day Pct | 0.296 | -0.005 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.1M
Current margin: -7.2%
Projected margin: -2.3%
Grade: D
Comps: 87
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.184 | 0.476 | 29.2% | $2.2M | 65% | 18mo |
| Occupancy Improvement | 0.459 | 0.584 | 12.5% | $827K | 55% | 24mo |
| Payer Mix Optimization | 0.685 | 0.693 | 0.8% | $125K | 50% | 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 | 31.3 | [25.0, 75.0] | P66 | 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. |