ML Analysis — MCALESTER REGIONAL HEALTH CENTER
CCN 370034 | 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 Health5/25
RCM Upside19/25
Market Position13/20
Demand Defensibility10/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-18.6%
R²=0.34 | n=4,907 | Grade B | Actual: -45.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-46.9%, 9.8%]. P22 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 612703.983 | -0.1349 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 890711.393 | +0.0944 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.088 | -0.0313 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.097 | +0.0302 | Higher Reimbursement Quality increases predicted m | |
| Medicaid % | 0.313 | -0.0271 | Higher Medicaid % decreases predicted margin |
Turnaround: 21%Low turnaround probability (21%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Under-Performing / Distre
Archetype
62.1%
Distress Risk
$5.8M
RCM Opportunity
C
Opportunity Grade
-37.2%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P94. 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%
OK distress rate: 58.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.236 | +0.268 | ▲ risk |
| Medicaid Day Pct | 0.313 | +0.224 | ▲ risk |
| Revenue Per Bed | 612703.983 | +0.057 | ▲ risk |
| Net To Gross Ratio | 0.296 | -0.032 | ▼ risk |
| Medicare Day Pct | 0.360 | +0.006 | ▲ risk |
| Beds | 117.000 | -0.004 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.8M
Current margin: -45.4%
Projected margin: -37.2%
Grade: C
Comps: 35
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.236 | 0.744 | 50.8% | $3.4M | 55% | 24mo |
| Payer Mix Optimization | 0.327 | 0.464 | 13.8% | $2.1M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.296 | 0.347 | 5.1% | $426K | 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 | 32.1 | [25.0, 75.0] | P71 | 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. |