ML Analysis — HERITAGE VALLEY KENNEDY
CCN 390157 | 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 Health3/25
RCM Upside18/25
Market Position15/20
Demand Defensibility6/15
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:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-16.2%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-44.5%, 12.1%]. P26 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 521671.425 | -0.1476 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 916550.977 | +0.0912 | Higher Expense/Bed increases predicted margin | |
| Bed Utilization Value | 86197.763 | -0.0261 | Lower Bed Utilization Value decreases predicted ma | |
| Occupancy | 0.165 | -0.0204 | Lower Occupancy decreases predicted margin | |
| Reimbursement Quality | 0.241 | -0.0113 | Higher Reimbursement Quality decreases predicted m |
Turnaround: 24%Low turnaround probability (24%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Under-Performing / Distre
Archetype
55.8%
Distress Risk
$4.7M
RCM Opportunity
B
Opportunity Grade
-39.6%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P64. 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%
PA distress rate: 48.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.165 | +0.334 | ▲ risk |
| Medicaid Day Pct | 0.007 | -0.082 | ▼ risk |
| Revenue Per Bed | 521671.425 | +0.062 | ▲ risk |
| Net To Gross Ratio | 0.310 | -0.026 | ▼ risk |
| Medicare Day Pct | 0.216 | -0.019 | ▼ risk |
| Beds | 87.000 | -0.008 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.7M
Current margin: -50.0%
Projected margin: -39.6%
Grade: B
Comps: 101
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.165 | 0.754 | 58.9% | $3.9M | 55% | 24mo |
| Payer Mix Optimization | 0.778 | 0.809 | 3.1% | $464K | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.310 | 0.378 | 6.9% | $364K | 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 | 33.8 | [25.0, 75.0] | P77 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.3% | [90.0%, 99.5%] | P6 | Strong — predicted net collection rate is in the top third. |