ML Analysis — HIGHLANDS HOSPITAL
CCN 390184 | 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.
37
/ 100 (D)
Financial Health3/25
RCM Upside19/25
Market Position8/20
Demand Defensibility5/15
Operational Efficiency2/15
Entry Multiple: 6.0x – 8.5x
Est. MOIC: 1.5x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-14.2%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-42.5%, 14.1%]. P29 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 360345.082 | -0.1702 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 563867.836 | +0.1347 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.319 | -0.0337 | Higher Reimbursement Quality decreases predicted m | |
| Bed Utilization Value | 122370.050 | -0.0249 | Lower Bed Utilization Value decreases predicted ma | |
| Commercial % | 0.985 | +0.0163 | Higher Commercial % increases predicted margin |
Turnaround: 27%Low turnaround probability (27%). Structural disadvantages in Revenue/Bed and Expense/Bed.
nan%
Distress Risk
$2.9M
RCM Opportunity
B
Opportunity Grade
-36.8%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
PA distress rate: 48.1%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.340 | +0.172 | ▲ risk |
| Medicare Day Pct | nan | +nan | ▼ risk |
| Medicaid Day Pct | 0.015 | -0.074 | ▼ risk |
| Revenue Per Bed | 360345.082 | +0.072 | ▲ risk |
| Net To Gross Ratio | 0.323 | -0.020 | ▼ risk |
| Beds | 61.000 | -0.012 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.9M
Current margin: -50.0%
Projected margin: -36.8%
Grade: B
Comps: 87
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.340 | 0.742 | 40.2% | $2.7M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.323 | 0.417 | 9.4% | $241K | 65% | 18mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |