ML Analysis — HARRIS HEALTH SYSTEM
CCN 450289 | 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.
46
/ 100 (C)
Financial Health6/25
RCM Upside20/25
Market Position9/20
Demand Defensibility11/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-25.4%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-53.7%, 2.9%]. P15 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 686650.118 | -0.1246 | Lower Revenue/Bed decreases predicted margin | |
| Bed Count | 576.000 | -0.0667 | Higher Bed Count decreases predicted margin | |
| Expense/Bed | 2148524.830 | -0.0605 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 6.356 | +0.0460 | Higher Log(Beds) increases predicted margin | |
| State Peer Margin | -0.006 | +0.0290 | Higher State Peer Margin increases predicted margi |
Turnaround: 14%Low turnaround probability (14%). Structural disadvantages in Revenue/Bed and Bed Count.
Safety-Net/Medicaid Heavy
Archetype
46.9%
Distress Risk
$2.8M
RCM Opportunity
D
Opportunity Grade
-49.3%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P94. High Medicaid dependence creates reimbursement risk. Assess DSH payments and state expansion status.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| WESTERN PEAKS SPECIALTY HOSPITAL | UT | 59 |
| HOSPITAL MENONITA AIBONITO | PR | 129 |
| TOPPENISH COMMUNITY HOSPITAL | WA | 47 |
| MINERAL COMMUNITY HOSPITAL | MT | 25 |
| BANNER UNIVERSITY MED CENTER SOUTH | AZ | 132 |
| NORTH COLORADO MEDICAL CENTER | CO | 202 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
TX distress rate: 42.8%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.818 | -0.272 | ▼ risk |
| Medicaid Day Pct | 0.262 | +0.173 | ▲ risk |
| Net To Gross Ratio | 0.235 | -0.059 | ▼ risk |
| Beds | 576.000 | +0.057 | ▲ risk |
| Revenue Per Bed | 686650.118 | +0.053 | ▲ risk |
| Medicare Day Pct | 0.041 | -0.049 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.8M
Current margin: -50.0%
Projected margin: -49.3%
Grade: D
Comps: 64
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 | 0.697 | 0.827 | 13.0% | $2.0M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.235 | 0.254 | 1.8% | $846K | 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 | 28.3 | [25.0, 75.0] | P45 | 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. |