ML Analysis — CHILDRENS HOSPITAL OF THE KINGS DA
CCN 493301 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
64
/ 100 (B)
Financial Health11/25
RCM Upside20/25
Market Position14/20
Demand Defensibility11/15
Operational Efficiency8/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
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)
0.4%
R²=0.34 | n=4,907 | Grade B | Actual: -9.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-27.9%, 28.7%]. P63 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 2970931.198 | -0.1618 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 2703902.040 | +0.1570 | Higher Revenue/Bed increases predicted margin | |
| Medicaid % | 0.642 | -0.0669 | Higher Medicaid % decreases predicted margin | |
| State Peer Margin | 0.044 | +0.0666 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 1896582.095 | +0.0340 | Higher Bed Utilization Value increases predicted m |
Turnaround: 51%Turnaround possible (51%) but uncertain. Margin improvement depends on improving Expense/Bed.
Safety-Net/Medicaid Heavy
Archetype
56.1%
Distress Risk
$6.0M
RCM Opportunity
D
Opportunity Grade
-8.8%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P75. 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: High
National distress rate: 49.3%
VA distress rate: 29.6%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.642 | +0.552 | ▲ risk |
| Occupancy Rate | 0.701 | -0.164 | ▼ risk |
| Revenue Per Bed | 2703902.040 | -0.066 | ▼ risk |
| Medicare Day Pct | 0.002 | -0.056 | ▼ risk |
| Beds | 202.000 | +0.007 | ▲ risk |
| Net To Gross Ratio | 0.364 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.0M
Current margin: -9.9%
Projected margin: -8.8%
Grade: D
Comps: 39
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 | 0.356 | 0.710 | 35.4% | $5.3M | 50% | 24mo |
| Occupancy Improvement | 0.701 | 0.812 | 11.1% | $729K | 55% | 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 | 26.2 | [25.0, 75.0] | P36 | 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. |