ML Analysis — WESTERN STATE HOSPITAL
CCN 494021 | 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.
41
/ 100 (D)
Financial Health3/25
RCM Upside20/25
Market Position10/20
Demand Defensibility8/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-10.8%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-39.1%, 17.5%]. P35 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 55653.464 | -0.2127 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 991256.893 | +0.0820 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | 0.044 | +0.0666 | Higher State Peer Margin increases predicted margi | |
| Reimbursement Quality | 0.047 | +0.0446 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.051 | -0.0357 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 32%Turnaround possible (32%) but uncertain. Margin improvement depends on improving Revenue/Bed.
nan%
Distress Risk
$567K
RCM Opportunity
B
Opportunity Grade
-37.9%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
VA distress rate: 29.6%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.719 | -0.180 | ▼ risk |
| Medicare Day Pct | 0.079 | -0.043 | ▼ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.051 | -0.142 | ▼ risk |
| Revenue Per Bed | 55653.464 | +0.090 | ▲ risk |
| Beds | 84.000 | -0.009 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $567K
Current margin: -50.0%
Projected margin: -37.9%
Grade: B
Comps: 53
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.719 | 0.783 | 6.3% | $417K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.051 | 0.324 | 27.4% | $150K | 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. |