ML Analysis — PHD#1 DBA SKAGIT VALLEY HOSPITAL
CCN 500003 | 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 Health8/25
RCM Upside21/25
Market Position15/20
Demand Defensibility13/15
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
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-3.9%
R²=0.34 | n=4,907 | Grade B | Actual: -17.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-32.2%, 24.4%]. P52 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 3566540.117 | -0.2352 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 3023793.248 | +0.2016 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 2577284.112 | +0.0565 | Higher Bed Utilization Value increases predicted m | |
| State Peer Margin | -0.103 | -0.0426 | Lower State Peer Margin decreases predicted margin | |
| Occupancy | 0.852 | +0.0186 | Higher Occupancy increases predicted margin |
Turnaround: 43%Turnaround possible (43%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
37.3%
Distress Risk
$5.2M
RCM Opportunity
D
Opportunity Grade
-16.7%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P56. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| CLARA MAASS MEDICAL CENTER | NJ | 259 |
| PRESENCE SAINTS MARY & ELIZABETH MED | IL | 266 |
| ADVENTIST HEALTH BAKERSFIELD | CA | 254 |
| BRISTOL REGIONAL MEDICAL CENTER | TN | 244 |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 |
| SPRINGFIELD REGIONAL MEDICAL CENTER | OH | 230 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
WA distress rate: 67.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.852 | -0.304 | ▼ risk |
| Revenue Per Bed | 3023793.248 | -0.085 | ▼ risk |
| Medicaid Day Pct | 0.031 | -0.058 | ▼ risk |
| Net To Gross Ratio | 0.275 | -0.042 | ▼ risk |
| Beds | 137.000 | -0.002 | ▼ risk |
| Medicare Day Pct | 0.322 | -0.001 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.2M
Current margin: -17.9%
Projected margin: -16.7%
Grade: D
Comps: 32
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.275 | 0.349 | 7.4% | $3.6M | 65% | 18mo |
| Payer Mix Optimization | 0.647 | 0.752 | 10.5% | $1.6M | 50% | 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 | 25.2 | [25.0, 75.0] | P29 | 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. |