ML Analysis — VIRGINIA MASON MEDICAL CENTER
CCN 500005 | 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 Upside21/25
Market Position9/20
Demand Defensibility15/15
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)
-4.6%
R²=0.34 | n=4,907 | Grade B | Actual: -23.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-32.9%, 23.7%]. P50 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 6156586.824 | -0.5543 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 4995427.883 | +0.4769 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 3836486.148 | +0.0983 | Higher Bed Utilization Value increases predicted m | |
| State Peer Margin | -0.103 | -0.0426 | Lower State Peer Margin decreases predicted margin | |
| Log(Beds) | 5.403 | +0.0239 | Higher Log(Beds) increases predicted margin |
Turnaround: 42%Turnaround possible (42%) but uncertain. Margin improvement depends on improving Expense/Bed.
Suburban Community Hospit
Archetype
37.6%
Distress Risk
$3.3M
RCM Opportunity
D
Opportunity Grade
-22.9%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P97. 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 | 0.768 | -0.225 | ▼ risk |
| Revenue Per Bed | 4995427.883 | -0.202 | ▼ risk |
| Medicaid Day Pct | 0.028 | -0.061 | ▼ risk |
| Medicare Day Pct | 0.394 | +0.011 | ▲ risk |
| Net To Gross Ratio | 0.343 | -0.011 | ▼ risk |
| Beds | 222.000 | +0.010 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $3.3M
Current margin: -23.2%
Projected margin: -22.9%
Grade: D
Comps: 33
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 | 0.578 | 0.738 | 16.0% | $2.4M | 50% | 24mo |
| Occupancy Improvement | 0.768 | 0.903 | 13.5% | $894K | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |