ML Analysis — FRED HUTCHINSON CANCER CENTER
CCN 500138 | 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.
55
/ 100 (C)
Financial Health5/25
RCM Upside23/25
Market Position9/20
Demand Defensibility8/15
Operational Efficiency10/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-100.0%
R²=0.34 | n=4,907 | Grade B | Actual: -50.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-128.3%, -71.7%]. P0 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 98787252.100 | -11.9655 | Higher Expense/Bed decreases predicted margin | |
| Revenue/Bed | 58577263.850 | +7.9564 | Higher Revenue/Bed increases predicted margin | |
| Bed Utilization Value | 54781778.124 | +1.7883 | Higher Bed Utilization Value increases predicted m | |
| Reimbursement Quality | 0.373 | -0.0494 | Higher Reimbursement Quality decreases predicted m | |
| State Peer Margin | -0.103 | -0.0426 | Lower State Peer Margin decreases predicted margin |
Turnaround: 0%Low turnaround probability (0%). Structural disadvantages in Expense/Bed and Revenue/Bed.
Under-Performing / Distre
Archetype
2.2%
Distress Risk
$20.5M
RCM Opportunity
D
Opportunity Grade
-48.2%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P67. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PARKLAND HLTH CTR - BONNE TERRE | MO | 3 |
| LAGUNA HONDA HOSPITAL | CA | 6 |
| WENATCHEE VALLEY HOSPITAL | WA | 11 |
| MERCY WALWORTH HOSPITAL | WI | 25 |
| DANA-FARBER CANCER INSTITUTE | MA | 30 |
Distress Analysis
Risk: Low
National distress rate: 49.3%
WA distress rate: 67.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 58577263.850 | -3.365 | ▼ risk |
| Occupancy Rate | 0.935 | -0.381 | ▼ risk |
| Medicaid Day Pct | 0.030 | -0.059 | ▼ risk |
| Net To Gross Ratio | 0.500 | +0.059 | ▲ risk |
| Medicare Day Pct | 0.225 | -0.018 | ▼ risk |
| Beds | 20.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $20.5M
Current margin: -50.0%
Projected margin: -48.2%
Grade: D
Comps: 42
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 | 0.500 | 0.650 | 15.0% | $20.5M | 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 | 32.2 | [25.0, 75.0] | P71 | 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 | 99.1% | [90.0%, 99.5%] | P4 | Strong — predicted net collection rate is in the top third. |