ML Analysis — WENATCHEE VALLEY HOSPITAL
CCN 500148 | 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.
65
/ 100 (B)
Financial Health12/25
RCM Upside21/25
Market Position13/20
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
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
48.8%
R²=0.34 | n=4,907 | Grade B | Actual: -4.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [20.5%, 77.1%]. P100 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 25229964.909 | +3.3014 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 26462360.545 | -3.0558 | Higher Expense/Bed decreases predicted margin | |
| Bed Utilization Value | 11970879.988 | +0.3681 | Higher Bed Utilization Value increases predicted m | |
| Log(Beds) | 2.398 | -0.0459 | Lower Log(Beds) decreases predicted margin | |
| State Peer Margin | -0.103 | -0.0426 | Lower State Peer Margin decreases predicted margin |
Turnaround: 97%Model predicts 97% probability of positive margin. Key drivers: Revenue/Bed and Expense/Bed.
Under-Performing / Distre
Archetype
20.7%
Distress Risk
$5.9M
RCM Opportunity
D
Opportunity Grade
-2.8%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P33. 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 |
| MERCY WALWORTH HOSPITAL | WI | 25 |
| FRED HUTCHINSON CANCER CENTER | WA | 20 |
| DANA-FARBER CANCER INSTITUTE | MA | 30 |
Distress Analysis
Risk: Moderate
National distress rate: 49.3%
WA distress rate: 67.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 25229964.909 | -1.396 | ▼ risk |
| Occupancy Rate | 0.474 | +0.047 | ▲ risk |
| Net To Gross Ratio | 0.448 | +0.035 | ▲ risk |
| Medicare Day Pct | 0.467 | +0.024 | ▲ risk |
| Beds | 11.000 | -0.018 | ▼ risk |
| Medicaid Day Pct | 0.081 | -0.008 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.9M
Current margin: -4.9%
Projected margin: -2.8%
Grade: D
Comps: 14
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 | 0.448 | 0.610 | 16.2% | $5.3M | 65% | 18mo |
| Payer Mix Optimization | 0.452 | 0.494 | 4.2% | $635K | 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 | 32.6 | [25.0, 75.0] | P72 | 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%] | P7 | Strong — predicted net collection rate is in the top third. |