ML Analysis — SAGE WEST HEALTH CARE
CCN 530008 | 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.
43
/ 100 (D)
Financial Health3/25
RCM Upside18/25
Market Position14/20
Demand Defensibility9/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
- Volume growth opportunity from low occupancy
Margin Prediction (Trained Ridge Model)
-14.6%
R²=0.34 | n=4,907 | Grade B | Actual: -5.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-42.9%, 13.7%]. P28 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 513703.850 | -0.1487 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 543243.248 | +0.1372 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.087 | +0.0329 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 69703.723 | -0.0267 | Lower Bed Utilization Value decreases predicted ma | |
| Occupancy | 0.136 | -0.0221 | Lower Occupancy decreases predicted margin |
Turnaround: 26%Low turnaround probability (26%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Rural/Critical Access
Archetype
61.4%
Distress Risk
$10.9M
RCM Opportunity
A
Opportunity Grade
10.3%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P89. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
WY distress rate: 55.2%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.136 | +0.362 | ▲ risk |
| Medicaid Day Pct | 0.203 | +0.114 | ▲ risk |
| Revenue Per Bed | 513703.850 | +0.063 | ▲ risk |
| Net To Gross Ratio | 0.233 | -0.061 | ▼ risk |
| Medicare Day Pct | 0.422 | +0.016 | ▲ risk |
| Beds | 133.000 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $10.9M
Current margin: -5.8%
Projected margin: 10.3%
Grade: A
Comps: 2074
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 | 0.375 | 0.757 | 38.1% | $5.7M | 50% | 24mo |
| Occupancy Improvement | 0.136 | 0.749 | 61.3% | $4.0M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.233 | 0.380 | 14.7% | $1.2M | 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 | 29.0 | [25.0, 75.0] | P50 | 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. |