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Encompass Health (EHC) Unveils Plan to Better Serve Texas

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Encompass Health Corporation EHC recently disclosed plans to construct an inpatient rehabilitation hospital in Houston, TX. The hospital will house 60 beds.

Shares of Encompass Health gained 0.7% on May 16.

The announcement of the hospital plan in Texas reflects EHC’s commitment to delivering coordinated and connected care, which in turn, is expected to result in better health outcomes in the state. The hospital, being equipped with private patient rooms, enhanced rehabilitation technologies, diversified amenities and well-versed medical teams, is likely to ease Encompass Health’s endeavor to ensure speedy recovery of patients grappling with debilitating illnesses and injuries.

Concurrently with expanding its rehabilitation services suite, the latest move is expected to boost the geographical presence of Encompass Health across Texas. The integrated healthcare services provider boasts of a robust presence in the state, evident from its 26 inpatient rehabilitation hospitals. Additionally, EHC comprises 51 home health locations and 15 hospice locations in Texas, through which it ensures to offer advanced care at home.

Apart from the recent plan to construct a hospital in Houston, Encompass Health holds promising plans (unveiled earlier) to expand its footprint in other parts of the state. While a hospital of Encompass Health is under the construction phase in Prosper, another hospital plan in Amarillo was announced last year.

Through the announcement of back-to-back facility expansion plans and subsequent inauguration of the same within the targeted time period, Encompass Health continues to provide cost-effective and high-quality rehabilitation services throughout the United States. These initiatives have empowered EHC to construct a robust healthcare portfolio encompassing 148 inpatient rehabilitation hospitals. The solid demand for advanced rehabilitation care required to aid patients in resuming their normal daily activities makes these expansion plans of Encompass Health time opportune.

EHC provides rehabilitation services through the Inpatient Rehabilitation segment, which has been contributing the most to its overall revenues. This is quite evident from the first quarter of 2022, wherein the segment accounted for 79.4% of total revenues of $1.3 billion. If the healthcare provider continues to bolster its inpatient rehabilitation hospital count with moves similar to the latest one, revenues of the Inpatient Rehabilitation segment are expected to most likely increase in the days ahead. Apart from inpatient rehabilitation hospitals, Encompass Health’s healthcare portfolio contains 252 home health hubs and 99 hospice centers stretched across 42 states and Puerto Rico.

Similar to Encompass Health, other healthcare providers like Tenet Healthcare Corporation THC, HCA Healthcare, Inc. HCA and Community Health Systems, Inc. CYH offer high-quality rehabilitation services and pursue expansion plans for capitalizing on solid demand for these services.

Tenet Healthcare operates a network of hospitals and related healthcare facilities for extending high-quality rehabilitative services and other healthcare-related services. Several acquisitions, partnerships and strategic alliances continue to boost the scale of business, operating capacity and geographical presence of THC. Tenet Healthcare boasts an expansive care network of 60 hospitals and 535 other healthcare facilities at the end of 2021.

Being one of the leading U.S. healthcare services providers, HCA Healthcare’s portfolio comprises 175 hospitals, five psychiatric hospitals and two rehabilitation hospitals at 2021-end. HCA manages 125 freestanding surgery centers and 21 freestanding endoscopy centers. HCA Healthcare continues to opt for acquisitions, which in turn, expands its portfolio, network and patient volumes.

Community Health is best known for operating general acute care hospitals and outpatient facilities across U.S. communities. At the end of 2021, CYH either owned or leased 81 general acute care hospitals and two stand-alone rehabilitation or psychiatric hospitals. Additionally, it has outpatient facilities numbering over 1,000 in place. Community Health continues to add facilities and undertake buyouts to strengthen its capabilities and nationwide network.

Zacks Rank & Price Performances

Shares of Encompass Health have rallied 3.3% in the past six months against the industry’s decline of 20.6%. EHC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Shares of Tenet Healthcare, HCA Healthcare and Community Health have lost 9.7%, 13.2% and 56.2%, respectively, in the past six months.


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