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Encompass Health Corporation EHC recently formed a joint venture (JV) with North Dakota-based Altru Health System. Via the JV, the company will own and manage Altru’s inpatient rehabilitation unit equipped with 23 beds.
As a result of the JV, the inpatient rehabilitation unit will undergo name change to Altru Rehabilitation Hospital. Both the healthcare providers will be working closely to remodel and increase the unit’s capacity of private patient rooms to 40. The renovation is expected to conclude in summer 2022 post which the JV will come into effect.
Further, the unit will commence offering in-house dialysis services and advanced rehabilitation technologies. Besides, the hospital will continue to provide stroke rehabilitation, acute neurologic and traumatic brain injury rehabilitation care.
Moreover, the latest move marks Encompass Health’s foray into North Dakota. Notably, Altru seems to be the apt partner for complementing Encompass Health’s efforts since the former has been providing extensive inpatient rehabilitation services across North Dakota for more than six decades.
Time and again, Encompass Health has entered into numerous JVs for boosting its capabilities and extending nationwide footprint. Prior to the recent move, the healthcare provider formed JV with Piedmont Healthcare for managing three inpatient rehabilitation hospitals across Georgia. Some other notable JVs in the past include those with UnityPoint Health - Trinity and BJC HealthCare.
Furthermore, the company remains focused on expansion plans, as evident from constant additions of inpatient rehabilitation hospitals to its network. The most recent addition of Encompass Health Rehabilitation Hospital of Cumming took the company’s nationwide inpatient rehabilitation hospital count to 140. Besides, it boasts of a portfolio of 250 home health hubs and 94 hospice centers across 42 U.S. states and Puerto Rico.
Growing demand for inpatient rehabilitation services across the United States highlights promising growth prospects for the Inpatient Rehabilitation segment of Encompass Health. The segment has been performing well for quite some time, and usually contributes a significant portion to the company’s top-line growth. The first-quarter 2021 was no exception to the trend, wherein the segment contributed 78% to the company’s net operating revenues.
Zacks Rank & Price Performance
Shares of this Zacks Rank #3 (Hold) healthcare provider have gained 25.6% in a year compared with the industry’s growth of 7.9%.
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Stocks to Consider
Some better-ranked stocks in the medical space are Select Medical Holdings Corporation SEM, Magellan Health, Inc. MGLN and Hanger, Inc. HNGR, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Select Medical, Magellan Health and Hanger have a trailing four-quarter earnings surprise of 245.91%, 69.63% and 255.00%, on average, respectively.
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