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Select Medical Enters Into Joint Venture With Rush University

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Zacks Equity Research
·3 min read
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Select Medical Corporation, a wholly-owned subsidiary of Select Medical Holdings Corporation SEM, has entered into a joint venture with Rush University System for Health (RUSH). Pursuant to this agreement, the company will manage operations of a critical illness recovery hospital, inpatient rehabilitation hospital and 63 physical therapy centers throughout the greater Chicago and Northwest Indiana region.

Select Medical will serve as both the majority owner and managing partner across the three post-acute care lines.

The agreement will lead to the construction of a new well-equipped 84-bed hospital at the Rush University Medical Center in West Chicago. Of the total capacity, 30 beds will be placed in the critical illness recovery unit and 54 will be dedicated to inpatient rehabilitation.

The building of the facility will be completed in 2022 and will be named Rush Specialty Hospital. Meanwhile, Select Medical will manage the existing Rush Rehabilitation unit located in the Johnston R. Bowman Health Center on the Medical Center campus.

With this joint venture, the company will be able to better serve the growing needs of the Chicago metro area and the community in Northwest Illinois.
Select Medical is one of the largest providers of post-acute care, operating 101 critical illness recovery hospitals in 28 states. It joins the list of other hospitals in the United States that suspended earnings guidance due to COVID-19-led business disruption. The company has a strategy of developing rehabilitation hospitals through joint ventures with large healthcare systems.

Post-acute care services will be even more important in a post-COVID-19 world and as a national standard-bearer of quality and safety, Select Medical is a perfect fit for provide the required care.

The company’s revenues have been increasing over the years. The metric was up 1.5% in the first six months of 2020. This growth was achieved on the back of its leadership position and its reputation as a high-quality, cost-effective healthcare provider.  which allows it to attract patients and employees, aid marketing efforts to referral sources and helps negotiate payer contracts. However, a dent in the top-line growth is anticipated due to coronavirus-induced uncertainties.

The stock has gained 13.4% in a year’s time compared with its industry’s growth of 22.25%.

Select Medical sports a Zacks Rank #1 (Strong Buy), currently. Other healthcare companies worth considering in the same space are Humana Inc. HUM, The Joint Corp. JYNT and UnitedHealth Group Inc. UNH, each stock carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings of Humana, UnitedHealth and The Joint Corp. beat estimates in the last reported quarter by 21.5%, 37.45% and 116.67%, respectively.

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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Humana Inc. (HUM) : Free Stock Analysis Report
Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report
The Joint Corp. (JYNT) : Free Stock Analysis Report
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