Encompass Health (EHC) Barclays 27th Annual Global Healthcare Conference summary

Growth and operational performance

• Achieved 6% same-store discharge growth over the past two years, with at least 4% from existing capacity, bed additions, and maturing de novos.

• Opened about eight new de novo facilities annually, contributing to overall growth and supporting multi-year CAGR targets of 6-8%.

• Increased initial bed count for new facilities from 40 to 50 to achieve higher occupancy faster and offset rising construction costs.

• Facilities are designed for future bed expansions, leveraging existing infrastructure for high returns.

Market strategy and clinical differentiation

• Focus on specialized inpatient rehabilitative care, with deep expertise in stroke and neurological conditions, comprising nearly 60% of patients.

• Clinical programs emphasize strong patient outcomes, such as 84% of patients returning home at discharge and low acute care readmission rates.

• Data-driven approach in discussions with referral sources and managed care companies to highlight superior outcomes.

Labor and cost management

• Salaries, wages, and benefits per FTE expected to rise 3.5% in 2025, down from 2024, due to reduced premium labor and stable contract labor usage.

• Proactive wage adjustments have improved retention and reduced turnover, especially among nurses.

• Group medical costs rose 12.4% in 2024, driven by high-dollar claims and increased prescription drug utilization, especially GLP-1s.