Health

Five ideas for Encompass Health’s growth strategy

Encompass Health is one of the largest owners and providers of inpatient rehabilitation hospitals and home health services in the United States, and the number is growing.

The Birmingham, Alabama-based company is growing through acquisitions, organic growth, and geographic expansion. Encompass Health currently operates 140 hospitals, 250 home health services and 94 hospices in 42 states and Puerto Rico.

According to the census, by 2030, one in five US residents will be 65 or older. “Encompass Health is positioning itself to serve this aging population,” said Mark Tarr, CEO and president of the company.

  1. Focus on specialized areas. According to Jordan Shields, partner at Juniper Advisory, the healthcare system’s greatest strength lies in its highly effective rehabilitation business. According to him, inpatient rehabilitation has become the engine that has allowed Encompass Health to become a leader in its market segment and increase its revenues. The company made it onto last year’s list of Best Places to Work in Modern Healthcare.
  2. Build more inpatient rehab hospitals. Encompass Health is opening eight new inpatient rehabilitation hospitals this year and plans to open 13 more next year. The company plans to open at least six to 10 hospitals a year, Tarr said. “We want to make sure we have the capacity, scope and scale to care for these patients who need our services,” he said.
  3. Create joint ventures. Last month, Encompass Health and Altru Health System announced a partnership under which Encompass will acquire the existing Altru inpatient rehabilitation facility. Partnerships, typically with health systems that need to strengthen their acute attack rehabilitation services, have been a key part of Encompass Health’s business model for over 30 years, Tarr said. “Integration can be extremely challenging due to organizational strategy issues, high salaries and big egos,” said Adam Block, founder and director of Charm Economics. Both partners need to address questions about who is in leadership roles, how they combine operations, how best to share savings, and what are the best practices for referring patients between points of care, he said.
  4. Maintain good relationships with referral partners. Encompass Health contacts hospital patients when they are ready to be discharged, and then monitors them to refer them to home health resources, Shields said. “They have a good reputation in the industry in terms of admitting patients and preventing re-hospitalization,” he said.
  5. We provide quality services. Many of Encompass Health’s hospitals have technology and clinical programs to treat patients with stroke, brain and spinal cord injuries and other medical conditions, Tarr said. “The ultimate goal is to get [patients] have returned home to their community and are functioning at a much higher level than when they first came to our hospital, ”said Tarr.

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