HealthSouth Expands Home Health and Hospice Portfolio

Inpatient rehabilitation hospitals operator HealthSouth (Birmingham, AL, USA) has signed an agreement to acquire Encompass Home Health and Hospice (EHHI; Dallas, TX, USA) for USD 750 million.

Encompass, the fifth largest provider of Medicare-focused, home health services in the United States, operates in 140 locations across 13 states, the result of a policy of continuously buying under-performing home health entities and incorporating them onto their operating platform; since 2005 the company has successfully integrated 45 separate acquisitions. HealthSouth believe that they can accelerate the pace of consolidation and continue to expand the inpatient rehabilitation portfolio, using their strong free cash flow.

The purchase will allow HealthSouth, the largest owner and operator of inpatient rehabilitation hospitals, outpatient rehabilitation satellite clinics, and home health agencies in the United States, to participate in the coming bundled payments regime planned by the Centers for Medicare and Medicaid Services (CMS), an initiative that aims to link payments for multiple services during an episode of care. HealthSouth will thus be positioned to offer both facility-based and home-based post-acute services on a comprehensive, coordinated basis.

“One of our stated strategic objectives has been to expand into home health, assuming we were able to acquire a high-quality, scalable asset that was capable of consolidating the highly fragmented home health industry,” said Jay Grinney, president of HealthSouth. “Encompass's exceptional management team, strong corporate culture, and track record of successfully providing high-quality, cost-effective home care services has positioned the company as a leader in the home health industry.”

“We are thrilled to be joining HealthSouth and are confident that our mission of delivering a better way to care for our employees, patients, referral sources and all of our stakeholders will align well with HealthSouth's mission, and allow our merged organizations to continue to provide high-quality post-acute services to the communities we are privileged to serve,” said April Anthony, CEO of Encompass.

Encompass is currently owned by private investment firm Cressey & Company (Chicago, IL, USA).

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HealthSouth
Encompass Home Health and Hospice
Cressey & Company