Encompass Health saw profits plummet by nearly 30% last year as it copes with rising labor costs and inflation that is gripping the healthcare sector, recovery providers inpatient function said Tuesday.
Net income for the Birmingham, Alabama-based company reached $365.9 million in 2022, compared with $517.2 million the year before. Revenue increased 8.3% to $4.35 billion and operating expenses increased 10.8% to $3.72 billion. Wages and salaries increased by 12.5%.
Shares closed at $58.87 on Tuesday, the lowest closing price of the year so far, but among the highest in the previous 52 weeks.
Despite a volatile year, Encompass Health ended relatively well as fourth-quarter net income rose 1.6% to $117.5 million. Quarterly revenue rose 9.1% to $1.14 billion, which the company attributed to volume growth and price increases. Encompass Health opened nine facilities with a total of 410 beds last year and added 87 beds to existing facilities. Discharged patients increased by 7.3%.
Operating expenses were 7.4% higher at $957.6 million in the fourth quarter. The company is focused on reducing contract labor costs, which hit healthcare employers hard. In the fourth quarter, Encompass Health spent $35.4 million on contract workers, down 31% year-over-year.
The provider completed a spin-off of its home health and hospice business, Enhabit Home Health Hospice, now an independently publicly traded company, in July.
Encompass Health is the company that owns and operates the largest inpatient rehabilitation hospitals in the United States, with 153 hospitals in 36 states and Puerto Rico. Executives will explain the details of the company’s financial performance during a call with investors on Wednesday.
