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Encompass Health is expecting home healthcare and hospice census to return to pre-pandemic levels by the second half of the year. CEO Mark Tarr made the prediction Tuesday during a Bank of America virtual healthcare conference.

Tarr said there is pent-up demand for elective surgeries, such as joint replacements, among younger patients, and demand for similar surgeries will return later for older patients. He also forecast demand for skilled nursing facilities and assisted living facilities could return in the latter half of the year or early next year.

Mark Tarr, Encompass Health

“There is starting to be some anecdotal comments coming back from some of the providers that they are starting to see their populations come back after a real low point during the pandemic,” Tarr said.

Birmingham, AL-based Encompass Health operates rehabilitation hospitals, along with home healthcare and hospice businesses in 39 states and Puerto Rico.

The company announced last December a strategic review of its home health and hospice units. During a recent call with analysts, Tarr said a possible spin-off, merger or outright sale of those businesses is possible.

Despite that, Encompass is still looking for acquisitions in home health care. Late last month, the company announced the acquisition of Frontier Home Health and Hospice, which has operations in five western states.

Encompass Health CFO Douglas Coltharp said consolidation in home healthcare “needs to happen” because the industry is so fragmented.

“We still have something like 11,000 home health agencies in the U.S, and the overwhelming majority — over 90% — have less than $5 million in revenues. It’s just very difficult for those entities to continue to compete,” Coltharp said.

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