Hospice has become a cornerstone of growth for Dallas-headquartered Enhabit Inc. (NYSE: EHAB) as the company enters a new era of leadership.
Hospice is an under-valued service that is gaining momentum in terms of positive quality impacts and clinical innovation, Enhabit CEO Barb Jacobsmeyer said at the Jefferies Healthcare Services Conference.
Enhabit’s hospice growth has only just begun to churn since its spinoff from Encompass Health (NYSE: EHC) in 2022, Jacobsmeyer indicated. The company has made significant investments in its clinical and business development teams in order to expand and improve its hospice service reach, she stated. These investments are anticipated to pay off in more ways than one.
“Hospice [is] under-appreciated in the sum of our parts,” Jacobsmeyer said during the conference. “People still think of hospice as it was when we spun [off] and not the value that hospice is today. I don’t think there’s enough emphasis put on the sum of the parts for the company.”
Enhabit operates 114 hospice and 249 home health locations across 34 states. Enhabit’s overall net revenue across its home health and hospice services reached $266.1 million in the second quarter.
Jacobsmeyer recently announced her departure from Enhabit in August after serving at its helm since 2021. She anticipates a strong strategic direction for the company on the horizon.
“To me, what’s exciting for the next leader is that Enhabit is in a wonderful place,” Jacobsmeyer said. “We are in a place to differentiate, looking at some of the technology and innovation and really differentiating ourselves from a clinical experience. Because if we can pull more clinicians, we’re going to pull more market share. There’s a lot of opportunity for Enhabit as we look to the future.”
Enhabit recently reported that as of Q2 its hospice segment revenue reached $119.5 million year-to-date in 2025, a rise compared to $99.6 million the same time frame last year.
The company’s hospice program saw its sixth consecutive period of growth in Q2 this year, with an average daily census that saw a 12.3% year-over-year increase.
Enhabit’s hospice growth has largely been rooted in its de novo strategy. The company has opened one new location so far in 2025, with 13 more in the works, Jacobsmeyer previously indicated in a recent earnings call. Enhabit opened five new hospice operations in 2024, building on seven that were established during 2022 and 2023.
“We’ve been on a journey,” said Jacobsmeyer. “The biggest thing we had to focus on initially was making sure we had the right care management plan in place on how we structured our care team. We heard loud and clear when I first joined the company that we ran hospice like home health. We had very high turnover on our hospice [program]. We spent about a year investing in a new care team [and] really eliminating all capacity constraints. We built out a team of business development folks [who] really came with experience on how to diversify referral sources. Those things collectively have driven the results we’ve seen over the last 18 months.”
The company’s hospice growth trajectory will be impacted by a multitude of factors, including reimbursement trends in home health and investments in technology innovations, said Ryan Solomon, CFO of Enhabit.
The U.S. Centers for Medicare & Medicaid Services (CMS) recently proposed a 6.4% cut to home health reimbursement rates in 2026. If approved, the reduction could result in an estimated $30 to $45 million financial headwind for Enhabit’s home health segment, as well as potential hospice impacts, Solomon indicated. While no “silver bullet” exists in terms of a singular strategy to offset the impacts, the company is focusing on ways to create “meaningful value” across its service lines, he said during the conference.
Among Enhabit’s strategic moves will be technology investments designed to improve operational efficiency and foster “substantial growth” of its hospice and home health programs, Solomon indicated.
“Technology is an area that [is] relative to strategic and investments,” Solomon said during the Jefferies conference. “There’s a lot of areas that could be quite interesting and that would require some investment both in capital deployment and also in change management across the organization. Technology and what we’re seeing there actually is something that we feel like Enhabit can [leverage to] create a differentiated outcome for our patients, but then also a real talent acquisition tool as we think about making the clinicians’ day-to-day life a bit easier in documentation or within the home.”
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