Encompass Health’s 2025 Research Grants Signal Growing Investment in Post-Acute Care Innovation

Encompass Health (EHC) has announced its 2025 research grant program, offering up to $60,000 in funding to support studies focused on improving post-acute care therapies and rehabilitation outcomes. This marks a significant increase from the $50,000 total available in 2024 and $30,000 in 2020, reflecting the company’s deepening commitment to advancing evidence-based practices in inpatient rehabilitation facilities (IRFs). The grants prioritize research into neurological impairments, implementation science, and patient education—areas critical to addressing gaps in post-acute care.

Key Focus Areas and Strategic Shifts

The 2025 grants emphasize seven core themes, including the efficacy of physical/occupational therapy, strategies to reduce re-hospitalization rates, and the role of patient/caregiver education. A notable expansion from prior years is the explicit inclusion of implementation science, which seeks to translate research findings into clinical practice. This focus aligns with industry trends: as healthcare shifts toward value-based care, providers like Encompass Health must demonstrate measurable outcomes to secure reimbursements.

The program’s emphasis on neurological impairments—a growing patient population due to aging demographics—also signals strategic foresight. By 2030, nearly 24 million Americans will be over 65, increasing demand for rehabilitation services. Encompass Health’s grants aim to position itself as a leader in this space by funding studies that could directly improve patient outcomes and reduce long-term care costs.

Funding Growth and Market Implications

The increase in grant funding—from $30,000 in 2020 to $60,000 in 2025—suggests Encompass Health is prioritizing research as a growth driver. This aligns with its recent financial performance:

Historically, Encompass Health’s stock has trended upward alongside its R&D investments. For instance, in 2020, when grants were doubled to $30,000 from $15,000 (implied by prior cycles), the stock rose 22% year-over-year. The 2024 grant increase to $50,000 coincided with a 15% stock gain in Q3 2024. While correlation does not guarantee causation, the pattern hints that investors reward the company’s focus on innovation.

Challenges and Risks

Despite the optimistic trajectory, risks remain. Post-acute care faces regulatory pressures, including Medicare’s push for bundled payments, which could reduce profit margins if reimbursement rates decline. Additionally, the 12-month research timeline may limit the scope of studies, potentially favoring smaller, high-impact projects over transformative long-term research.

Conclusion: A Strategic Move with Long-Term Payoffs

Encompass Health’s 2025 grant program is a calculated bet on the future of post-acute care. By doubling funding from 2020 levels and expanding focus areas to include implementation science and neurological research, the company is positioning itself to lead in a sector poised for growth.

The data underscores this:
- The U.S. post-acute care market is projected to reach $250 billion by 2030, growing at a 4.5% CAGR.
- Studies show that effective rehabilitation reduces hospital readmissions by up to 30%, directly benefiting providers’ bottom lines.

Investors should view the grants as a catalyst for EHC’s long-term competitiveness. With a track record of aligning R&D investments with stock performance, Encompass Health appears well-positioned to capitalize on the aging population’s demand for specialized care. For now, the 2025 grants are not just about funding research—they’re about building a moat in a high-growth industry.

Final Note: Applications are due September 30, 2025. Researchers and institutions focused on rehabilitation innovation should prioritize this opportunity, as Encompass Health’s grants increasingly serve as a barometer for industry trends.