Select Medical Highlights Rehab Expansion, Insurance Costs in Q4 Earnings

Company adds 150 rehab beds in Q4, plans 399 more over 2026-2027, but higher insurance expenses impact earnings.

Published on Feb. 26, 2026

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Select Medical executives discussed ongoing expansion of the company's inpatient rehabilitation business, including 150 new beds added in Q4 2025 and plans for 399 more beds over 2026-2027. However, the company also reported higher health insurance expenses that impacted adjusted EBITDA, which declined 10% year-over-year. Select Medical provided renewed 2026 financial guidance, projecting revenue of $5.6 billion to $5.8 billion and adjusted EBITDA of $520 million to $540 million.

Why it matters

Select Medical's focus on inpatient rehabilitation expansion reflects broader industry trends, as the company aims to capitalize on growing demand for these services. However, the impact of higher insurance costs on the company's earnings highlights the financial pressures healthcare providers continue to face, underscoring the need to carefully manage costs amid changing reimbursement and utilization patterns.

The details

In Q4 2025, Select Medical added 150 rehabilitation beds through hospital openings and acquisitions, including new facilities with Baylor Scott & White Health, CoxHealth, and Banner Health. For the full year, the company added 212 rehab beds. Looking ahead, Select Medical plans to add 399 beds across 2026 and 2027, with 166 beds already added so far in 2026. The company cited several recent and planned openings, including new hospitals and expansions with health system partners. However, the company's adjusted EBITDA declined 10% in Q4 due in part to higher health insurance expenses, including elevated medical and pharmacy costs. Management said the insurance expense impacted the entire company by about $15 million in the quarter versus expectations.

  • In the fourth quarter of 2025, Select Medical added 150 rehabilitation beds.
  • For the full year 2025, Select Medical added 212 rehabilitation beds.
  • Select Medical plans to add 399 beds across 2026 and 2027, with 166 beds already added so far in 2026.

The players

Select Medical

A leading provider of specialized healthcare services in the United States, operating long-term acute care hospitals and inpatient rehabilitation facilities.

Thomas Mullin

Chief Executive Officer of Select Medical.

Baylor Scott & White Health

A large nonprofit health system in Texas that is partnering with Select Medical on a new 45-bed rehabilitation hospital.

CoxHealth

A health system in Missouri that is partnering with Select Medical on a new 63-bed rehabilitation hospital.

Banner Health

A nonprofit health system in Arizona that is partnering with Select Medical on a new 58-bed rehabilitation hospital.

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What they’re saying

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— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

What’s next

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The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.