Select Medical Holdings Reports Strong Results and Outlook

- A significant trend in medical imaging is the shift of services from large hospitals to outpatient settings, including freestanding imaging centers and mobile units. Outpatient imaging growth is now outpacing the overall radiology market, with approximately 40% of all radiology volume being performed in these settings. This shift is driven by advancements in technology and the demand for more convenient, cost-effective care. - The mobile imaging services market is projected to grow, with one forecast predicting a rise from $2.16 billion in 2025 to $2.79 billion by 2033. Another forecast expects the market to grow from $17.31 billion in 2026 to $21.13 billion by 2031. This growth is fueled by an aging population, the increasing prevalence of chronic diseases, and the demand for convenient healthcare solutions. - Consolidation is a key trend in the outpatient imaging sector, with an increase in joint ventures between health systems and large imaging center operators. From 2014 to 2023, there was a 348.5% increase in radiology practices with 100 or more radiologists, while smaller practices saw a decline. This trend is driven by reimbursement pressures and the desire to gain operational efficiencies. - For 2026, the Centers for Medicare & Medicaid Services (CMS) has finalized a 2.6% increase in Hospital Outpatient Prospective Payment System (HOPPS) payment rates. However, the overall 2025 Medicare Physician Fee Schedule (MPFS) includes a reduction in the conversion factor, which is expected to negatively impact reimbursement for many imaging procedures. - Artificial intelligence is rapidly being integrated into radiology, with the FDA having cleared hundreds of AI-enabled tools for medical imaging. These tools assist with image interpretation, workflow triage, and automating reports. Leading vendors in this space include GE Healthcare, Siemens Healthineers, and Philips. - Radiology practices are facing significant workforce shortages, particularly for radiologists and technologists, at a time when imaging volumes are increasing. This is leading health systems to explore different staffing models and radiology groups to negotiate for subsidies to cover the rising costs of labor. - In its 2025 Form 10-K report, Select Medical detailed revenue of $5.45 billion, with its outpatient rehabilitation segment being a key driver of growth. The company's growth strategy includes opening new outpatient clinics and pursuing joint ventures with large health systems to leverage existing referral relationships.