Select Medical makes bold Memphis move with second specialty hospital—find out what’s changing!

Select Medical Holdings Corporation has announced plans to acquire the assets of Baptist Memorial Restorative Care Hospital in Memphis, Tennessee, in a move that strengthens its critical illness recovery portfolio and doubles its footprint in the city’s long-term acute care market. The deal, which is expected to close in the third quarter of 2025, will see Select Medical rebrand the facility as Select Specialty Hospital – Memphis East. Financial terms were not disclosed.

Located within Baptist Memorial Hospital-Memphis, the 30-bed facility specializes in critical illness recovery, offering long-term acute care for patients with complex medical conditions requiring extended hospitalization beyond standard ICU care. Upon completion, the acquisition will mark Select Medical’s second critical illness recovery hospital in Memphis, joining its broader regional network of six outpatient rehabilitation centers operating under the Select Physical Therapy brand.

What does this acquisition mean for long-term acute care in Memphis?

By acquiring the assets of the Baptist Memorial Restorative Care Hospital, Select Medical is strategically expanding its presence in a region with rising demand for extended critical care services. According to Select Medical president Tom Mullin, the Memphis market has demonstrated increasing need for post-acute services, particularly for patients recovering from serious illnesses or injuries who require specialized care beyond short-term hospital stays.

Mullin noted that the addition of the Memphis East facility reflects the company’s ongoing strategy to meet those needs by enhancing its regional care infrastructure and tapping into an established care system. He underscored that Select Medical will bring its national expertise and operational efficiencies to the facility while continuing the legacy of patient care built by Baptist Memorial Health Care.

Executives at Baptist Memorial Health Care also acknowledged the alignment, with executive vice president Chris Anderson highlighting Select Medical’s proven success operating similar facilities and its potential to further elevate standards of care. Anderson emphasized that the transition will support continuity while providing access to broader rehabilitation and care resources within Select Medical’s network.

How does this deal position Select Medical within the evolving healthcare landscape?

Select Medical’s expansion comes amid broader national trends reshaping post-acute care delivery. With a growing aging population and the lingering impacts of complex conditions such as long COVID and multi-organ recovery, demand for long-term acute care hospitals (LTACHs) is rising. Industry experts point out that LTACHs like the one being acquired in Memphis play a vital role in the care continuum, bridging the gap between intensive care and full recovery—especially for ventilator-dependent patients, those with infectious diseases, or individuals recovering from stroke or surgery.

This acquisition reinforces Select Medical’s long-standing leadership in this segment. As of March 31, 2025, the company operated 104 critical illness recovery hospitals in 29 states, alongside 35 rehabilitation hospitals in 14 states and over 1,900 outpatient rehabilitation clinics. Its operations span 41 states and the District of Columbia, making it one of the largest post-acute care providers in the U.S.

The Memphis deal also fits into Select Medical’s strategic approach of scaling in urban centers with existing infrastructure and strong referral networks. In this case, the Baptist Memorial Hospital-Memphis location offers built-in patient flows, while the integration of the acquired facility into Select Medical’s operational model is expected to generate cost synergies and improve quality outcomes.

What is the significance of Baptist Memorial’s divestiture?

The decision to transfer the assets of the Restorative Care Hospital also reflects Baptist Memorial Health Care’s continued focus on streamlining its operations and building partnerships with national leaders in specialty care. The Memphis-based nonprofit health system is one of the largest in the southeastern U.S., with 24 affiliate hospitals across West Tennessee, North and Central Mississippi, and East Arkansas. It serves more than 22,000 employees and operates a wide range of services, including a freestanding emergency department, urgent care clinics, a cancer center, psychiatric care, and academic institutions.

Baptist Memorial’s contributions to community health are substantial—it reported over $465 million in community benefit and uncompensated care in FY 2023 alone. In this context, the divestiture to Select Medical is positioned not as a retreat, but as a way to align critical care with a specialized provider while preserving continuity for patients and clinicians.

Sentiment and outlook for Select Medical Holdings Corporation (NYSE: SEM)

Select Medical’s stock performance has remained relatively stable amid industry-wide volatility in healthcare equities, with analysts pointing to the company’s diversified care model and strong footprint across LTACHs, rehabilitation, and outpatient segments as key strengths. As of the last trading update, the stock was rated a “Buy” by several analysts, citing its efficient capital deployment and disciplined acquisition strategy as growth drivers.

Institutional flows into the stock have remained moderate, with recent activity concentrated around index rebalancing and long-term portfolio positioning by healthcare-focused funds. Select Medical continues to benefit from demographic tailwinds and policy support for integrated post-acute care, and its latest move in Memphis is seen as part of a longer-term regional consolidation strategy.

Given its stable margins, facility expansion, and adaptability to changing reimbursement dynamics, Select Medical appears well-positioned for continued growth. The Memphis acquisition aligns with its broader playbook of entering markets with established infrastructure and scaling operations in partnership with major nonprofit systems.

What happens next for patients and clinicians in Memphis?

Once the acquisition is complete and the hospital reopens as Select Specialty Hospital – Memphis East, patients can expect continuity of services with enhancements in clinical support, technology integration, and access to Select Medical’s national clinical best practices. The facility is expected to maintain its 30-bed capacity initially, with potential for future expansion based on patient volumes and regional demand.

For Baptist Memorial Health Care, the transition represents a deepening of its partnerships across the care spectrum, ensuring that its patients continue to receive highly specialized care while the organization focuses on its core operations and strategic goals. Staff members at the Restorative Care Hospital are expected to be retained under Select Medical’s operational model, minimizing disruption and preserving institutional knowledge.

As the U.S. healthcare industry continues to shift toward specialized and integrated models of care, acquisitions like this one serve as indicators of where patient recovery pathways are heading—and how large systems like Select Medical are positioning themselves to serve that future.