Author Topic: DVA – DaVita HealthCare Partners  (Read 191591 times)

Spekulatius

  • Hero Member
  • *****
  • Posts: 2878
Re: DVA – DaVita HealthCare Partners
« Reply #430 on: December 22, 2017, 05:10:08 PM »
I am fairly certain that the costs would increase and potentially double, if the government would run this business.

Just out of curiosity, what about DaVita makes you think its costs would double?  Healthcare expenses across the world vs. the USA shows conclusively that one thing the government does much more inexpensively than private business is medicine, so I'm curious why you think DaVita's doesn't fit that model.

The dialysis business is unlike the drug business and has much lower margins, high capex relative to the revenue. The employees are not particularly well paid (maybe $30-35 for nurse, and $10-20 for techs). Its based on achieving high throughput and productivity. The government would not be able to hire the necessary employees at such relatively low wages and overhead cost and productivity would be way lower.

Also, the government sponsored single payer healthcare does not mean that the providers are government agencies. In Europe, most providers are not government agencies, but the rules and the framework are determined by the government . That’s a big difference. I would bet that the cost for dialysis Europe is not much different than the cost in the US (for Medicare).
To be a realist, one has to believe in miracles.


karthikpm

  • Sr. Member
  • ****
  • Posts: 296
Re: DVA – DaVita HealthCare Partners
« Reply #431 on: December 22, 2017, 05:18:48 PM »
Here is a nice comparison of costs. Little dated. I think the big difference in the US is the number of patients on dialysis and candidacy for dialysis. Patient selection in the US is lax compared to the Eurozone.

https://www.asn-online.org/policy/webdocs/asndagreimbursementdialysis.pdf

Txvestor

  • Sr. Member
  • ****
  • Posts: 305
Re: DVA – DaVita HealthCare Partners
« Reply #432 on: December 22, 2017, 06:51:54 PM »
This precisely exemplifies when people repeatedly talk about
“health care costs” in the US and “poorer outcomes”. There’s
little to no focus on such factors in the analysis. Many of these
factors would be pertinent to you if you are the patient and
the American public is sure not willing to compromise very
much on this, and the politicians have sold them on their
“Healthcare as a right”. There are many such examples in the
system.

Cigarbutt

  • Hero Member
  • *****
  • Posts: 1619
Re: DVA – DaVita HealthCare Partners
« Reply #433 on: December 22, 2017, 08:04:33 PM »
Disclosure: Have been looking at DVA for some time. Still a lot of work to do.

In terms of this specific sub-question:
@RichardGibbons,
Concerning the notion of getting your bang for the buck, most would agree that this has to be addressed on a case by case basis.
And the discussion may rapidly degenerate.
I would submit that higher costs do not automatically result in better care (and sometimes even may be correlated with poorer health outcomes).

Focus on DVA.
The article submitted by karthikpm is one of the best out there.
But comparison is frought with difficulties as 1-there are blended, direct and indirect costs, 2-the patient populations are different and 3-there are purchase power parity adjustments. Also most studies discussing the topic (cost) often have a focus on the relative (cost) advantage of PD vs HD and not on international pairing (apples to oranges).

Here are two more for those interested:
https://f1000research.com/articles/2-273/v1
see table 1
https://academic.oup.com/ndt/article/28/10/2553/1807345

The best answer about cross-country cost comparisons is I don't know. For the private/public question which is related, my impression however would go along what Spekulatius describes.
Dialysis treatment can be relatively standardized (evaluation/selection, treatment itself and routine follow-up) and is relatively less affected by factors that drive costs much higher in the healthcare system elsewhere.
The over-riding principle for DVA is that its operations can be schematically compared to a utility 1-that requires a high investment in real assets, 2-whose "reasonable" return is directly or indirectly negotiated with a third party (government) and 3-which can benefit from efficiency gains and scale (incentive to do the right thing AND make money).

I submit that this is an area where a private player can make a difference (higher quality of care and lower costs), with shareholders pocketing at least part of the difference.
With expected pressure to contain or reduce costs, the moat that DVA seems to have may become more and more valuable.
Plan to contribute more if I come up with something useful.
« Last Edit: December 23, 2017, 04:15:14 AM by Cigarbutt »

ValueMaven

  • Sr. Member
  • ****
  • Posts: 291
Re: DVA – DaVita HealthCare Partners
« Reply #434 on: December 25, 2017, 07:06:31 AM »
Awesome insight...Thanks!  One really does wonder why Berkshire hasn't acquired DaVita at this point...Thiry would fit very well into Berkshires culture

Sincerely,
ValueMaven

cubsfan

  • Hero Member
  • *****
  • Posts: 1219
Re: DVA – DaVita HealthCare Partners
« Reply #435 on: December 25, 2017, 09:33:01 AM »
Awesome insight...Thanks!  One really does wonder why Berkshire hasn't acquired DaVita at this point...Thiry would fit very well into Berkshires culture

Sincerely,
ValueMaven

Berkshire would only consider acquiring DVA if that is what Davita wanted - and it appears DVA does not want to be acquired at this point. Berkshire does not do hostile takeovers.

https://www.bizjournals.com/denver/news/2013/05/07/warren-buffetts-berkshire-hathaway.html

Under the pact, Berkshire agreed not to pursue "any business combination, merger, tender offer, exchange offer or similar transaction” involving DaVita. It also agreed not to try to place a director on DaVita’s board or to sell off large blocks of stock at one time to one buyer without DaVita’s approval.


The agreement was signed by Ted Weschler, who as a Berkshire investment manager has been buying DaVita shares, and DaVita President Javier Rodriguez.

ValueMaven

  • Sr. Member
  • ****
  • Posts: 291
Re: DVA – DaVita HealthCare Partners
« Reply #436 on: December 29, 2017, 04:46:25 AM »
I agree - but that was almost 5 years ago... a lot has changed since then!!  DVA would fit very nicely inside BRKs ownership portfolio

ValueMaven

  • Sr. Member
  • ****
  • Posts: 291
Re: DVA – DaVita HealthCare Partners
« Reply #437 on: January 03, 2018, 05:51:47 PM »
you have to wonder how aggressive mgmt is at these levels with the monster buyback...just given the stock is up 35% in a matter of 2 months

MrB

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1109
Re: DVA – DaVita HealthCare Partners
« Reply #438 on: January 04, 2018, 06:54:52 AM »
Today: DaVita (NYSE:DVA) upgraded to Buy by BofA/Merrill Lynch.

 ???

sleepydragon

  • Hero Member
  • *****
  • Posts: 652
Re: DVA – DaVita HealthCare Partners
« Reply #439 on: January 04, 2018, 06:58:26 AM »
Wolfe research also listed DVA as on their researchers' "Top 2018 idea"