Author Topic: DVA – DaVita HealthCare Partners  (Read 215958 times)

Spekulatius

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Re: DVA – DaVita HealthCare Partners
« Reply #280 on: September 27, 2017, 06:12:22 PM »
Can you two take that part of the discussion offline please?

Can you not take that part of the discussion offline please.  8)

Feelings don’t matter. My opinion that Thiry has outlived his usefulnes are based on anecotdal observations (or probably heresay) that they core value (Villages = local management, leaders walk-in the talk etc.) don’t permeate to the local level any more (if they ever have done so). His corporate Khumbaja meetings are a joke and quite honestly hard to relate too. I don’t think there is a lot of employee loyalty either.  It is true that he saved what would later become DaVita and grew it into an industry leading company, that is hard driving and cost concisous. I think management would have more credibility if they would put it just like that, without all the bravura that Thiry considers important. I think for some long term employees that have been around for a long time, it may be important still, but for new employees,it just does not ring true. Fresenius seems to do just as well without this stuff and they are better positioned, imo, because they have put their muscle behind the equipment and the consumable sides of the business as well, rather than just the service.

That said, I don’t consider DVA badly managed, but I am not sure that management has the right LT vision to really continue to grow the company and make it future proof.
« Last Edit: September 27, 2017, 06:16:01 PM by Spekulatius »
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sleepydragon

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Re: DVA – DaVita HealthCare Partners
« Reply #281 on: September 28, 2017, 06:06:17 AM »
https://www.bloomberg.com/news/articles/2017-09-28/when-warren-buffett-runs-your-pension-plan

"Take Burlington Northern Santa Fe. Before Berkshire took control, in 2010, the railroad’s pension fund held hundreds of securities and was 73 percent funded, meaning it had only 73¢ for every dollar owed to plan participants. By the end of last year the situation had changed: The plan was 9 percent overfunded. Four stocks—DaVita, VeriSign, General Motors, and Verizon Communications—accounted for more than half its assets as of Sept. 30, 2016, a Labor Department filing shows.
"

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #282 on: September 28, 2017, 09:05:52 AM »
Can you two take that part of the discussion offline please?

Can you not take that part of the discussion offline please.  8)

Feelings don’t matter. My opinion that Thiry has outlived his usefulnes are based on anecotdal observations (or probably heresay) that they core value (Villages = local management, leaders walk-in the talk etc.) don’t permeate to the local level any more (if they ever have done so). His corporate Khumbaja meetings are a joke and quite honestly hard to relate too. I don’t think there is a lot of employee loyalty either.  It is true that he saved what would later become DaVita and grew it into an industry leading company, that is hard driving and cost concisous. I think management would have more credibility if they would put it just like that, without all the bravura that Thiry considers important. I think for some long term employees that have been around for a long time, it may be important still, but for new employees,it just does not ring true. Fresenius seems to do just as well without this stuff and they are better positioned, imo, because they have put their muscle behind the equipment and the consumable sides of the business as well, rather than just the service.

That said, I don’t consider DVA badly managed, but I am not sure that management has the right LT vision to really continue to grow the company and make it future proof.
Dialysis providers have to deliver for the patient and CMS is footing the bill for the most part so you better deliver for government. That means better service delivery at lower costs and with mortality rates down and service levels up (see QIP numbers) at cost per treatment down (especially if you look at real versus nominal) it is tough to argue the providers are not earning their keep. Same goes for private where they can complain all they want, but hospitalization (largest cost for patient) is down due to better dialysis management.
DVA outscores both FSN and the rest of the industry on QIP and costs i.e. lowest cost provider, best service delivery.
Kent Thiry is who he is, but you cannot deny his track record both at his previous dialysis company, which he sold for $1.6Bn in the late 1990's and then took over a bancrupt, demoralized company and built it into arguably the best dialysis company globally. You don't like his or Wal-Mart's team and creed approach, but it works for them. Sure I also find it cultish, but maybe that is the point. Thiry's largest cost item is team mates, so in the lowest cost game you have to motivate them in some other way and he's delivered on that. In my view, Thiry for all his faults is part of the moat and when he goes I will seriously reconsider. 
As for new people not liking Davita; read reviews on places like Indeed.com 3.6 stars out of 5 from 2k reviews and then read individual accounts where you will find that Thiry is not above meeting with new recruits during their initial training, he gave the top floor (with the best views) of their HQ to the staff (canteen), etc, etc. These are things that count for a lot of paycheck.
One can take issue with the fact that his approach is not for you, but I don't think that tranlsates in people not wanting to work there. A lot of people love it and are willing to give up some of the paycheck; as mentioned Thiry's largest cost item at 40% of cost per treatment. 

P.S. DVA payments to FSN is something like 3% of DVA's operating costs. It's a business that meaninfully depresses FSN's ROE. Ultimately though, why would one want to give up investing in the lowest cost provider? 

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #283 on: October 03, 2017, 04:31:22 AM »
Section 5000 of the IRC of 1986, imposes an excise tax penalty on employers and employee organizations that contribute to nonconforming group health plans. They are taxed 25 percent of the employer's or employee organization's expenses incurred during the calendar year for each group health plan (conforming as well as nonconforming) to which they contribute. This tax penalty does not apply to Federal and other governmental employers.
The term "nonconforming group health plan" means a group health plan or LGHP that at any time during a calendar year, fails to comply with any of the following provisions of the working aged, disability, or ESRD Medicare secondary laws.

sleepydragon

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Re: DVA – DaVita HealthCare Partners
« Reply #284 on: October 03, 2017, 06:01:04 AM »
I don't think the "cult" like culture and all the company shows (I.e. CEO riding a horse) etc shall be holding against them. Look at walmart, Costco, HTC, etc.

Spekulatius

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Re: DVA – DaVita HealthCare Partners
« Reply #285 on: October 03, 2017, 04:04:03 PM »
I don't think the "cult" like culture and all the company shows (I.e. CEO riding a horse) etc shall be holding against them. Look at walmart, Costco, HTC, etc.

Corporate culture is only a positive when it permeates trough the entire company, not just a few managers. Most companies will tell you that they have a culture, but it is BS.  I think the culture of Walmart is for example is Long gone, at least the reports about female employees of my local Walmart sorting out their differences in a fistfight after work suggest so.
Costco certainly has one, as has Starbux or Company like Merck. Generally , employees will have a strong loyalty to employers that treat them well in terms of pay, benefit and perks. DVA has some of this on a management level, but I am not sure that is true on thrnvery ground level of a dialysis center - at least my small sample size suggests that it is not true everywhere. Also  anothè food for though, even if the relation AKF is not illegal and may not be that important than some of the bearish articles suggest, there is the simple fact that this somewhat sophisticated kickback schemes exists suggest to me ethics isn’t DVA’s strong suit.

That said, I do think the company provides a valuable service at a fairly low cost and they try to get it right for patients; it can’t be compared to VRX at all. I own a few shares, but just those basic observations and the scuttlebut that I am getting prevents me from buying more.
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MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #286 on: October 04, 2017, 04:21:09 AM »
I don't think the "cult" like culture and all the company shows (I.e. CEO riding a horse) etc shall be holding against them. Look at walmart, Costco, HTC, etc.
Corporate culture is only a positive when it permeates trough the entire company, not just a few managers. Most companies will tell you that they have a culture, but it is BS.  I think the culture of Walmart is for example is Long gone, at least the reports about female employees of my local Walmart sorting out their differences in a fistfight after work suggest so.
Costco certainly has one, as has Starbux or Company like Merck. Generally , employees will have a strong loyalty to employers that treat them well in terms of pay, benefit and perks. DVA has some of this on a management level, but I am not sure that is true on thrnvery ground level of a dialysis center - at least my small sample size suggests that it is not true everywhere. Also  anothè food for though, even if the relation AKF is not illegal and may not be that important than some of the bearish articles suggest, there is the simple fact that this somewhat sophisticated kickback schemes exists suggest to me ethics isn’t DVA’s strong suit.
Worthwhile reading the David Barbetta settlement to answer two questions.
1. What is the culture and how high does the rot (if any) go, especially considering that the investigative period covered 2005-2014. Hard not to end up with similar sentiments as expressed above.
2. Considering the sanctions, what does it say about the future and the moat about the company e.g. monitors embedded in the company and they have to sign off on a pretty broad range of things like deals etc (so all good now?) and also does the settlement imply some resistance to put it out of business, because it will impact Medicare and the industry's ability to take care of ESRD patients.
For anyone actually bothering to read the settlement, please tell me how Thiry managed to survive that without getting fired?

Quote from: Spekulatius
That said, I do think the company provides a valuable service at a fairly low cost and they try to get it right for patients; it can’t be compared to VRX at all. I own a few shares, but just those basic observations and the scuttlebut that I am getting prevents me from buying more.
I think generally speaking the VRX comparison is weak, but some similarity. The difference between VRX/Philidor and AKF/DVA & FMC seems essentially to be the legal cover provided by the 1997 OIG opinion and the fact that it is not a sub, but for the rest it smells the same.

Having said that the AKF issue is not as one sided as many would like to paint it. The recent (May) letter signed by 184 members of congress in support of premium assistance is a case in point.

https://www.nephrologynews.com/dialysis-providers-akf-program-benefit-hhs-requires-health-plans-accept-charity-based-premiums/

EDIT: Found the actual letter https://www.dropbox.com/s/y9hbf3qzbhe28ri/Rep.%20Cramer%20-%20Third%20Party%20Payer%20Letter.pdf?dl=0
« Last Edit: October 04, 2017, 04:27:48 AM by MrB »

cubsfan

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Re: DVA – DaVita HealthCare Partners
« Reply #287 on: October 04, 2017, 05:53:45 AM »
Mr B - thank you for contributing mightily to this DVA board. You and others are posting some great docs, like this last one.
Do you by chance have a doc discussing the David Barbetta settlement?

MrB

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Re: DVA – DaVita HealthCare Partners
« Reply #288 on: October 04, 2017, 07:32:29 AM »
Mr B - thank you for contributing mightily to this DVA board. You and others are posting some great docs, like this last one.
Do you by chance have a doc discussing the David Barbetta settlement?
You're welcome.
Not sure exactly what you're after, but this will keep you busy at least.

Light read
https://www.foley.com/files/Publication/bd469faa-7ccf-46e4-8dfd-dd908fadbf99/Presentation/PublicationAttachment/ff94190f-82ca-4baf-b165-e03e820587f2/HFRA.Lori.DaVita.1210.pdf

Not so light read
https://oig.hhs.gov/fraud/cia/agreements/Davita_Healthcare_Partners_Inc_10222014.pdf

Door stop (includes excellent center specific data from Exhibit 6 onwards)
https://www.phillipsandcohen.com/wp-content/uploads/US-Barbetta-v-DaVita-First-Amended-Complaint-Exhibits.pdf

DooDiligence

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Re: DVA – DaVita HealthCare Partners
« Reply #289 on: October 04, 2017, 11:34:55 AM »
Mr B - thank you for contributing mightily to this DVA board.

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