Author Topic: DVA – DaVita HealthCare Partners  (Read 216021 times)

sleepydragon

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Re: DVA – DaVita HealthCare Partners
« Reply #490 on: May 12, 2018, 06:10:58 AM »
Seems from this filing that Berkshire is up to 22.1% of Davita.  I haven't checked if the share count is the same and this is solely the result of DVA share repurchase activity.  Reuters reports that BRK last reported a 20.2% stake in DVA on  8/11/2017.

https://www.sec.gov/Archives/edgar/data/927066/000119312518161063/d585955dsc13da.htm

***  well now I did check and the 2% increase in ownership percentage is solely resulting from DVA's share repurchases ***

I think Berkshire signed an agreement with DVA of not buying more stocks


gfp

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Re: DVA – DaVita HealthCare Partners
« Reply #491 on: May 12, 2018, 06:32:02 AM »
They have an agreement in place to not go over 25%.  This looks like it will be ultimately breached through share repurchase activity, but I'm sure they will work something out.  They don't seem too concerned with Berkshire as a large shareholder.  Most of the side letter agreements are really to protect Ted and Berkshire from a Sokol-like trading situation.  Basically, Ted can't buy or sell personal shares (he owns 1.4% of the company personally), without Warren's prior consent.

NBL0303

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Re: DVA – DaVita HealthCare Partners
« Reply #492 on: May 12, 2018, 07:21:10 AM »
They have an agreement in place to not go over 25%.  This looks like it will be ultimately breached through share repurchase activity, but I'm sure they will work something out.  They don't seem too concerned with Berkshire as a large shareholder.  Most of the side letter agreements are really to protect Ted and Berkshire from a Sokol-like trading situation.  Basically, Ted can't buy or sell personal shares (he owns 1.4% of the company personally), without Warren's prior consent.

The Standstill Agreement, I believe, prevents them from purchasing shares to cross that threshold, I do not believe it prevents them from holding shares over that threshold, when the threshold was crossed via repurchases. 

I agree with you that is the purpose for many side letter type arrangements but I don't think that is the case with this one - there were some pretty unique things going on with Davita at that time and Berkshire was trying to accommodate them with this.

ValueMaven

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Re: DVA – DaVita HealthCare Partners
« Reply #493 on: May 12, 2018, 11:21:52 AM »
still - I think this would be a great company inside the Berkshire family...

Spekulatius

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Re: DVA – DaVita HealthCare Partners
« Reply #494 on: May 12, 2018, 11:53:23 AM »
still - I think this would be a great company inside the Berkshire family...

I don’t think Thierry is ready to tap dance to Warren’s tune.
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ValueMaven

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Re: DVA – DaVita HealthCare Partners
« Reply #495 on: June 15, 2018, 07:16:07 AM »
I am a huge fan of Thierry right now...he gets that the street wants him to focus on its core business...buyback stock, and stay out of the headlines.  Earnings yield on this is still so cheap.  We just need the Optum deal to finally close, and the stock would ripe $15 - $20 points in no time. 

DooDiligence

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Re: DVA – DaVita HealthCare Partners
« Reply #496 on: July 07, 2018, 08:35:25 AM »
"Two California families awarded $253 million in lawsuit against dialysis corporation",

https://www.fresnobee.com/news/local/article214205774.html

---

This seems excessive.
Do punitive damages often get reduced or eliminated?

---
edit
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More background,

https://www.denverpost.com/2018/06/30/verdict-davita-testimony-wrongful-deaths/
« Last Edit: July 07, 2018, 08:37:08 AM by DooDiligence »
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Cigarbutt

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Re: DVA – DaVita HealthCare Partners
« Reply #497 on: July 07, 2018, 03:19:38 PM »
"Two California families awarded $253 million in lawsuit against dialysis corporation",

https://www.fresnobee.com/news/local/article214205774.html

This seems excessive.
Do punitive damages often get reduced or eliminated?

More background,

https://www.denverpost.com/2018/06/30/verdict-davita-testimony-wrongful-deaths/

The idea here is to try to discount the cost of doing business.
Punitive damage awards are hard to predict and can be substantial.

There are valid arguments in favor of punitive damages but a point can be made that amounts awarded sometimes seem excessive and have not been clearly shown to meet the underlying objectives. Especially true with the blockbuster punitive damages. Reform may be on the way. Something to consider is that, as I think that more dialysis and other comparable care will get covered by Medicare and "public" funds, capping damages "rules" may become more stringent. The large amounts are typically awarded by juries and one has to wonder if emotion plays over reason. What about the mindset of the typical jury starting his/her day reading the following article:
https://nypost.com/2018/06/29/hospital-charges-18000-to-treat-baby-with-a-bottle-and-a-nap/
I wonder if one's judgement is not clouded then when comparing the large corporatiion to the beloved guy who worked hard all his life and used to impersonate Santa Claus.

Concerning the merits of the cases, which may be irrelevant to this Board, the use of GranuFlo gives rises to potential questions. The defense side and expert witnesses used a shrewd strategy (and this is not pseudo-science or esoterics) and DaVita's "exposure" is significant as the ESRD population is at high risk of complications and mortality and dialysis is a high-risk procedure. The defense has to put together a reasonable thesis suggesting a link and reinforcing the potential bias described above. Don't get me wrong as I think that the business model has significant advantages and the results they report based on the CMS guidelines in terms of outcomes are relatively good but to reach financial target returns, DVA has to focus on costs and when drawing the line in some areas, this may be clearly be perceived as putting the safety of patients at risk. Historically, if you look at the regulatory legal profile (where most of the litigation risk lies IMO), DVA has been stretching the limits and the perception may be that the profit motive, at a certain point, may be detrimental to clinical results.

Having discussed the above, blockbuster awards at first instance courts are typically appealed. Then you get re-trials, punitive damages are reduced or eliminated on appeal or, very often, "settlements" are reached. Typically settlement amounts are not disclosed but, from inference, amounts are often immaterial or a small fraction of the initial amounts mentioned in initial press releases. Hope this helps if you try to discount these "operating" costs in your valuation.

DooDiligence

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Re: DVA – DaVita HealthCare Partners
« Reply #498 on: July 07, 2018, 04:24:54 PM »
"Two California families awarded $253 million in lawsuit against dialysis corporation",

https://www.fresnobee.com/news/local/article214205774.html

This seems excessive.
Do punitive damages often get reduced or eliminated?

More background,

https://www.denverpost.com/2018/06/30/verdict-davita-testimony-wrongful-deaths/

The idea here is to try to discount the cost of doing business.
Punitive damage awards are hard to predict and can be substantial.

There are valid arguments in favor of punitive damages but a point can be made that amounts awarded sometimes seem excessive and have not been clearly shown to meet the underlying objectives. Especially true with the blockbuster punitive damages. Reform may be on the way. Something to consider is that, as I think that more dialysis and other comparable care will get covered by Medicare and "public" funds, capping damages "rules" may become more stringent. The large amounts are typically awarded by juries and one has to wonder if emotion plays over reason. What about the mindset of the typical jury starting his/her day reading the following article:
https://nypost.com/2018/06/29/hospital-charges-18000-to-treat-baby-with-a-bottle-and-a-nap/
I wonder if one's judgement is not clouded then when comparing the large corporatiion to the beloved guy who worked hard all his life and used to impersonate Santa Claus.

Concerning the merits of the cases, which may be irrelevant to this Board, the use of GranuFlo gives rises to potential questions. The defense side and expert witnesses used a shrewd strategy (and this is not pseudo-science or esoterics) and DaVita's "exposure" is significant as the ESRD population is at high risk of complications and mortality and dialysis is a high-risk procedure. The defense has to put together a reasonable thesis suggesting a link and reinforcing the potential bias described above. Don't get me wrong as I think that the business model has significant advantages and the results they report based on the CMS guidelines in terms of outcomes are relatively good but to reach financial target returns, DVA has to focus on costs and when drawing the line in some areas, this may be clearly be perceived as putting the safety of patients at risk. Historically, if you look at the regulatory legal profile (where most of the litigation risk lies IMO), DVA has been stretching the limits and the perception may be that the profit motive, at a certain point, may be detrimental to clinical results.

Having discussed the above, blockbuster awards at first instance courts are typically appealed. Then you get re-trials, punitive damages are reduced or eliminated on appeal or, very often, "settlements" are reached. Typically settlement amounts are not disclosed but, from inference, amounts are often immaterial or a small fraction of the initial amounts mentioned in initial press releases. Hope this helps if you try to discount these "operating" costs in your valuation.

Thanks
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frankhkii

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Re: DVA – DaVita HealthCare Partners
« Reply #499 on: July 09, 2018, 06:50:28 PM »