Author Topic: DVA – DaVita HealthCare Partners  (Read 215688 times)

dwy000

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Re: DVA – DaVita HealthCare Partners
« Reply #510 on: August 30, 2018, 06:57:00 AM »
This is not good for the California treasury.  If the rates are capped theres no reason for the assistance programs to exist and those patients will move into the government payroll (medicaid).  If the rates paid by Medicaid dont improve it could jeopardize clinics and send patients to emergency rooms - which will cost even more.

From a financial perspective you would think the government would be more inclined to set up their own insurance  assistance program to keep as many patients off Medicaid as possible.  Much cheaper for taxpayers (that was tongue in cheek as well) 


mwtorock

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Re: DVA – DaVita HealthCare Partners
« Reply #511 on: August 30, 2018, 07:42:13 AM »
This is not good for the California treasury.  If the rates are capped theres no reason for the assistance programs to exist and those patients will move into the government payroll (medicaid).  If the rates paid by Medicaid dont improve it could jeopardize clinics and send patients to emergency rooms - which will cost even more.

From a financial perspective you would think the government would be more inclined to set up their own insurance  assistance program to keep as many patients off Medicaid as possible.  Much cheaper for taxpayers (that was tongue in cheek as well)

however we probably should not trust government/politicians to make right choices, should we?   :P

All that said,  should it put that much a dent into the valuation of DVA long term?

walkie518

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Re: DVA – DaVita HealthCare Partners
« Reply #512 on: August 30, 2018, 07:46:12 AM »
This is not good for the California treasury.  If the rates are capped theres no reason for the assistance programs to exist and those patients will move into the government payroll (medicaid).  If the rates paid by Medicaid dont improve it could jeopardize clinics and send patients to emergency rooms - which will cost even more.

From a financial perspective you would think the government would be more inclined to set up their own insurance  assistance program to keep as many patients off Medicaid as possible.  Much cheaper for taxpayers (that was tongue in cheek as well)
I believe there must be senate approval followed by gubernatorial support for CA to enforce, but the stock appears to be moving as if this is a done deal

that said, that is one very possible outcome

another very possible outcome is that state assembly is the only approval the bill gets

for the time being, I think nothing is more likely than something...in the short-term, do politicians chose to alienate voters or donors?  considering the demographics of those impacted most, it might be a smarter move to kick the can down the road until the votes are collected?

closing clinics will be bad for patients, bad for the government, but good for the insurance companies

that said, if it doesn't go through, insurers will argue they should charge more

flesh

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Re: DVA – DaVita HealthCare Partners
« Reply #513 on: August 30, 2018, 03:10:23 PM »
Is it true the standstill period with brk doesn't end unless DVA is m & a or ownership falls below 15%?

DooDiligence

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Re: DVA – DaVita HealthCare Partners
« Reply #514 on: August 30, 2018, 08:54:43 PM »
I guess we'll see if high dollar hospital stays start jumping up.

Meanwhile, I hope Davita buys an assload of shares back.
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Spekulatius

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Re: DVA – DaVita HealthCare Partners
« Reply #515 on: August 31, 2018, 04:03:40 AM »
I guess we'll see if high dollar hospital stays start jumping up.

This would take years to work out. DVA can’t really dump existing patients. They can close down centers that are now unprofitable, but that would also hurt their LT earnings power.
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DooDiligence

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Re: DVA – DaVita HealthCare Partners
« Reply #516 on: August 31, 2018, 05:23:21 AM »
I guess we'll see if high dollar hospital stays start jumping up.

This would take years to work out. DVA can’t really dump existing patients. They can close down centers that are now unprofitable, but that would also hurt their LT earnings power.

Wasn't suggesting that (Thiry doesn't strike me as the kind of guy who would hurt people just to prove a point.)

But legally & contractually, are they obligated to continue serving patients who are not covered?
Insurance companies don't have to pay after (is it 32 months?)
Why would Davita HAVE to provide service (except out of a sense of moral obligation?)

What would be the difference between Davita providing free service or Davita contributing to premium assistance programs?
(Besides the obvious shifting of a liability from payers to Davita.)

What I am suggesting is that we should see an increase (over time) of newly diagnosed CA ESRD patients, who can't afford insurance, ending up in the hospital.
Then the liability get's shifted from payers to HOSPITALS & THEY start complaining to legislators (ad nauseam.)

Something has to give.

If not, then either the service degrades and/or, as you said, dialysis clinics start shutting down (which would exacerbate the problem.)

= edit =

and yes, it will take years to work out (which I'm OK with.)

"You pay a very high price in the market for a cheery consensus"
« Last Edit: August 31, 2018, 05:34:36 AM by DooDiligence »
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Cigarbutt

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Re: DVA – DaVita HealthCare Partners
« Reply #517 on: August 31, 2018, 06:14:06 AM »
For dialysis care, I would say that, over time, the right balance between costs, outcomes and profits should eventually trickle down to a reasonable compromise. Bumps expected along the way.

When analyzing the California legislation recent announcement, it's hard to embrace market efficiency. The motivations pushing for change is more ideological than practical and DaVita and oligopolistic brothers have shown to be very adept at this political game.


Spent some time lately on DVA and wonder about the long-term challenges that may decrease its potential for profits:
1-the definition of "reasonable" profit which will be more and more influenced by government and quasi-government agencies
2-the accountability game
3-the captured nephrologist
4-the expected growing presence of "substitutes"

1-IMO long term trends will continue to bring equity returns along the lines of utilities but the complex nature of the industry is likely to make the returns less steady. Have to decide if this is simply for the long run or for opportunistic forays through the regulatory cycle.

2-I have no problems with the tight cost structure that DVA has put in place (fewer registered nurses per business volume, occasional cockroach on the wall story) but reasonable "regulatory" questions will keep coming when comparing key results (mortality, hospitalizations) because DVA may have some explaining to do (or penalties to pay) when relative poor results may be tied to factors under their control (shorter dialysis duration, less use of cardio-protective medications, infections (significant problem in this patient population) diagnosis, prevention and effective treatment).

3-The capture in place is associated with incentives that are poorly aligned (versus patient care) and IMO this issue will become more acute from within (profession) and from the regulators and policy makers. Main problems: a) patients are directed to dialysis too early b) with bundling, expected cost containment trends and accountability issues, "costly" patients who need dialysis treatments may be pushed out of the large dialysis organizations and c) certain patients for whom dialysis is not the best option may be kept on dialysis.

4-Combined with actions taken to deal with the issues in 3-, there are areas that can be improved as substitutes to dialysis: better primary and secondary prevention care. Also (opinion: end-of-life care will change a lot and, by definition, dialysis is often a component of the end coming soon), "improved" end-of-life care may result in a significantly decreased demand for dialysis services.


All in all, DVA has achieved a scale and market share based on an aggressive cost structure that makes sense in providing an essential "public" service and IMO the recent California legislation is more noise than anything but, from a cheery consensus long term point of view, return expectations perhaps should be moderated.

https://www.ajkd.org/article/S0272-6386(16)00113-X/pdf
http://www.medpac.gov/docs/default-source/reports/mar18_medpac_ch6_sec.pdf?sfvrsn=0
https://www.ajkd.org/article/S0272-6386(17)30732-1/pdf
https://www.ajkd.org/article/S0272-6386(18)30479-7/pdf
« Last Edit: August 31, 2018, 06:19:15 AM by Cigarbutt »

Spekulatius

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Re: DVA – DaVita HealthCare Partners
« Reply #518 on: August 31, 2018, 06:44:57 AM »
I agree wholeheartedly with Cigarbutt here.

DooDilugence- DVA couldn’t dump the patients because they still would get paid the prevailing Medicaid rates. DVA accepts these rates( which barely cover costs) right now for the majority of patients, so they can’t refuse service on existing patients either, imo.
If DVA would refuse service to existing patients, and patients die because of this, the ensuring lawsuits would probably do the company in.
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DooDiligence

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Re: DVA – DaVita HealthCare Partners
« Reply #519 on: August 31, 2018, 07:06:58 AM »
I agree wholeheartedly with Cigarbutt here.

DooDilugence- DVA couldn’t dump the patients because they still would get paid the prevailing Medicaid rates. DVA accepts these rates( which barely cover costs) right now for the majority of patients, so they can’t refuse service on existing patients either, imo.
If DVA would refuse service to existing patients, and patients die because of this, the ensuring lawsuits would probably do the company in.

Davita's acceptance of Medicare's prevailing rates is a fine point which I didn't pay attention to until you pointed it out.

I also agree with Cigarbutt's insightful thoughts.

I believe the business will survive for a long time (while constantly being beaten & battered by those with opposing interests.)
A tight focus on operational excellence might minimize the ability of opponents to gain traction.
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i trumpet my ignorance

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