DaVita (DVA) Barclays 27th Annual Global Healthcare Conference summary

Volume and treatment growth outlook

• Guidance for 2024 is flat treatment growth, reflecting caution after missing prior forecasts; small changes in admissions and mortality drive volatility.

• Volumes are expected to recover over time, but no specific timeline is provided; 3-7% operating income growth is still targeted even without volume growth.

• Clinic closures complicate patient retention and admissions, but their impact is hard to quantify over time.

Financial performance and reimbursement dynamics

• Revenue per treatment (RPT) is tracking at about 3% growth, while cost per treatment is up 4%, mainly due to persistent labor and inflation pressures.

• RPT growth is driven by rate increases, mix, and some annualized benefits from revenue operations, but further gains from these initiatives are expected to be limited.

• Commercial mix remains around 11% and is expected to grow slightly in 2025, supported by exchange enrollment.

Policy and regulatory changes

• Oral phosphate binders are transitioning to TDAPA reimbursement, with a $0-$50 million benefit expected in the first year; key variables include patient volume, drug mix, and implementation costs.

• The mix is mostly generic, but branded drug choices by physicians could significantly affect margins.

• The operational transition is described as smooth, similar to prior drug transitions.