DVA - Earnings call transcript Q1 2019

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Operator

Good evening. My name is Darren, and I will be your conference facilitator today. At this time, I would like to welcome everyone to DaVita's First Quarter 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. you. Thank Instructions] [Operator Mr. begin. may you Gustafson,

Jim Gustafson

and the Thank you. Kidney may conference the our our Officer. quarter Investor everyone I'm room in are Kent Joel that and Please We appreciate welcome Ackerman, DaVita during Thiry, Relations, Rodriguez, of call. President in Gustafson, to me your today securities make Hilger, within Jim Jim federal this the first Vice Darren with CEO Javier continued company. CEO; and of our we forward-looking note meaning statements our of call CFO; Care; laws. Chief interest Accounting

All statements. of differ statements subject to in materially could that unknown to known described these and uncertainties risks results are the from looking actual forward cause those and the

and our most Quarterly Annual XX-K details refer press Report XX-Q. these please on earnings quarter Form further to recent including and first concerning our filings, Form and release risks uncertainties, Report on SEC our For

Our not available forward-looking these statements are and to and statements. no intend we update currently duty us, to undertake based upon information do

our financial submitted will website. is to Thiry, available I'll to Additionally, we call this to the Chief call the non-GAAP measures. over some comparable our of non-GAAP that Kent to our financial most the GAAP during SEC like Officer. remind A in measures release you included reconciliation we'd earnings on discuss press these measures and now turn Executive

Kent Thiry

for And you you. Thank of your in you DaVita. and to greetings thank interest all

XX% priority. hospitalization readmissions, highlights. the that's In population more of care start always are first for normal expectations. The but we on normal double about and foremost XX elaborate patient first were a Joel that already this in seen slightly ahead quarter readmit as XX-day Javier the have The given of readmissions as the our you've results patients many I'll of remain hospital is Medicare. via clinical as than we company, with and case, course rate will top

was readmit on XX.X% prior a rate are continuing much when focused care really readmit XXXX, the our discharged. improve down QX versus lower and delivering of of is number also initiatives to since launched rate care to trended so which in Our And starting significantly but pretty quarter right steadily year. patients transitions the prior we they

do taxpayers, you get If patient their get there a of and quality and just associated days savings they good the the families for impact patients; overall equates hospital. we're sense math for XX,XXX with, the on of to that alone better. for fewer Good the and the in good about two to going improvement years improvements last to system the all

year Moving at here is just XX shy this on anniversary my DaVita.

I as to told one this my really I'm think you a of years, by of which all two and been and is is of things soon there that It leaving whom recently. JR as the moved that thing with that We path I hands. turning you have day number a developments DMG will Javier There good And have over I demonstrated XXXnd markets attractive know. other reaffirm hit United. But this together. quite rest to in was It's A there more capital know turn all for DMG when to as our together fact exact of earnings guidance some some one about annual looks we're then perspective as stronger, do operating call, call really I nice the third, our fact the good guidance. we since FTC players my the year points by the the of DMG, quick a first the have United statements, even approval, one, DMG we heir three best board three positive of And practices. in things work that also the I you over contemporary had figuratively, positive. every in us Good and XX annual performance was I obtaining have and well. that strong a to quarter. feel to recent positive number was those Javier ranks number making call before along but friends apparent itself over clear has a shared was my solid the substantively. and to is It's like time the well with The according and are flash close I But path, for years, even on partners that it's process in a update. several XX it's same years. the finish all that been feeling directed say more me/us very board you that we're at both very, Vivra of were about to nice going where combine to

to JR. over Now

Javier Rodriguez

the Thank you strategic where Capital me any you to for about I and have humbled major expect serve I Kent, our That I September. reassure we opportunity am and for excited finalizing I been on my as in for plans years. I that all which XX everyone. the view direction. or giving and forward of not good CEO am to detailed do look Day the afternoon, scheduling in you at of process Markets August DaVita changes let said; company are our

me six elements So that. of let reaffirm

we core First, we're a at clinical our do. excellence of company focus on everything caring and the remain will

our Second, care. relationships strong care X,XXX provides of hospital network the a we nephrologists to help home patient of the sites between they use continuity and hospitals X,XXX as XXX of of platform programs including and over clinics for transition X.XXX of over will

improve cost. unique will DaVita that Four, to And care, be continue will plan will we analytic pursue help patient a build deserved. will we lowering integrated set data is finally, our will with to intensity the overall culture. with patient we that innovative Third, continue continue of to disciplined and robust our while care we capital. tools Fifth,

results. quarter me let transition to Now first

business operating $XXX the adjusted is to for kidney for care good start for our year, a million income First, quarter. the generating first the off

patients of to It our many kidney As crisis opioid There increase in let Is in is benefit this. gift past couple we're talked It you've of few months that experiencing to in it ago. driving volumes what contribute quarter, said; in is donors. One, the will to a those tragic they're unit there with variables increase growth about individually factors. are a first than trends non say. we slower an out growth expected growth deaths in is due yet the in crisis about difficult continued from of quantify. hard competitive opioid is the results, who we to activity. the That for seen and that have Two, happen me the transplant an call much a the disease organ the the future? seen is our the acquired

for example, operating flow half are of competitive of guidance there was pickup from we adjusted and in slowdown the our reaffirming Despite the For XXXX cash de the a back volume, novo. year. both in income a number

string in we that biggest for mentioned Regarding may year. operating income the adjusted you our one recall that the would factors calcimimetic, of be this

that generic to hard of fluid, impact. remains expect entrance making predict and as it full-year pricing will We things number financial remain the dynamic a quite

let to over it me policy. turn I few a Before make on Joe, comments

the Over secretary, priorities articulated has focus months, four few the last HHS Azar work. to department's

outcomes adoption slow given and pays availability support and of care of uptick for proposals he's and speeds, for progression to and made opportunities healthcare pays kidney industry, system the the is procedures incidence are transform broaden and comments One sickness sector. one transform the which the to with Starting vision models. about home the from and primary Overall, dialysis that of to we some the support and bold the that of value-based about the one delivery health. optimistic evolution we continuity care dialysis kidney transplantation care and his in

these have each innovative over for the these programs policies years. implemented advocated have and towards We of objectives

more specific. about the We are and eager to are philosophically aligned learn

Joe to some Now provide details additional quarter. on on to the

Joel Ackerman

you Thank Javier.

will a was Non the lab range underlying line with in to some below I quarters the sequentially in First, and US for segment. referenced; dialysis absent non future growth in expect quarter X.X%. our you in through was our up guidance, Javier components walk by was turnaround metrics X.X%, come to of X.X% Revenue quarter guidance and of acquired we our for acquired the treatment $X.XX. per

question I want did to I a about address quarter came to Advantage move mix. our Before up that Medicare last per cost treatment, on

with line MA MA industry. rest our the recent US in XXXX. with context, in most in as dialysis the XXXX, Medicare patients all XX% data of the percent of was was RDF Medicare disclosed in In for For dialysis mix the

us number MA XX% Medicare to the as QX and would we assumed stood for shift in marketplace. patients. mix MA broader you has secular XXXX, In As our the at that expect given of for industry of the grown well

higher higher benefit a benefit per We employee G&A $X.XX XXXX. partially payroll decrease was growth quarter-over-quarter per expect costs drug in market lower by before Act as the in advocacy and $X.XX treatment was and offset lab spend to down Cures higher seasonally MA taxes. this $X.XX costs continue by Patient Dialysis XXst and to driven a grow quarter-over-quarter, roughly number segment the down treatment expense. by largely costs, compensation roughly offset proportion to in century per were treatment

just details some from tailwind costs a of $XX In on Now per about calcimimetic. temporary per treatment $XX with of calcimimetic generated million. creating XXXX, about we revenue treatment quarter-over-quarter $XX over QX,

we we continue to depending calcimimetic the margin set. factors be biggest For to to to how will expect that forecast. be one the calcimimetic OI term, expect Longer XXXX, of negative in slightly rest on swing neutral our is continue reimbursement of

reminder, of higher taxes due flu days, and seasonally treatment the first to season. tends impact payroll weakest the a quarter to quarter be the of the fewer the As year

$X included from operating impairment non-cash business. we quarter fewer income result was in in internationals, dialysis $X operating days. loss million, a Moving million which a $XX the a in million quarter, excluded our adjusted loss to currency decline last approximately small but treatment approximately German of goodwill three charge of The the generated adjusted

year, full APAC our we currency the or venture. achieve For before to income any expect from internationally profitable gains losses adjusted joint continue to operating

goodwill impairment operations to the was For effective tax income charge XX.X%. from the quarter, rate continuing on our attributable excluding adjusted DaVita

tax to expect to be rate full XX.X%. XX.X% to year for DaVita to attributable adjusted continue our the We

share adjusted were $X.XX. for Our operations earnings per continuing

by quarter cash working flow to some first due normalize lab for XXXX cash that in in to continuing impacted quarters. over adversely the business on of DSOs expect by next receivable as .This QX, operations dialysis four for flow. temporary increased US days to from It increase sequentially timing capital. and couple XX factors Now days the cash was to an the of we was $XX accounts the million Operating was flow

the saw of reduction also We our impact quarter rate, and in the light timing reduction mind changes that two of timeline of in and bonus sale of operations excluding nearly continuing our payable. Keep deployment. a due from project In of signing for to treatment accounts a years. XXX-k transactions. inception eventually growth for dialysis in accrued the a proceeds million a CapEx to million capital $XXX continue of lease leased backed $XX providing was payments from contribution, a compensation is scrutinize we to a the

will be and this XXXX of in impact beyond. much So felt

on operations billion reaffirming year continuing cash guidance of operating $X.XXX the for $X.XX And adjusted our $X.XXX are income our from flow to billion guidance to billion. of $X.XX billion. We

impact guidance expected or in our built this above always, which are could swing factors, range. the although scenarios to below there up of end incorporate As is we

Now, over I'll it closing to comments. Kent turn for

Kent Thiry

why shareholders through who not Please newer people the pressure. able the not now eight that a business just to way in we going number thirty the threats single that model. that I intense space. existential thing without this to player business healthcare space. where years the that industry, It's list roughly for one the been my the shareholders. about be we've has three, of number disputable; essential an like productivity for useful, few that people a diabetes or we're back with the to of providing me particularly drug, or to one, bad. last is it's dialysis same but like our a advancing. of of stop is allow be Q&A, to is a it's news pay. debatable; impair it organize XX uncomfortable subsidize This course example the points. to and a value I it controversial. a never it's to things good to that At of system, years perhaps do to the been the either subsidy, model, dramatically good it's said not every government mean the go By an years. is we might the would hope the like cost people. the we kidney patients good are a on our the everybody threats the towards of It's a all productive bad healthcare years over over Medicare Number of is The going extreme incidence in American perspectives needs existential two, Number the derivative viability forget things after never thing for I economic in of in wearable provides sector share the new the could Who want continuous way example most is destroy It's all been plummet looking XX much the on America, presence or to in Before community there's that the benefit service Number private are XX the healthcare XX% therapy. most of that perhaps four; the segment program. stream of for

and realms, particular some those existential done fervent none we've course, there belief people leadership. been haven't able clinical of performance transparency all been and of adjust in to which Of not but in sustain feared is say anything DaVita successfully five materialized, new those those and have around outcomes. a excellent, threats what activities like they have and ride clinical never ever in our eight, always Number waves to

that periodic and rest of improved health of our ways and entire opportunities most addition, In six, industry policy care has Number productivity the chronic America the would in care care threats. envy.

very the the in federal and with extent and work to states, we government always will are concert We the some be case. close

we sometimes also be can government. value will will opportunities with For do repairs there our they where the things that alignment temporarily improve

to towards years, of seven, one model give to of The just year different can reimbursement. noteworthy. the back years integrated rate endure endure And the that inexorable five So five be. that example incremental made recent not. how five over math million relevant $XXX resiliency the had on difference versus recently it business revenue the care. entering and per significant in of normalcy prior of years flat Medicare We Cumulatively a this into Number the period levels. now quite couple is march is a essentially

fervency for of only First, support ours the degree, the from and depth chronic at and breadth high but these care not and really no policy is all-time reversing. patients patients for an of all care signs shows integrated and our both for

is So march from a policy point picking up that of speed. view

for income and earnings over years free flow points, operating all million the million just per striking. into back soon $XXX step the hypertension, dialysis convert second patients, relationship emerging take we at disease, depression a resiliency and et position with cardiovascular that also unique have a for $X to our all have if great and capabilities model And a stare is And very hopefully us that cetera, for diabetes, us of eight I business community what taxpayers And Let's cetera. our soon, quite flow finally are In that sweet from eight, and they to this however, hope unique value denominator to moved context and not spot our wave into are patients. position, our ago therefore in and patients for cash are for also a to noteworthy. these forget, combined current position and put value for were tidal and in, those sustainable things of number today its of common we've soon. to pole care significantly pole our platform, equity more free you of The the expensive needy the we invested for ability is XX we is have just accomplishments. what in of an America et because cash happen share who anxiety

within integrated our moves third Second, that increased relative consistently years. for up opportunity every our performance rise care. differentiation over last And finally, of and the XX with world

And in our are ways more by forward in Q&A. differentiated could historic we're it evermore position. that our turn please ever current so that looking investments With historic our being driven to capabilities, to market we if operator, over

Operator

from [Operator comes Bank Lynch. Merrill Instructions] of first from Our Kevin Fischbeck question America

open. is now line Your

KevinFischbeck

Great. Thanks.

see coming volumes your I then little I that revenue guess better get when better. Kent, about you about the you came in the later. think into to quarter of your I it Javier came ahead to go said Just in but number, slightly number wanted expectations just was was than in income that expectations guess, talked you talking what the Can operating bit

JoelAckerman

Sure. Hi, Kevin. It's Joel. I'll take that.

was related driven largely number by internal a Our the streets, to bit lower seasonality. I than think timing

So I say number the in drove $XX I in the in tailwind QX a thing the was QX. single think about that mentioned comment. calcimimetic. would genesis stronger calcimimetic script I biggest versus that of that's million And my

KevinFischbeck

And can neutral slightly that pace negative remind you you two-year? is that yearend thing. maybe or a the kind about that process? You of ultimately that? Is a think talked think even by becoming How slowly that to of or what us about

JoelAckerman

Yes.

buckets. think think you the have I So margin in calcimimetic to about in two

which time with million temporary tailwind ASP. probably that through many of dynamic piece. ultimately plays which But years through, as go whole that is and as will away over measured So is what we've the mid baseline last kind second the out we of that years entrance think generic where high to of XXXX, which we but called $XX digit the the to were year as start had the that's then single as not gives in plays

QX. the million continued out saw falls, possibility We ASP we generic So of of and to that headwind the disappears, tailwind there'll the tailwind tailwind will don't know reverses back QX that that that scenario availability in and the into extra will will a a QX, ASP in the in in year. rates what buy know half certainly the There's There in year. we over to what happen before $XX in while falling the that QX where a be it, don't a we of is of market continue completely was able play a rest at where half how is generic be turn the year. will in second

to think persist of with tailwind while mark. and think I in supply So single generics that high out, This it headwind mid all could and digit a XXXX, we we a could longer $XX will is into called a little half million the try the after for bit sum How the what long question up, with I potentially think ultimately and ASP. persist through could XXXX. on this happens lasts that out it what added depending in number although to back year, turn that flatten it happens

KevinFischbeck

as helpful. quarter, it, said trended? said And not I'm didn't how I then I any that's mix on Okay, the in guess, catch sure comment I if commercial that but you

KentThiry

wider and as slightly sort there's and and up range over that now was or down. what higher of the change pops in this we impact asked, nothing I number Yes. we look in The back said was general, because guidance. you our JPMorgan, quarter-over-quarter mix the slightly a were would since little But that up at mix and we step add wish

KevinFischbeck

that to I that on than are that mentioned apply your on the headwinds Is of volume a within facility, transplant the of -- think impact hear that have about to Can little for I how as volume directional pressures actually a Medicare commercial you things headwind anything you talk a mix but about mentioned they would those far that headwinds? as far comments example. some might of know mix. to you as there mix? be some you Are things things the and bit the love how as more think to about mix don't

KentThiry

Sure.

your Let question. a me and I'm stab see take answering if

a competitors some just and I quickly we at on after And we incident. the record There's performance. episodic there's competitors; mortality. transplants; wrong an that want it about about track three, acquired they're we where are JPMorgan. There's there embarrass, got and performing there's are going to First, a our had dynamic is we gave that have say, in numbers opposite so missed we've peered There that. And growth. And into number. is non direction. lot all quarters moving this Two

Sometimes that's trade-off rate to to hard the do so trying it's about, we're end the And between and sure hard number, pinpoint right what is get at make deployment. it's but to very that growth capital work we what the really all really

KevinFischbeck

Clearly, below All up your your market right. you're view, losses happening my X.X, to a novo, have about just there are in you Then numbers of that share seeing down pushed X.X, slowdown or maybe market should competitors that ramping any in which maybe have is do volume you just question. share? market because think share de been that kind said are it how a last way you guess quantify I that real was

KentThiry

mean but is share over X,XXX only over a that Yes. a what This is year. if be a I a good about It's look you quarter X% patients. year and you look difference at question. market it'd at

over again we is the look we base capital. don't If that it you FMC. take have deployment course of outperform record so at lightly in when an it's track and have But will look very a it at got growth. roughly on would you So impact powerful, you our does XXX,XXX got but to time. rather compounding But sometimes that lower of your

and scrutinizing but but on and number. nag higher these might you de of number we give returns it you that lower could look overall so to with you disciplined novo each at micro and can't sort quite of Because isolate portfolio. be the got certain And one we're so a being

Operator

Research. Our from Justin next Lake comes from Wolfe question

is line now Your open.

JustinLake

I Good guess. Thanks. afternoon late

no on on years Javier and the but exciting for congrats XX taking retirement reign Kent you congrats, and stuff. surprise, off, First

kind a you've of you the the a move step as you question for of Javier, first for to has international instance, And been running DMG. part I The capital in had, and been very much role I in and a kind here, while. Kent's of strategy feel business big Kent's kind of the dialysis like deployment take, role as

love I'd your thoughts deal kind to years looks you Kent's. of the to So that capital is? deploy hear might your given than been deployment see specifically of stock thoughts five how a have towards from this to closed, especially how three capital where different that And perspective kind on next like it's given the moving on

JavierRodriguez

articulated, as Justin, in Well, Kent together for we years. worked partnership XX

So I've on on same home got a what and like anything shelving my those opening the them. around to been the care as driving. in I that relate of to time, discipline it's the greater that likely Things than of more that's partners now capital. there's get said amount is policy idea the going execute we be that the lot waiting remark, evolution gotten where to and the I've more business different is and a said things asked needs will I be will like and look a for We've fair my we would of not I different. that's to it I've time And and going been look technology to and question think look

sharing and any market I be continue a three are don't or September. have to strong our And we more want provide have August in year we we detail capital. plan capital, around to going this to As and discipline at point. to will capital it relates very

JustinLake

me fourth versus about benefit the $XX you of Got the the and it. here? benefits then in total And calcimimetic quarter give Can quarter. you million the talked that

KentThiry

I'm Are sorry. the $XX Justin. million. total in the So, it's calcimimetic double understand question, the roughly quarter? I not I'm profit sure you saying

a with past had combined million. which million number recall we the in called it's you $XX the So headwind it $XX out

So $XX from the QX total be would calcimimetic. profit million

JustinLake

benefit not next that we about so your be will think calcimimetic potentially year, numbers? And a as it. should Got to a headwind is that year-over-year that view

KentThiry

it's the XXXX. hard don't ultimately most or whether not will I know think event it's out think call this to of We all if go XXXX away; timing. a

JustinLake

could the Is could run at there like second so you're in anything Got was of and It'd in in have back the kind question you then But half could benefit do year. million rate, the continue quarter helpful of baked for even you answer thought $XX what if in full it it. terms sounded of understand. calcimimetic the the range? moderate that terms in a in a if the with that to the guidance to share the be Kevin's you how, of it's quarter, year us

KentThiry

Yes, there we play of lot ranges scenarios forecast. are the the that through a in -- is

of gave said the think this in factor swing that single number near I we in the in the around is past, is comfortable in So term a which I through. I I'd million we've OI single be calcimimetic is articulating of biggest some our that just don't variability what flows But think it safe $XXX range the say guidance. to

JustinLake

does I think that in that start XXXX offsetting contract early of us tailwind of XXXX think point some about anything there potentially to benefit EPO there that you your of Is for we maybe offset could this you I tailwinds? if Okay. kind to obviously And and as XXXX about-- we that if anything headwinds think like to but want kind is before moderate? an the could can think that. help Anything had it's

KentThiry

Yes.

general use. pharma going and drugs applies there's It unit to a price, in the that to of unit think on So, in I it applies volume. applies lot we across number a

in as a or handle look at can this headwind specific issue. point but wouldn't as I think I it tailwind, out its just you P&L So the isolated and own don't one factor

JustinLake

benefit having numbers Got I year one these of thinking run year, first last know it. Last myself through. quarter apologize from have kind did I had could remember I sort it just for more. last as remember calcimimetic. I If of a in this not but a If some benefit sneak I from your and a benefit. year Medicare not a much correctly calcimimetic receivable year and of obviously true-up

of think that sort Is correct? ramping I it’s slowly.

KentThiry

yes. is That I believe, correct.

JustinLake

Got it.

if the year-over-year give idea the true-up. quarter year-over-year if about think calcimimetic right they quarter of excluding I first your Medicare of and and growth So us net and head of Can in two the that I like? top an what do math looked first kind you

KentThiry

So, the QX bad to year, back to last out if you'd have you take debt. went Medicare

You also one-time million take $XX called out back that to we DHS pick out then. have the up

out that up number bit. at But relative If adjusting would that you came a to this would where I calcimimetic. not be for it we looked be quarter, believe

JoelAckerman

think somewhere one year-over-year. and I day we less XXX would XXX that be math to at treatment had

JeffreyMeuler

So [Multiple million I then what back XXX out $XX calcimimetic. Speakers] for you're Is that and saying? would

KentThiry

XX can what I I get but had be remember We've think --what would in better be got would back you a there. just what that offline, What called the we and we XX at to out what look take We exactly high. number. don't we Justin, we disclosed. we high. it

JavierRodriguez

there's - worthwhile given much two different to variables of year we how but obvious $XX we've pretty on a numbers of or lot lot got a many start all time. on and them million that this here. one a gets to around when room for variables exactly people that and million are tricky of recurring, down a attention Yes. non-recurring just because I cautionary defining live move it note call. them of of start two second, stating too lots confusion the it in any too sort the levels on paying offer up One then $XX There's potential so

Operator

you. Thank

from Goldman Next in Sachs. have queue we Tanal Steve

Your line is open. now

SteveTanal

the light you Congrats more the around around first your DMG in at from guess updates processes what and de Javier the of guys. Or on just of to competitors. is Good deployment latest novo give us on Kent, and question as growth well. industry I your potential proceeds? commentary the this the DMG of that afternoon, point? just kind thought Could thoughts

KentThiry

Yes.

Xx and historical proceeds debt hasn't to stock. and So deal DMG will our to use do going X.Xx, subsequent the that to go down back range our financing The to thinking We're on that bring after us back use changed. a closes. we'll proceeds buy those leverage pay to to

changed So our nothing has thinking around there, really

SteveTanal

ones. a And that figure to just of your per round cost give able calcimimetic on couple the about houses I Perfect, think quarters? of discussion that thank out treatment, If sort sort for you to of $XX the guess would I'm last you more you. us granular development. just be

KentThiry

Yes. $XX. was, about --it bear second. It was one was with hold on, It me

SteveTanal

okay. it, Got

does maybe So I really generic here. like the sort what it is availability of changed guess seem

in treatment. sustainable? lower that broader any care per Are think we there other a was potentially talk you about patient line thinking could drivers as about Just that costs about more that should there. It considerably

KentThiry

you about calcimimetic Are the talking question? sorry. I'm

SteveTanal

am I No. sorry.

well. inside a moving to basis of as pieces other of quite costs better, Just trying the treatment bit --like some just came in patient sort a care per understand of

KentThiry

Yes.

So piece EPO. the other is

SteveTanal

EPO is better.

KentThiry

Yes.

SteveTanal

Got it.

then And just helpful. that's Okay, on one the side. maybe commercial more

mixes like little on comment you as if RPTs quarter? as the think Sounds rate just well up a just in we about bit, maybe

KentThiry

line in the headline rate on where expected with no it. Basically I we side. think there's

SteveTanal

okay. it, Got

what a laid continuation is of the out day. like at sort JPM I And suppose was

think the increase sort pretty an out. I outlier in stuff the of a network on still rates that's but playing book the decline much Just that what's and rest like there's of all

KentThiry

out. call Yes. Nothing to

SteveTanal

thanks. right, Great, one okay, just I one. all Actually last guess

on anything the step-down the $XX anything still note in there? there sounds you on with just guide comfortable of million in really just AVXXX want to minds. advocacy Are the it else but is with sort check like to or Just side your

KentThiry

relationships we to baby capital. and with and spend continue another our in is progress work Sacramento Yes. state we and our are The with short AVXXX advocacy in answer comfortable our

Operator

Whit Our next from Mayo comes UBS. from question

Your now line open. is

WhitMayo

thanks. up more dynamics the competitive Congrats one to time. both wanted follow and well-deserved. on just Maybe Kent Hey, Javier,

activity this helpful with competition Just on not on little seeing have And markets? you're competition within side? last or a any is just more. define regulatory bit new Is that to whether might be this you're you from existing competitor changes do and novo year's sniff seeing any activity de AKI view that or your reimbursement

KentThiry

Yes.

part, is On the first entrants. the it new not

We are significant any activity not there. seeing

So it existing is with the competitors.

are meaning those doctor basically not kidneys are that's familiar, come end-stage AKI, for stands concludes acute injury the they back. for that that On kidney could before people it and your a

side AKI diagnoses they there efficient change patients now there get more in was because into of wanted out are and so the adjusted there philosophy And the which hospital because to most is it's a to the and of so care, system centers that. our

through volume think think nag for it's relevant don't the gone that has I and I system factors.

WhitMayo

Okay. really terms And in in and maybe you since dosing on of last what Is call did generic or one just one any your more calcimimetic. there percent apart was this versus branded quarter surprise the on anything positively way topic? maybe up to the negatively since frame

KentThiry

on the fluid up to it to the going the dynamic as was On generic time. mix, side. would call I it And ended being it just a a surprise. and be relates mix knew We never surprise, majority of the

we're were of the of some curve and was In waves, a a reversed going already at how Joel able the particular and bit to so could pricing discount this how ventures purchase helpful that quarter, plays at it if you be we And will. drops. course it then explained through that depend out, and anytime

WhitMayo

Got it. frame-up maybe generic like to just looks additional going have into of a what you inventory opportunities? how get sense to visibility the forward way In much any

KentThiry

to system inventory. very any in how hard tell is and the of as to is available inventory who's will what to have It course the very of dynamics drive No. And going because to on been much that enter. legal then entrance --it's price

are very numbers, So in those find. just they're you as we interested hard as to are but

WhitMayo

anything Are there's from Javier you aside just think new just one just you're if perspective totally am seeing the Maybe rounds and from make therapies anything upstream talk got within practice just no, as you Yes, hearing setting? an last your the and trying one from clinical protocols nephrology since, it. to I and any directors nephrologist. change medical curious to Thanks.

JavierRodriguez

No. physicians in to There's they the have nothing are continuing prescribe past. out. call as The to

there's the right I now. new, indicates nothing that but they're studies always course, at the anything call would see looking out and in if anything that science there's to the journals Of

Operator

Next in queue we have Gary Taylor from J. P. Morgan.

GaryTaylor

Hi, guys.

Just a few quick ones.

in of just cost, that terms mentioned Joel if price think was I that our patient utilization. expenses was or EPO I wondering

JavierRodriguez

Price.

GaryTaylor

is the you XX Thank But years, if saying novo think hospital talk the our that understand and we as you. the CKD person been not do had focused cricket to comments positive, about haven't resources that I hinted ask, wanted competitor of hits well. or modest were CKD, call basically the negative, et But on de activity At not saying are you're that some cetera? time, long and on you developing a all that long to lot. expended. bit I've I comment little And competitors. resources any ESRD have volumes, cricket spend but I a see wanted at Azar market it's once that to a ESRD how time, for existing heard on see like enough new been is alluded as risk, startups you

KentThiry

Sure. Thanks for question. the

care. we said, believe to else. story competition, need it says we best. provocative And than a they're send makes with all As education want of thing and we respect so so that when we lot and to and to more when deliver modality because patient and you're in we've anyone the at that capitalized, us to a time generate make going innovating it a and And been else. platform you sharper. I'll is get disrupt relates quite prepared the types course, competition say that And getting some with paranoid we first that more innovate. patients best competitors the do you go are all self believe for is disrupting the small than to it's We we approach we that of That are sure that the our of one anyone proper to story that patients that

of know entire and and which want the that other we narrative we do but big amazing have have by compete that of innovative they spirit transplant somehow course education platform so with DaVita. entrepreneurial a not is the create course they what can't of definition suite, being that is are or we we so We to of not

it. want again we and to to take them want on be we So we sharp respect and

JavierRodriguez

it's but of and little number yet. the to kidneys impossible are what go giving with it have And likely would say would one, have Gary disease, I and when. kidney to It say add bit ahead that that is say kidney is a us I to up thousand question haven't found people easy which to most otherwise. those failed And ones failure a patients, tough happened on CKD a here,

a new are take it's they very, is would to It's thing. a to comments. you other those a smart know enough and not easy rate cheap unknowns fee-for-service have have intervened. a knowns low they're if order it's and other positioned an entrants money, into anyone better what currently, need one thing. It's have we so pay than to not get a capability you be cost you did which means none the not that after doable the thing. say turn to appreciate and of the sufficient someone they, share they scaled to they I you to population, cost, give savings unsatisfactory data able of for There is what in a So anything than no can

GaryTaylor

comments. the could. I more One appreciate if Joel, for I quick one

growth risk made volume, the at a treatment be alluded level, if stated missing the OI the it this guidance growth year. You that not you the up treatment quarter to you for Obviously, core weaker fact this despite on of side. the

at but when the possibility guidance. on look So OI come year, contemplating the at you're end you treatment, you reiterated of could low

hit So OI Are end range? or slightly other that and messaging just is the and low even you volume below at there the that. puts from on enough are takes the

JoelAckerman

about were that worried on the if week enough we That's exactly We've even right, below OI that Gary. in come not things that. range got other

Operator

of from question next Raymond Our James. Ransom John

line now Your open. is

JohnRansom

Hi.

home reimbursement Just to wondering relative changes when you clinic color on reimbursement the think from get CMMI you might some reimbursement. versus

KentThiry

they're predict do which they difficult and not they they're they It's they'll don't process done hardworking, stuffs couple over applaud predicted to go haven't multi-agency have Not smart This have of get it approval and is on been to a have they're so done. so when much these things not through control. here. ideas. times and total they to able and KT have because but good creating, We a much working what have what of

If sometimes elapsed and even done they don't it's weeks, for the in be things there. next know weeks busy XX can't someone to difficult get pretty work they weeks, get or weeks. to gets not XX know. very a to might it two, only the time If it's though two So even it's in the of in two done week

response. helpful unfortunately can't So a give we you

JohnRansom

to figure of as balance going it and the paid wildly guess out? the in who and us straightforward pay and roughly pay is perhaps X% more kind which the the money out. let's we'll home think of they're clinic be those maybe XX% I total So would be dramatic it'll but XX for and at out of complicated speculate notion you do those the information we to at it treatments hard with pie, some pull lot to XX object less have saying, dollars and you of clinic get more would home. zero to today XXX we'll well, Or the and a say

KentThiry

be. that's a the idea what think I verb because literally accurate don't speculating would good Yes. is

it'll we have very, sorry I'm wait. very to but so just predict. can't And

Operator

we Next Chickering Bank. in have Pito Deutsche from queue

now Your line open. is

UnidentifiedAnalyst

good afternoon. Bowers assuming It's And Kent moving for congratulations Justin Pedo. on and the for on Hey, for Javier reign.

to back the year, the expect on there pieces moving go terms be --can the of little of you of you better the Difficult] of that and we to a towards in A some would middle with [Technical where year? how XQ ended it in in helpful. it end the the why of provide sense --should of timing, detail little receivables, Just the us more terms what jump

KentThiry

Sure.

wasn't of a bunch So individual Peter, thing. was there things. It any

back expect the give where we through which I'll were temporary we've would all did some which of operational, of to that to some through. operational that that in just flavor. which a that system change range of seasonal, a we this in and be some change of of to smaller and billing businesses. to spike led but one quarters XXXX all temporary. you but our We next are worked are in of the complexity out will the one couple half kind system and A are thing and call of we'll AR back led Some play the

Now That single XX% biggest catching four that roughly just the days. of was the thing up. we're was

UnidentifiedAnalyst

the in any was not related of any And but the made Joel. let's helpful, related of to side? XX% say And to on then that in that's your improvement there contracts commercial from the other of mix of guidance XX% Okay, the is there light RPT? that kind of quarter-over-quarter the the and any way can earlier you narrow gave commercial in range we year terms the

KentThiry

Yes.

your name the think wrong. apologize I see don't first I for two. Justin, don't can connect you any getting linkage I there;

UnidentifiedAnalyst

then And provided you are where we that Okay. RPT the you guys or? terms guidance in the still-- your are, sticking of commercial of for you there terms to guns in

KentThiry

that. on change No Yes.

UnidentifiedAnalyst

the color XXXX gears in Okay. of with maybe discussions payers, kind the like a opportunity of of environment of you're And comment what's and maybe some set the the rate from then MA the any that thinking and can them, that readmissions different overall programs programs with shifting MA? there, bit the some hospital you and provide of terms and up the towards run on an on of having you can looking some you the there like just made you'd

KentThiry

Yes.

The population. got trying there's to going reality as product interest to at lot a are end, their as they up Justin, what's it's choice the in happen models ends imagine patient people and run have. of that to because you what can being as to it and variables a to is,

the how actual very the the on have negotiation, that payers relates to quite a of MA lot actually in to as with it constructive conversations innovating risk we're book take business. can as And we're we continuing to so And business.

a So conversation. productive constructive it's

Operator

Next in [Indiscernible]. we have queue

open. Your line is

UnidentifiedAnalyst

Hi.

million $XXX me. like Just revolver a for Looks quick one you had draw sequentially.

was wondering that? the what of use proceeds Just for

KentThiry

capital. of I the AP, around and about the move it we've DSOs think largely should made you some working in so just to tie was comments that

UnidentifiedAnalyst

Okay.

in the So, then come that's interim down expected quarters? then to

KentThiry

Yes. of End Q&A

Operator

questions Speakers, we further Thank show at you. queue time. this in no

Kent Thiry

attention. you talk to very you Thank much All all right. soon. for again your We'll kind

Operator

concludes that your today's for participation. conference. And you Thank

disconnect. now may You

Jim Gustafson	Vice President, Investor Relations
Kent Thiry	Chairman and Chief Executive Officer
Joel Ackerman	Chief Financial Officer
Javier Rodriguez	Chief Executive Officer, DaVita Kidney Care
Kevin Fischbeck	Bank of America
Justin Lake	Wolfe Research
Steve Tanal	Goldman Sachs
Whit Mayo	UBS
Gary Taylor	J. P. Morgan
John Ransom	Raymond James

DaVita (DVA) 7 May 192019 Q1 Earnings call transcript