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DaVita_InvestmentAnalysis
- 1. Hebe Yang, Ritika Kohari, Samuel Sutanto, Tsien White City University of Seattle Investment Analysis
- 2. Overview Incorporated in April 1994 and based in Denver, DaVita Healthcare Partners, Inc. is a publicly-traded Fortune 500 company (NYSE:DVA) Second largest provider of dialysis services in the US with 34% of the market, serving approximately 170,000 patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD) at 2,152 outpatient dialysis centers. The company also operated 87 outpatient dialysis centers located in 10 countries outside the United States.
- 3. Overview Warren Buffett's Berkshire Hathaway Inc. owns 38.56 million shares (about 18 percent) of DaVita stock. DaVita was named the most innovative company on FORTUNE® Magazine's World's Most Admired Companies' 2014 ranking of health care facilities. Kent J. Thiry, Co-Chairman and CEO of DaVita HealthCare Partners Inc was named 37th Best Performing CEOs by Harvard Business Review.
- 5. Lines of Business U.S. dialysis and related lab services business, Healthcare Partners (HCP) Other ancillary services and strategic initiatives, which includes international dialysis operations.
- 6. Market Signal DaVita merged with HealthCare Partners Inc. in 2012, one of the largest operators of medical groups and physician networks. DaVita paid $4.42 billion in cash and stock to merger with Healthcare Partners.
- 7. Market Signal In 2012, Berkshire Hathaway Increased State in DaVita Healthcare Partners, Inc. In 2013, DaVita acquired 5 Portugal-based and 4 Poland-based dialysis Centers In 2014: DaVita had to $389 Million to Settle Federal Charges of Illegal Kickbacks Berkshire Hathaway now holds 17.56% stake. DaVita HealthCare Partners acquires Colorado Springs Health Partners
- 10. Competitors Germany-based Fresenius Medical Care (NYSE:FMS) is their largest competitor, owning 37% of the market. Fresenius manufactures a full line of dialysis supplies and equipment in addition to owning and operating dialysis centers. Hospitals or non-profit organizations.
- 12. Global Citizenship At DaVita Kidney Care, they believe that if they create a thriving, sustainable community for their teammates, they in turn will create a special clinical and caring community for their patients and their families, and inspired to help others. Caring for their patients, caring for each other, caring for our world
- 13. Corporate Social Responsibility Kidney Care in India, Saudi Arabia, Malaysia, Germany. DaVita Village Trust Surgical Mission in Jamaica. DaVita HealthCare Partners Gives $1.5 Million to Nonprofits Across the U.S.
- 14. Sustainable Development Vision: To build the greatest healthcare community the world has ever seen Mission: To be the provider, partner and employer of choice Continuous clinical improvement since 2000 9,700 teammates trained in DaVita University professional-development classes in 2013.
- 15. DaVita’s 2015 Environmental Goals Reduce energy consumption by 15% per treatment Reduce water consumption by 14% per treatment Reduce office paper consumption by 20%
- 16. Awards Fortune’s World Most Admired Companies 2014: #1 among health care medical facilities and in innovation Harvard Business Review Reputation Institute Award: 37th place 100 Best Performing CEOs: Kent Hinry placed 37th 100 Most influential people in Health Care: Kent Hinry placed 10th place. 2013 Communitas Awards Excellence Winner Health Ethics Trust: Best Practice Award
- 17. Opportunity Dominate the dialysis business Expand Domestically and Internationally Comprehensive portfolio Investor confident with the company
- 18. Growth through Acquisition Adding more domestic dialysis centers Expanding internationally HCP
- 19. Challenges Lack of vertical growth Potential dependency on limited supplier Higher level of indebtedness
- 21. Future Risks Increased Operating Costs Reduction in Medicare Advantage Plan Reduction in commercial payors due to unemployment will reduce significant profit Possibility of losing share among private insurers due to the company’s refusal to accept reimbursement cutbacks International Expansion requires significant investments
- 22. Profit Risks DaVita makes all of its profits from privately insured patients, which make up just 10 percent of DaVita's kidney-care customers. The other 90% comes from Medicare/Medicaid, and it reimburses at an unprofitable rate for DaVita and most health-care companies. They provide zero percent of profits. Losing a modest portion of those private payers could cut into the company's earnings.
- 23. Key Objectives. Biggest Threat. Keeping people off dialysis in the first place Emerging Technology: Artifical kidney using stem cells and nanotechnology Better solutions for dialysis due to great risk and great cost
- 24. Analyst Rating The Street Rating: A (Buy) Zacks Investment Research: Rank #3 (Hold) Keybanc: Hold Deutsche Bank: Hold Raymond James: Market Perform (Hold) Jefferies: Buy Citigroup: Neutral (Hold)
- 25. Analyst Rating Six equities research analysts have rated the stock with a hold rating and five have issued a buy rating to the stock. The company presently has an average rating of “Hold” and an average price target of $75.30.
- 26. Our recommendation In 2013, Health-care (S5HLTH) stocks are leading gains in U.S. equities this year for the first time since 1998 as companies cut costs and investors speculate an expansion of insurance programs. After three quarters into 2014, health care stocks continue to be some of the best performing stocks in the markets, as they have been top performers over the past several years.
- 28. Health Care
- 29. Our recommendation Despite the concern of government cutting Medicare Advantage Plan, they will not drive down the health care industry to the ground. Strong lobbying against the cuts from insurers. In 2014, Medicare has reversed proposed payment cuts to private heath plans in the popular Medicare Advantage program for the second straight year amid strong pushback from health insurers and Capitol Hill.
- 30. Our recommendation Although dropping on Return on Capital to 4.4%, DaVita maintains predictable growth and shareholder-friendly management. P/E ratio of 24, Forward-looking P/E of 19, Five-year average P/E is 18, which is fine but not overvalued. Significant debt obligations impact the company's growth and development plans.
- 31. Our recommendation DaVita provided 6.3% more dialysis treatments per day in the fourth quarter than a year ago, leading to total net revenue of $3.06 billion, up from $2.47 billion last year. Sales from HealthCare Partners climbed 3.2% sequentially to $829 million in the fourth quarter, and that segment's operating income totaled $98 million.
- 33. Our recommendation Despite of the high risk and great cost, dialysis is still the preferred method for many years to come. Baby boomers are driving demand for primary and specialty care, which supports demand for DaVita's HealthCare Partners segment.
- 34. Our recommendation Kent Thiry, CEO of DaVita HealthCare Partners Inc., will step in temporarily to run HCP, hoping to reverse a “difficult 18 months”. Kent Thiry is known for his bluntness regarding challenges to the company, and several analysts pointed out during Thursday's earnings call that he has overestimated potential headwinds several times in recent years and then outperformed expectations.
- 35. Buy gradually. Add to watchlist. Wait for a pullback.
Hinweis der Redaktion
- Based in Denver, DaVita is a publicly-traded Fortune 500 company (NYSE:DVA) In Nov 2012, the company changed its name to DaVita HealthCare Partners Inc. from DaVita Inc., following its merger with HealthCare Partners. As of September 30, 2014, DaVita Kidney Care operated or provided administrative services at 2,152 outpatient dialysis centers located in the United States serving approximately 170,000 patients. The company also operated 87 outpatient dialysis centers located in 10 countries outside the United States.
- The largest line of business is U.S. dialysis and related lab services business, Leading provider of kidney dialysis services in the U.S. for patients suffering from chronic kidney failure, also known as ESRD. The second one is Healthcare Partners (HCP) A patient- and physician-focused integrated health care delivery and management company. The Company also operates various other ancillary services and strategic initiatives, which includes our international dialysis operations.
- In 2012, Company paid $4.42 billion in cash and stock to merger with Healthcare Partners. - Foothold in much broader network It’s a smart and good strategic move. In striking the deal, DaVita is wagering that American health care is changing significantly—moving away from a fragmented world in which individual doctors and hospitals get fees for each service, and toward large integrated providers that coordinate all patients' medical needs and get paid in ways that reward quality and efficiency. HealthCare Partners gets much of its payment in so-called capitated flat fees that are supposed to cover nearly all of a patient's care, an arrangement that puts a provider at risk of losing money if the person requires many pricey services. The latest deal may be the biggest so far. Denver-based DaVita will pay $3.66 billion in cash and about 9.38 million shares of DaVita common stock with a value of $758 million, based on DaVita's closing price of $80.81 Friday. In 4 p.m. trading on the New York Stock Exchange Monday, DaVita's shares were up 4.9% to $84.80. The company will also pay another $275 million in cash if HealthCare Partners hits certain performance targets in 2012 and 2013. HealthCare Partners had net income of $409 million last year, or earnings before interest, taxes, depreciation and amortization of $527 million. The deal is expected to close in the fourth quarter.
- In 2012, Berkshire Hathaway Increased State in DaVita In 2013, DaVita acquired 5 Portugal-based and 4 Poland-based dialysis Centers In 2014: DaVita had to $389 Million to Settle Federal Charges of Illegal Kickbacks Berkshire Hathaway now holds 17.56% stake. DaVita HealthCare Partners Acquires Colorado Springs Health Partners, a multi-specialty medical group with more than 100 physicians at 11 locations throughout the Pikes Peak region.
- Strong financial performance from 2011 – 2013 2013 overall income was increase by 18.18% CA was done by -1.61% was due to pending lawsuit ($397K) PM down by -21.81% was due to: increase in loss contingency due to pending lawsuit – 363% patient care cost of 47% $31k transaction cost related to the acquisition of the HCP
- Unlike some of its competitors, DaVita operates only in the dialysis services business. For instance, Fresenius Medical Care, in addition to owning and operating dialysis centers, manufactures a full line of dialysis products such as hemodialysis machines, peritoneal dialysis cyclers, etc. Fresenius’s dialysis business is vertically integrated, providing dialysis treatment at its own dialysis clinics and supplying a broad range of products to these clinics. This gives Fresenius cost advantages over DaVita because of their manufacturing capability. On the other hand, DaVita relies upon suppliers that are either the sole or primary source of products. The two largest dialysis companies, Fresenius Medical Care (Fresenius) and DaVita, account for approximately 71% of outpatient dialysis patients in the US. Approximately 44% of the centers not owned by DaVita or Fresenius are owned or controlled by hospitals or non-profit organizations.
- Strong stock price performance that was higher than the stock index and Health care index
- Has acquired 16 company domestically and continue expand to internationally The comprehensive portfolio help expand their customer base
- DaVita’s preferred business strategy over the last several years has been the acquisition of dialysis centers and businesses that own and operate dialysis centers as well as other ancillary services. The company acquired 16 dialysis centers in the U.S. and 4 dialysis centers outside the U.S. along with other medical businesses in the first nine months of 2014. Moreover, this strategy has led to DaVita’s international expansion thereby strengthening its position in the emerging and developing markets, such as, Columbia, Portugal, Malaysia, Taiwan, Saudi Arabia, China, India and Germany. DaVita can still grow organically. But, in terms of acquisitions, DaVita has only three avenues. Adding more domestic dialysis centers (hardly any value-adding targets left), expanding internationally (speculative, and not working well thus far), and HCP. If we are not able to continue to make acquisitions, continue to maintain acceptable levels of non-acquired growth, or if we face significant patient attrition to our competitors or a reduction in the number of our medical directors or associated physicians, it could adversely affect our business.
- Expand business into manufacture dialysis machine Limited dependency on the supplier could lead to decline in revenue Indebtedness could lead to limited acquisition or limited on introducing new technologies DaVita has a significant level of indebtedness. The company reported an increased total debt of $8,141.2 million in FY2013, compared to $3,532.21 million in FY2009. As a result, DaVita’s debt-to-equity ratio increased from 1.65 in FY2009 to 1.83 in FY2013. High debt may affect DaVita’s flexibility in planning for, or reacting to, changes in its operations or business. Among other things, the company's high debt may also limit its ability to borrow additional funds and restrict it from making acquisitions, introducing new technologies, or exploiting business opportunities.
- 2.64
- We anticipate that we will continue to experience increases in our operating costs in 2014 that will outpace the Medicare reimbursement rates that we receive, which could significantly impact our operating results. We expect to continue experiencing increases in operating costs that are subject to inflation, such as labor and supply costs, regardless of whether there is a compensating inflation-based increase in Medicare payment rates or in payments under the bundled payment rate system. HCP also faces significantly lower Medicare Advantage reimbursement rates from risk recalibration. Reductions in Medicare Advantage health plan reimbursement rates stemming from recent healthcare reforms and any future related regulations may negatively impact HCP’s business, revenue and profitability. The Health Reform Acts contain a number of provisions that negatively impact Medicare Advantage plans, which may each have an adverse effect on HCP’s revenues, earnings, and cash flows. Revenues will also be adversely affected by the government’s proposed cut in Medicare reimbursements in 2015. DaVita is grappling with lower Medicare reimbursement in both divisions. Government healthcare reform cause inadequate payment could affect company’s profit Then in 2016, he said, the company could struggle to bring in even that much money because of declining Medicare reimbursements and because of the "nerve-wracking" possibility of losing share among private insurers because the company refuses to accept the reimbursement cutbacks that some of its competitors are taking from major payers. They are also facing pressure from commercial insurers. The pricing pressure is so severe they may have to end contracts, rather than accept lower commercial rates. A rise in unemployment may result in people shifting from commercial insurance schemes to government schemes due to a wide disparity in payment rates. During the 2013 economic downturn, unemployment raise results in shifting from commercial insurance to government If the percentage of our dialysis patients with commercial payors continues to deteriorate or if we experience a decrease in our overall commercial rates, our operating results could be adversely affected.
- Profit generator are most come from commercial payor. DaVita makes all of its profits from privately insured patients, which make up just 10 percent of DaVita's kidney-care customers. The other 90% comes from Medicare/Medicaid, and it reimburses at an unprofitable rate for DaVita and most health-care companies. They provide zero percent of profits. Losing a modest portion of those private payers could cut into the company's earnings. Dialysis and related lab services account for 33% of the company’s revenues where payments received from commercial payors are the primary generators of profit. A rise in unemployment may result in people shifting from commercial insurance schemes to government schemes due to a wide disparity in payment rates.
- As it turns out, the biggest potential threat to DaVita's future may come from what benefits everyone the most - keeping people off dialysis in the first place. Three artificial kidney projects have been put on fast-track by the FDA. Those projects create an artifical kidney using stem cells and nanotechnology, and are targeted for clinical trials in 2017. Further out is the use of 3D bioprinters to create a kidney. These kidneys are not suitable for human transplant, but that feat may be possible in ten years. All in all, dialysis is a very imperfect solution. It comes at great risk and great cost. Only 35% of dialysis patients survive for more than five years. Better solutions are certainly needed.
- DaVita Healthcare's incessant efforts to upgrade services, global expansion initiatives and active acquisitions are supported by strong cash flow and financial position. DVA shares are up 17% year-to-date vs. the S&P 500’s 8% gain; "DVA shares are within ~5% of our price target, and at current valuation levels we see a more balanced risk/reward equation. Our views on the core dialysis business (80% of EBIT) remain unchanged: we think DVA has a strong position in the U.S. capable of generating steady growth, and a solid opportunity for L-T growth internationally. Moreover, the merger with HealthCare Partners bodes well for long-term growth, although Medicare Advantage (MA) rate cuts may hurt this segment in future. With respect to HCP, we expect better earnings into 2015 as recent new-entry markets recover, but we believe a more bullish upside case for the HCP story could be further out given the complexity and likely pacing of HCP's new market strategies. Hold better reflects our views at this juncture; estimates / $77 price target remain unchanged.” Its high debt levels, the adverse effect of healthcare reforms, and an increase in MA beneficiaries are other concerns. 1) Medicare pricing will likely continue to depress dialysis operating income growth for the next few years; 2) HCP’s growth trajectory and timing still remain uncertain. On the positive side, we believe potential capital deployment could offer some upside to our estimates," he said. KeyBanc Capital Markets noted, “We are downgrading shares of DaVita Healthcare Partners Inc. (DVA-NYSE) to HOLD from BUY as the shares are close to our $75 price target, and we now believe the risk/reward is balanced. In addition, we are reducing our estimates slightly to reflect more modest growth expectations from the Company's dialysis business. DVA shares are up 17% year-to-date vs. the S&P 500's 8% gain; however, we believe further outperformance could be hampered by the following issues: Medicare pricing will likely continue to depress dialysis operating income growth for the next few years; and HCP's growth trajectory and timing still remain uncertain. On the positive side, we believe potential capital deployment could offer some upside to our estimates.” Darren Lehrich of Deutsche Bank noted, "Our views on the core dialysis business (880 percent of EBIT) remain unchanged: we think DVA has a strong position in the U.S. capable of generating steady growth, and a solid opportunity for long-term growth internationally." Lehrich also views the HealthCare Partners (HCP) deal as a more long-term positive, but said a Hold rating better reflects his views, given the "likely pacing of HCP's new market strategies. John Ransom of Raymond James noted the downgrade is in reaction to the announcement that HealthCare Partners' president and CEO, Dr. Craig Samitt, will be stepping down effective August 1. Being that Samitt was only appointed back in March, Ransom said, at best, this means the company made an "ill-timed error in judgement." In addition to this announcement, Ransom noted that HealthCare Partners has suffered from a series of disappointments, and to become more constructive he needs to see more clarity, which he doesn't expect until the company's July 31 earnings announcement.
- DaVita Healthcare's incessant efforts to upgrade services, global expansion initiatives and active acquisitions are supported by strong cash flow and financial position. DVA shares are up 17% year-to-date vs. the S&P 500’s 8% gain; "DVA shares are within ~5% of our price target, and at current valuation levels we see a more balanced risk/reward equation. Our views on the core dialysis business (80% of EBIT) remain unchanged: we think DVA has a strong position in the U.S. capable of generating steady growth, and a solid opportunity for L-T growth internationally. Moreover, the merger with HealthCare Partners bodes well for long-term growth, although Medicare Advantage (MA) rate cuts may hurt this segment in future. With respect to HCP, we expect better earnings into 2015 as recent new-entry markets recover, but we believe a more bullish upside case for the HCP story could be further out given the complexity and likely pacing of HCP's new market strategies. Hold better reflects our views at this juncture; estimates / $77 price target remain unchanged.” Its high debt levels, the adverse effect of healthcare reforms, and an increase in MA beneficiaries are other concerns. 1) Medicare pricing will likely continue to depress dialysis operating income growth for the next few years; 2) HCP’s growth trajectory and timing still remain uncertain. On the positive side, we believe potential capital deployment could offer some upside to our estimates," he said. KeyBanc Capital Markets noted, “We are downgrading shares of DaVita Healthcare Partners Inc. (DVA-NYSE) to HOLD from BUY as the shares are close to our $75 price target, and we now believe the risk/reward is balanced. In addition, we are reducing our estimates slightly to reflect more modest growth expectations from the Company's dialysis business. DVA shares are up 17% year-to-date vs. the S&P 500's 8% gain; however, we believe further outperformance could be hampered by the following issues: Medicare pricing will likely continue to depress dialysis operating income growth for the next few years; and HCP's growth trajectory and timing still remain uncertain. On the positive side, we believe potential capital deployment could offer some upside to our estimates.” Darren Lehrich of Deutsche Bank noted, "Our views on the core dialysis business (880 percent of EBIT) remain unchanged: we think DVA has a strong position in the U.S. capable of generating steady growth, and a solid opportunity for long-term growth internationally." Lehrich also views the HealthCare Partners (HCP) deal as a more long-term positive, but said a Hold rating better reflects his views, given the "likely pacing of HCP's new market strategies. John Ransom of Raymond James noted the downgrade is in reaction to the announcement that HealthCare Partners' president and CEO, Dr. Craig Samitt, will be stepping down effective August 1. Being that Samitt was only appointed back in March, Ransom said, at best, this means the company made an "ill-timed error in judgement." In addition to this announcement, Ransom noted that HealthCare Partners has suffered from a series of disappointments, and to become more constructive he needs to see more clarity, which he doesn't expect until the company's July 31 earnings announcement.
- Health-care (S5HLTH) stocks are leading gains in U.S. equities this year for the first time since 1998 as companies cut costs and investors speculate an expansion of insurance programs. Profits from health-care companies in the S&P 500 will climb 8.4 percent next year, according to analysts’ estimates compiled by Bloomberg. Growth stalled at 0.9 percent in 2012. “In the long run the economic benefits of the states will be such that most states will eventually expand Medicaid and we’ll see significant growth not just in 2014 but beyond in this space,” Richard Zoretic, who heads the Medicaid business at WellPoint Inc., the second-biggest U.S. health insurer, said in a Jan. 23 conference call with analysts.
- Health-care (S5HLTH) stocks are leading gains in U.S. equities this year for the first time since 1998 as companies cut costs and investors speculate an expansion of insurance programs. Profits from health-care companies in the S&P 500 will climb 8.4 percent next year, according to analysts’ estimates compiled by Bloomberg. Growth stalled at 0.9 percent in 2012. “In the long run the economic benefits of the states will be such that most states will eventually expand Medicaid and we’ll see significant growth not just in 2014 but beyond in this space,” Richard Zoretic, who heads the Medicaid business at WellPoint Inc., the second-biggest U.S. health insurer, said in a Jan. 23 conference call with analysts.
- Although the company worried about the government’s proposed cut in Medicare reimbursements in 2015, they will not drive the healthcare industry down to bankruptcy. In 2014, Medicare has reversed proposed payment cuts to private heath plans in the popular Medicare Advantage program for the second straight year amid strong pushback from health insurers and Capitol Hill. The Centers for Medicare and Medicaid Services on Monday, after proposing in February a 1.9 percent cut to private plans, said government payments to insurers in the Medicare Advantage program will increase .4 percent on average in 2015. The increase, CMS said, is slightly higher than what insurers had requested. "That gives us great confidence with this final rate structure we'll continue to see a strong program," said CMS principal deputy administrator Jonathan Blum. Insurers this year had started lobbying against the cuts earlier than ever. Their seven-figure campaign protesting expected cuts started in January, more than a month before Medicare even proposed rates.
- DaVita acquired HCP in 2012 to step into the ring of managed care at a time when health care leaders were discussing the importance of getting more patients out of acute-care settings and into primary care such as that which many of the doctors in that company provided. Company officials expected that HCP would be able to grow both organically and through mergers and acquisitions, but since completing the transaction in November 2012, that growth has not matched expectations. While Thiry on Thursday predicted that he expects HCP operating income in two of its primary markets — Arizona and New Mexico — to increase by at least $25 million in 2015 over this year’s income, he also suggested that he has nudged expectations regarding the division entering new markets “toward deceleration.” DaVita has a significant level of indebtedness. The company reported an increased total debt of $8,141.2 million in FY2013, compared to $3,532.21 million in FY2009. As a result, DaVita’s debt-to-equity ratio increased from 1.65 in FY2009 to 1.83 in FY2013. High debt may affect DaVita’s flexibility in planning for, or reacting to, changes in its operations or business. Among other things, the company's high debt may also limit its ability to borrow additional funds and restrict it from making acquisitions, introducing new technologies, or exploiting business opportunities. According to Weschler, he owns DaVita for three reasons: the company is improving the quality of health care, delivering savings to the health care system, and has a predictable, shareholder friendly business. DaVita is improving the quality of dialysis care at its centers, which reduces hospitalizations and its inherent risks. Improvements at DaVita and Fresenius have resulted in ESRD patients living longer than they did 21 years ago. Warren Buffett’s investment tend to be for a long-term investment. Warren Buffett trusted his lieutenant, Ted Weschler, for DaVita’s investment. Ted Weschler's third criterion for investing in a health care company actually encompasses three items: higher return on capital, predictable growth, and shareholder-friendly management. DaVita checks off the latter two points, with solid revenue growth and a steady management team. Higher return on capital, however, is a different story. DaVita's return on capital has dropped in the last couple of years, to around 4.4%. That's lower than its larger competitor Fresenius. On the other hand, DaVita beat out Berkshire Hathaway for much of the past five years in terms of return on capital.
- DaVita provided 6.3% more dialysis treatments per day in the fourth quarter than a year ago, leading to total net revenue of $3.06 billion, up from $2.47 billion last year. Sales from HealthCare Partners climbed 3.2% sequentially to $829 million in the fourth quarter, and that segment's operating income totaled $98 million.
- That predictable revenue stream is going to keep kicking off significant cash for DaVita shareholders. Thanks in part to the merger with HealthCare Partners, DaVita's cash flow jumped to nearly $1.8 billion over the past 12 months, which is roughly five times 2009 levels. Meanwhile, cash flow at Fresenius has grown less substantially.
- While treating patients who aren't eligible for transplant is costly, dialysis is more attractive and less expensive than leaving the disease untreated. Importantly, thanks to industry innovation, dialysis patients are spending less time in expensive hospitals than they did in 2005. Baby boomers are similarly driving growing demand for primary and specialty care, which supports demand for DaVita's HealthCare Partners segment. The number of people with diabetes, for example, is projected to climb to 552 million worldwide in 2030 from 346 million in 2011. There are several big factors working in DaVita's favor in the years ahead. Americans are aging, and conditions such as diabetes and high blood pressure, which can ultimately lead to kidney failure, are increasingly prevalent. DaVita's services should be in high demand for a long time to come.