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DaVita (DVA)

Participants
Jim Gustafson Vice President of Investor Relations
Javier Rodriguez Chief Executive Officer
Joel Ackerman Chief Financial Officer
Pito Chickering Deutsche Bank
Kevin Fischbeck Bank of America
Andrew Mok Barclays
Justin Lake Wolfe Research
Whit Mayo UBS
Gary Taylor JPMorgan
Matt Larew William Blair
Call transcript
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Operator

Good evening. My name is Andy, and I will be your conference facilitator today. At this time I would like to welcome everyone to the DaVita Second Quarter 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remark, there will be a question-and-answer period. you. Thank Instructions] [Operator Mr. begin may your you conference. Gustafson

Jim Gustafson

And our and call. We forward-looking our you, CFO CEO; I'm securities Gustafson, Investor meaning the welcome, statements today Vice within in Zumwalt, and call, this everyone conference laws. quarter Ackerman, that federal Jim Relations. of President second our Vice me note appreciate company. the Please during Joel remotely we are Rodriguez, to our Thank joining your LeAnne Group interest Javier President. continued may make of

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

SEC on Form XX-Q. uncertainties, subsequent further refer press second on to filings, concerning Form quarterly most report our our earnings including annual recent XX-K risks For our details and report and please quarter and these release

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

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

Javier Rodriguez

results. Thank financial afternoon, for Thank everyone. and our you, good Jim, second you for quarter us joining

were of company's amongst of benefits performance as reflecting our the home the our to this meet nearly most our been hospital, we quarter and transplant. and in want with through clinicians patient-centric, to compassion allow start through six past way offering modality CKD day. each center. or our did kidney several of the are thanking the and patients they I of options months and into this energy patients care our platform, comprehensive the We're us patient teammates, our dialysis provide safety The in finest the care continuity would the of the especially months beginning all pandemic. where dedication strong the into intensity every teammates demonstrates that of in one experience last if acknowledging thousands chapters all The centers, teammates. care and for the still high with of amongst patient's I offer they a And life-sustaining the First ESRD in level our health by who as our you patients. history, exceptional now provide to our quarter and and have walk The of you

infection have as COVID our teammates special to the has as and supplemented control clinician-led within well test the and and with helped for of We of treated of patients hospital, the effective number burden our enabled on outside external labs. is lab, which These hospitals. conducting maximize physician with policies patients efforts course have partnerships for both us by patients reduce good

had prepared a what work While lies our patients I second We teammates our to we say feel and keep continue strong know for we that our certainty cannot can safe. to financial quarter. ahead,

share adjusted a we're $X.XX. to guidance earnings our raising $X.XX year per As to $X.XX the result, by for

which with benefit like expenses incurred despite in to four detail. operational health to more other and Joel additional the Today, we offset came items. Our explain travel and COVID reduced in savings by expenses will I'd of response performance COVID strong form associated amongst investments items, cover in

associated the off largest commercial mix, me by uncertainties two talking last of that volumes Let treatment we identified pandemic the about quarter. with and start

for COVID expect to the low The of patients on X.X% therefore, below insurance. away primarily to the were primarily population, our were X.X% more older dialysis the volumes range September. government covered in Our and provided end patient related frequently unfortunately census our by the deaths has among treatment fall year starts of due been negatively COVID of by remainder we to impacted that and delayed-by-patient passed

are in access employment patients As assessment negative private on versus our our we on have than pay to only a maintain patient that their hard as of do better mix, government job although health months know actual our with thus and data seen is not insurance impact losses, three and fared ability of insurance coverage. What worked preliminary. commercial quarter private result a far, material population their we any to census expected our their commercial the

resiliency we While the our and long-term impact in business natural the of exist offset believe COVID of model. some remain uncertain,

home topic, exciting share I'd the second like business. some to our For developments in

As population on you XX% point at patient a than a more we our their leadership home start from in home approximately care position modality of some utilizing with know, and during XX% journey. modality home

from X,XXX to in-center times uptick Our five now patients dialyze We home. States. seen to more this than XX,XXX over patients, and drug programs training, we've home growth home growth medication have by education, across the continues interest United and who a slight outpace our wanting over dialysis at at received pandemic in during lab

we within choose DaVita education home is technology to if right In The to fact, made miles of option help and XX% of of program. from scale a in patients is business it dialysis of capabilities, the investment XX result for them. dialysis, patients physicians years our many have live of and that give the home

examples. couple Let me provide a of

First, several for monitoring which patients. approximately high-risk home monitoring launched our we enables of platform, years ago, vitals remote daily of X,XXX our

year, XX,XXX support recently, groups support released to capabilities and like provide program, home robust disease continuity virtual platforms building patient of continued time therapy. We of In patient promote home significantly amount have increase and enhance virtual a addition, on early care extend care that of return continue these and home touches for out to spend to platform, capabilities a features these More home which patients to management the the has last hospitalized frequency quality telehealth we've over patients. now base help we support patients. therapy allowed us the of believe patient to of the that user

In programs is keep best hospitalization, continue the their patients for the telehealth identify these to in maybe the Artificial of place, in we which modality. of dialysis. home PD patients already pandemic. patients ideas launch is country pilot one of connected continue growth in-center our innovation helps priorities. to many and my largest risk that to help top be we're switching the for A dialysis home Intelligence around and our during amongst fact causes that And Home whom we new support and ability example excited second to to as also that system served patients a the at advantage had has is about significant caregivers

right We enable suite in right help patients journeys. us that seamlessly of full also believe our the at modality the access modality their dialysis time offerings to

My continue industry to patients we home. Our in benefit growing calcimimetic. from lead can topic partnerships our our footprint, national seek our to the physician is capabilities as unique third and

of and observe of the moving as recently bundle believe data, As proposed time for know, gave period therapy the reimbursement especially calcimimetic Medicare therapy. oral into sufficient and We payment utilization CMS CMS XXXX. of including TDAPA in pricing rule now many you of that phase light the in IV we're proposed the the mix to the next calcimimetic issued in payment

for the physicians in as and a last because high-quality also in in standards drove low-cost lower mix protocol last system, is of Medicare underfunding of cost this higher the XXXX similar that for teams for years, will economics We offset a higher topic our My resulted rule and we will believe calcimimetics patient-centric in alternative. instance which guided result our Medicare IV achieve of cost generic Advantage. XXXX our remaining care, the the down healthcare clinical in bundle. to mix the new help couple have to drugs which Over of the developed protocols

multiple question are many There recent be MA dialysis shape for that Advantage in suffer from eventual with in many only As aware rule calls barriers the plans. ruling network patients, the we are requirements dialysis all loosen CARES no that the Advantage you the by will for enroll Medicare to Congress provide a believe the patients. Medicare the care be have patients will positive patients year. care to XXst that over in believe eligible visibility the will chronic expand CMS' managed breadth in organizations plans, XXXX, clear We coming option gradual into of including ESRD from and enacted prevented as ESRD opportunity to dialysis patients. Medicare Act conditions. to enrollment And Advantage in Unfortunately, provide to of Medicare patients ending to enrolling factors we the new do services, adequacy this will who MA of available all plans development the have that that many providers coordinated although Century enrollment choices continue patients active

outlook. an on I'll to on results to update our our provide Now, QX it financial and pass to Joel discuss

Joel Ackerman

strong had net Thanks as the a Javier. primarily quarter, our COVID Care our of core in adjusted a improved We Kidney margins result response, headwind despite business. from

some are Here specifics.

this a non-acquired increased in in offset QX. and partially COVID-related, We in X.X% transplants X.X% mortality nationwide QX believe treatments. slowed kidney to drivers starts decrease were primary patient Our lower growth were decrease treatment from lower the by of as and missed new

up higher result NAG was offset year. due normal to net to partially calcimimetics treatment. and of with by our seasonality release, least offset in co-insurance revenue. COVID revenue RPT persist this until We line per expect revenue the volumes headwind deductibles sequestration was a Total Medicare as temporary next by time this at in expectations lower and lower

while national such since on we work. mix and this believe are $XX population expect On management quarter. income improvement basis strong commercial finally COVID the our rate have in factors patients patients margin the furloughed quarter operating enrolling that the contributed insurance to impact of said, the was return any P&L quarter-over-quarter. across our were to who Adjusted that was job rate And other a income exchange than things the we COBRA have as Many second returned among we the Javier our a the other not commercial including to margin higher approximately a were long-term rate. underlie our than been for initially to loss in uncertain, at believe remain XX%. have expanded past. we our operating of for to an of lower see million in commercial our work plans patient commercial unemployment laid strong cost at or who RPT. number seen year-over-year dynamic in off As Calcimimetics due net impacts did There and

let about on of the our COVID financial me give impact results. some Now you details

$XX the of our to costs. costs. teammates estimate benefits include For and was other operating we travel, QX in health impacts training income largest the expenses quarter other Offsets approximately compensation to to lower and our $XX that benefits on and and the Incremental lower million these expenses incurred negative we contributor among decreased things, million. facility

in Medicare also the temporary benefit started halt We had sequestration on May. of the that

As the of and on income these quarter estimate impact for we that $XX million. net of our a was offsets, operating result $XX million between the COVID

hard impact Looking the XXXX, the virus given second progress of economic the the the of COVID uncertainty forward of to impact. and half is forecast the and to

that QX beyond could situations in of our could range wide of what COVID-XX QX. to occur net similar financial including extreme experienced guidance we While a scenarios range, our in of each updated and incorporated in are QX which in the scenarios be we impact have

guidance. next me to turn our Let XXXX

performance, of are guidance first Given we half our strength updating the ranges. our

by diluted earnings $X.XX adjusted per share our raising from range $X.XX to guidance are $X.XX. We

the adjusted billion, increasing our $XXX guidance operating our million We to over to previous cash guidance million We're for increase $XXX XX% XX.XX%. flow $X are margin an range. of to income guidance raising range

for million an We $XXX provided $XXX project to to the the million. range estimated in range of expenditures, expect spending. has billion pandemic $XX.X as On to the billion midpoint expect at now revenue growth. we guidance range be our due the come maintaining are capital volume of range anticipated now in that to bottom of but to $XX.X end the some we We below slowdown of delayed

of not to assumed do of impact. to I our to primary expect need the CMS' adjusted provide COVID. tailwinds COVID-related hopefully anticipated we compared tailwinds be tailwind OI. are The guidance this operating today, XXXX and fall, of and calcimimetics, volume larger want to not anticipated the do in we initiative headwinds to adjusted and later On defense net still reduction final lack anticipated will costs a highlight on non-GAAP headwind while include While large implications for rule calcimimetics headwinds direct or income. Primary the a wait valid for we mix specific some XXXX

had repurchases. QX month We shares or We during during repurchase repurchases. share July. of indicated in not suspending share on March Finally temporarily the are that any we did

activity do authorization our restart please so considering of share We the discretion Directors. Q&A. at and repurchase to when the provided that the and operator, our are line of by for carefully With within open management will Board

Operator

you. Thank

Instructions] will Pito now conference. the [Operator We first Bank. Chickering from Speakers, begin Deutsche from of the today’s question question-and-answer is session

Your line is open. now

Pito Chickering

Good questions. Thanks my morning, guys. for taking

If operating income more you about can a bit talk little guidance.

Looking XX.X%, despite looks sort and XX.X%. year of the year and the implied, as of all half at COVID at half the though sort back the for first the XX% is of these margin of between costs

the margin get details growth pretty of big sort of of to big we sort the decline. in a So from walk back slowing sort sort of Just how get Is walk year? sort you the through contraction of down? of how would we of treatment Can the pretty through us there? us it half

Joel Ackerman

Pito. Hello, here. Joel I'll Sure. take,

you not OI million well taking of second our the I middle biggest we've million. are if year our in number most the by first OI components are middle that think past that of our million decline $XX the a the And again in to about the the half way, number expect range. to the take top guidance, of as calcimimetics in from which in reduction calculate be that year. the three that the The guiding of to of So profits, half -- the range of do to roughly $XXX we half of you $XX talked but would we're

half So first most the year. of of comes in the that

happen come assumptions of have around Second of COVID the COVID, the of COVID the with over ballot down the of associated two will in with worth only $X.XX in third, half to about while and And a of what We've while And California. worth really the cost I'd offsets the is back also quarter's that we're is year. wide talked in the range of year, come initiative back share COVID. the had half down. that course point first as one could primarily then a would half costs could year back year the year using a of the pretty the quarters' the but COVID half of the that

in half things onetime the -- of that And together, some the million those things front COVID of aided half is year other $XXX you that think to year put you'll projects two G&A to potentially incur things from get some of maintenance get up some center vast other the small dynamics of anything that that show So we and decline onetime would could finally I'd One at range. the the that those were we of are of OI would negative guidance and year could of those decline. the if things be in adjusted there facility be year. you the million back the the Couple and three there be there components back and the first $XXX in didn't because in the costs could of and OI could majority those half the other half that point out. and relatively

Pito Chickering

finally managing When don't of as that your the is how MA event? MA Is the the And a you'll impact sort sort rule? seeing soon? of more Medicare in is contracts spread patients discussions it through little you you Okay. balances about that rule? around plans? and it XXXX multiyear conversations final Advantage network And walk talk do for from with us a too MA what's plans, think bit a negotiations or the bonus on And then follow-up Can start checks a have plans? with you can changing more the better impacts certify your narrow. had They of then out. is payments Because too you

Javier Rodriguez

know mean that had and supplement subjective is that attest that are. me goes again. mean grab want on its might also might adequacy had standard. The It time adequate and it did and it short to aggressive past. have we not the at what life and several let nothing. mean objective It I to you you network if we standard in Pito be from and come now an implications miss me might there pieces do plan's anything might distance now in just know don't is It And if used What Joel a as that the plans some please answer the get that. networks. standards

perspective the to the you our early if from against essence have you too enrollment. ESRD out But because network in discriminating it's patients So and it adequacy disencouraging pulling are is tell. proper don't

so against pick long time for they our to to and thing unusual perspective the a the ESRD goes like patient's just on to from deserve have And footing MA patients it's else. it anyone waited an be and We right very the rights. just equal everyone

And was a disappointing so part. that

contracts said to have plans. relates with of most negotiations our it as you multiyear As we MA

early working We any it Did We on can of I can of with could really them. do are to work But many care. not work coordination and that your the occurred. it have as relates well miss tell we too patients contracts think to together, as question? is good things MLR combined for

Pito Chickering

that last that No. to the if what one would the is they to MA self-certify narrow? don't too network checks But balance balances? I what's the mean sure the has I plan guess self-certify a be and So are make

Javier Rodriguez

don't doing enforced. the is we law the mean it to kind that's And that how spirit subjective sure right what into to. keeping adhered know make of our of But be will problem. up we're it is network. our proper I Yes. radar of goes have attestation they from that some But part of now course the perspective

Pito Chickering

so you Thank much. Great.

Javier Rodriguez

Thank you.

Operator

from The of Fischbeck you. next Bank Thank America. question is from Kevin

Your line open. is now

Kevin Fischbeck

Great.

guess Just are to contracts. on up that your most wanted maybe mentioned follow contracts you I multiyear of

that mean that within as you with have you're today XXXX? in economics relatively XXXX entering similar does So plans MA your

Javier Rodriguez

renegotiations, still year. so that. creative I higher to fair have fair back is of useful do and a they course, the assumption. patients. think a we plans the juncture the At Once there to to this the it that and But take end And you end it's same it's every from of given a any Yes, the year on to say we is but while system to in year have from us more something risk and provide negotiations. services big on trying the do appetite is that overlap.

we're So We'll conversations. the see still in out. it how pans

Kevin Fischbeck

this not Yes. assume maybe I implemented. And mean they point? I been are I conversations of have just with couple sound have planning you happened a But health for does it plans. do mean, ago, at so many Or guess have sense? any all always changes it contracts -- at months you I are aggressive you like

Javier Rodriguez

Yes.

everybody the Kevin as trying it for have patients to think the do that coordinated is reality I to care. relates opportunity constructive to is this something

us systems have, our to they And patient so something do, what what risk for both big appetite but sides to do useful can and system what trying appetite have the population. that's plans are see this can do, their

pans out And we'll over how see so that time.

Kevin Fischbeck

time QX results? have a far good or there pretty to much this sense have is wait you you would do think in as this of visibility we on XXXX goes as year Will the better you call? point QX until a where And have

Javier Rodriguez

how fact negotiations. will a don't with little to it the because of of know coupled out expirations when I interplay going and take up impact play COVID the to come I is longer that contracts think

had a think So take that. to than I going bit to longer if I guess it's

Kevin Fischbeck

I as be that Okay. it far next saying And to will then year guess Joel, your point, you're neutral calcimimetics as earnings. guess I

$XX similar is making close So this think if that year. million number year, thought to a next it? it should Is right that you're way the to about be the

Joel Ackerman

Yes.

certainly next zero. to OI scenario there uncertainty went was So year, but look where a some the remains for there

thinking the would shape So relative much better a That that feel that's nonrecurring is we way is I'd have thing highlight I because reimbursement important permanent. of for guess, about is called one we're the going which of and something nature to we're say midpoint that, said, OI calcimimetics like forward, TDAPA and the period reasonable as I'd in it call we TDAPA I range. XX-ish of out the not

would the core calling our OI As to stop be the calcimimetics consider this generating permanent next We're because out earning part It's of from our bundle. business. power to OI are it in the enters and going become will the we core mind that part my bundle permanent a year, of now it of funding. it of I has component

Javier Rodriguez

a reason the And in going is Joel you point Kevin, and I'll exact for have range to will a don't number, have just have ASP a number precise we we because clear not add we adjust The QX why with some. bit it's one amount don't case and CMS give is estimate. of an an

Kevin Fischbeck

headwind. makes sort And in it next half Okay. will because half guess all year, a year. will spread that throughout this tailwind in year, year front-end the out it be But think loaded That way back will the be year-over-year be next of a it is about sense. the the of, uniformly of to it I first

Joel Ackerman

it. way think I think to good that's about a

Kevin Fischbeck

it clear then wasn't The exactly. All -- last right. to me maybe question. And

mix the commercial strong. was why about mentioned You

Why be than job getting least were your patients expect? the you it so been go I loss at COBRA to makes would up But be me. what coverage over about has would maybe the other buying for back some than the think you things loss and made like patients that. some other comments alternative Can that signing of impactful case less at job you far less you there? around comments -- and it would that sense your that to

Joel Ackerman

Sure.

mix. three unemployment one question So affecting are is them. dynamics of The there

exactly things call leans things government of is highlighted the than it our is me commercial because population less population like let our towards mix we're lower job the or travel. what loss we more things. employment So One in education seeing three is And tackle to like and towards in think averages. hospitality we and that and not what national that. And

sectors patients economic been have less the effects of employees, our impacted our So COVID. work in that by the

one. number that's So

of the of lot that in population furloughs of losses result rather we lot those unemployment saw reversed. have job and was than a Second our the

a they lost So to those coverage and work. back at their worked coverage, have as commercial they're be employer-based patients expect or third our And never coverage to back seeing COBRA have or now work through lost And because Recession at maintain exchanges. either the hard they during their patients the that a what commercial and alternative rate higher exist, exchanges have than don't seen in the we've happening exchanges, we're lot at experience historically. That with we said, historical Great didn't of XXXX. XXXX

-- and think, actually unemployment. why that's commercial So a point of mix decline be to also because than be tend to younger. on less beneficial older younger to are the I -- tend patients to older we're the that, in out would why commercial a seeing related patients is that's mix mortality we're And short-term, patients government higher passing commercial patients. away at rate we

transplanted, than And a higher helping. in get the that's So at patients transplants much decline helping. Commercial also rate is government then patients.

Javier Rodriguez

to like insurance it. keep work and one part that it patient, talking reinforced overarching commercial just much to learned, how that commercial our in their we've with important is patients thing our value really hard and they has how I'd Kevin, state that an

has And this an so been takeaway absolute that clear from period.

Kevin Fischbeck

Thanks. right. Great. All

Javier Rodriguez

Thank you.

Operator

from is Mok from question next Barclays. Andrew you. Thank The

Your open. now line is

Andrew Mok

Thanks afternoon. question. for Good Hi. the

doing patient enrolment what's on, of Medicare patients we what in the you're awareness the Thanks. have open full level traditional Medicare topic? to And wanted Medicare are efforts plan private to among this season they're approach some fall? as the that a this Advantage, education enrol relatedly, Just going to option your the on follow-up

Javier Rodriguez

Yes.

unbiased grab have that that up population really and is the person. objective people with And each any me hard uninformed customized speed range we're that -- to what one. from working it. The is to do are new wide to and to the as completely are in on to the you that information totally expect people would training, Let flow anything is

depending a personal good in coverage, for you as insurance where or one other, be it the you what's secondary have So perspective, your at can not family look might needs from are person for what you your good life. are, insurance your what or because on

what's our a the main pick balanced is And is are right for that base for pretty to actually so choices And them perspective place. the aware and over gets knowledge much objective their people them. all have of to

Andrew Mok

Got of it, the And to and management how and quarter, the then okay put QX? you just strong productivity Thanks. you is some wanted you on follow G&A around saw in can XXXX? the in numbers gains think into up that some sustainable, of cost much heading

Joel Ackerman

Yes.

half to The nothing that the So out at of G&A back half two that. call in I'd one I'd the that unusual put that's out -- some that I of on that there's going -- beginning I bridge But half year. things. call. the that of back the a particular, either call there's out in And nothing of there's the back some over I'd of on other than pointed little maybe we're a give there's those say, -- bit of question whether on

Andrew Mok

Okay. Thanks.

Operator

The Lake from you. question Justin Wolfe from next Thank is Research.

Your line is open. now

Justin Lake

Thanks question. Good Thanks. the afternoon. for

the networks? you have out at -- little they their or on the whether to to don't products in might out think, Medicare that XXXX that the more If of of one how you mid-October. publish just previous was And Advantage the put Javier, networks, First, least? Wouldn't network they -- were at at know know you're point call. its by next their for I point, by you surprised I understanding networks look not have a my plans questions your when answered saying MA

Javier Rodriguez

Justin. correct, absolutely you're Yes

surprised, is is behave I to the period answering sustainability So but is it that. anything was maybe how by well thought don't then changes. how not answering I of was anticipate over will changing. of think I don't an networks, could what I change going What see I answering would a extended I will macro be anticipate time. we different it be understand time. that, there's was which I I you question the short-term major In And over

Justin Lake

Got it.

and given a there's So into the don't in removed you some given from over XXXX, of XXXX in be terms there being takeaway we is the think in how evaluation design? DaVita are already, likelihood of conversations network could much late, network your and time for and Advantage pricing XXXX. But year Medicare

Javier Rodriguez

backs, I won't Yes. part portfolio significant I have but said differently the or you some of a add mean, have anything. you

will that so time. play And over

have in and be clarity. a are in your of that the two be you month so you network the in assumptions And fall, will you we could then as know, the correct out can or in But network. later you fall

how know holding network the much in future. bank can statement don't I on for you that So fall

Justin Lake

to give if I Thanks. that's revenue was Joel, your per And it. the sequentially. looking significantly like wanted ask much I -- missed up and Got treatment pretty calcimimetics but us this, you with then, Can declining. its I detail about apologize as

and focus So the sequential that key increase? ex-calcimimetics, number want kind there us you what's And the to drivers the what on? are of

Joel Ackerman

Sure.

RPT through debt think $X. between that of by biggest with So, patients lower and is coinsurance of that far deductibles the associated flowing and some And those, We're talking $X change. lot A ex-calcimimetics bad quarter-over-quarter is it's seasonal. and factor.

a I'd just is a and seasonal stuff around mix pricing. mostly of mix little of say, some, and MA commercial other typical bit bouncing The impact. It's

Javier Rodriguez

sequestration Yes. Joel, add as that would there's well. a to there only in I is, little thing the

Joel Ackerman

Javier. that. forgot Yes. about Yes. I you, Thank

Justin Lake

Yes, me too.

-- a that's So

Joel Ackerman

to the backed clear, just the be out I am I number sequestration. Justin, sorry, gave

$X $X.X. So is Sequestration that was worth without sequestration. about to $X

Justin Lake

topic. calcimimetics Okay. Since, what was worth? on And this we're

Joel Ackerman

someone me know, to was going I that. ask

get think was you I number. exact $X.XX although, it that I'll

Justin Lake

that Is profit? revenue or

Joel Ackerman

of a to number. went in $XX so a QX The decline million $X.XX dollar calcimimetics $X.XX the so from $X.X result RPT. from $X, went The as $XX Ignore OI, calcimimetics in number sorry. from to the I'm No, QX. about million RPT

Justin Lake

Okay. terms commercial and And to this, overall growth have do terms to mix was commercial in $X of then, you're much mix of $X? in growth? mix flat was commercial therefore treatment patient similar didn't to and growth, And with saying patient that

Joel Ackerman

Right.

Justin Lake

should XQ we do this jump think -- a of And for about? ex-calcimimetics? this number that this is off is a a number to Is you XQ, good reasonable think

Joel Ackerman

think, year. you'll to that I negative although, point, see starting next seasonality see reasonable that QX, a is it in think you'd I expect

a rate, don't of it quarters. annual as for couple run number use it So but the use next an as

Justin Lake

the Okay, in great. queue. back I’ll Thanks. jump

Operator

Thank Mayo next from is Whit The UBS. you. from question

Your is now open. line

Whit Mayo

in Thanks. growth I'm quarter. implied still the trying my to around core head wrap the

into guys now, have as usually your a you at original And that's much set visibility a of expenses, plan. higher. tremendous the lot You looking we're number

it certainly better. much got imply to something that So seems

core really kind it up I is, calcimimetics the everything out sequester, X% I'm net that the OI in to implies, out, my was So we by as COVID you've cost mean, what curious year-over-year. because laid of math, that

below cost original just year? I'm meaningfully again. a were point this the structure into in else your So that has you to to anything crack at a what standpoint can take come there trying coming from Is that expectations

Joel Ackerman

we volume to better than expected. than the try being by I productivity than unusual expected. if is explain being There's The numbers core and a first, a Whit, business to nothing bit a were So, why bit better, expected, that's we RPT core here. performing margin. to offset what well. we point better -- Facility light. it's bit are business bit better all are a little but would fair costs is I the

good largely of cost think margin management. core by driven So,

Whit Mayo

I there fairly way presume I'm to the and have the internally uptake? their presume numbers data Is patients the around of And it's your my put head I Okay. because lot mean, either of rate COBRA any sort around wrap high. or into conversion around exchange trying you coverage. that I just to COBRA, a

So, the a maybe I just question. directly little bit thought, ask I'd more

Javier Rodriguez

question the But it where spike we have do in in in will that a COBRA months the some don't asking at to is, in get to think looked what you're that date or to detail. in you're that disclose XX I big I going? trying Is fair directionally you're roost. come we future

Whit Mayo

and concerned. I them a think been buying mix debate and is be they of dependent isn't so at lot alternative a you actually COBRA. mean, is very patients I in think commercial high find great percent to -- of coverage candid that you're on the number the my all. And have I No these marketplace have premise your point that that people through the perfectly have a options that

actually totally was So -- opposite. the it premise the was

Javier Rodriguez

Yes.

relies I it's I an population what I is think what that -- which incredible say is business patient you're way. what consistent in we said would on and think earlier our Yes, to saying.

with work. keep patients We have to loss, job one the many way have we have out And and in again that than the that have a the patients seen that working another. less passion been coverage or anticipated are had very impressed ones permanent back versus our to there's commercial that Joel good a said, their coverage. And we had loss between were number which are of then as big permanent job that furloughed of alternative furloughed was our chunk distinction

the I covers spectrum that, whole there. think

Whit Mayo

mean prior And mean and OMB and question there ask is at maybe forever. the No perhaps industry? for impossible under this mean a Javier I it's been sitting obviously, if DaVita an one itself the who about the this. has charitable out just the smart be it. all but about skeptical is. what premium last administration idea is on policy it would we we're administration thought on the general that was knows, rule be maybe And I what that Biden have hear mean? talked option just Medicare I'd what one rarely calls no these like helpful. hypothetical of But Biden to enough status curious I'd thoughts more revives your to public I expansion I

Javier Rodriguez

done the relates question both can Democrats obviously goes we Yes. driver both and they're a or tax we've be because issue our one change It's if will that whether about. talking a to to job have In Republican as big to sure is the sides. -- administration we of a Biden it do Senate biggest that what of policy great policy. able decent of there tax probably a is talked the whether think try you we're also not and and across general, I that to is we've one mean, make

continuing to you and you in and said change patients a what we care White for as care health relates much a regardless as for we to of policy, course bigger want the lift integrated it advocate push to As But of will know, House. be it and is part it. do our is of to a who's --

Whit Mayo

Okay. Thanks, a lot.

Javier Rodriguez

Thank you.

Operator

JPMorgan. from Taylor Gary from is question Next

Your is now open. line

Gary Taylor

laid topic to ways see if amazing been you go up an out XQ I on I back But quarter get a didn't expense and out up like different more wanted Obviously, is quarters. amazing management few certainly think costs $X.XX sequentially. can cost to last management I'll just ask is asked $XXX bit incremental million that's $XX one turning treatment little the when patient come be about expenses, it to maybe had COVID help. to little of which a would job care an a different a

heard the we positive to some you were little fair productivity facility know sort a set even up think of and had the would kind paying comments just teammates I talk more the your of about I COVID the number shifts month the $XXX and of isolate productivity an split benefits. guess, the extra to a patients. it's costs of period of I've opposite suspected time health about a source So could I for of productivity? you a

a guess and was quarter the the productivity yet orientation, So going this you've is really, well. to be of I opposite strong really really whole performed

you're health some employees several was what productivity of health just quite care piece how of know costs? benefits consuming And this just your maybe asked material. I less own So times. and examples the sort you've facility that and finding been was

incremental would forward. help anything think just about modeling us of just sort going So

Javier Rodriguez

Yes. There's the situation. of management going and proud we're lot on cost a very Gary

helpful So things. let there several because me as to possible as try be are

teammates else benefits a on on used less care our yes everybody First health clarification expenditures like our just non-essential care.

purpose felt of passionate sense had patients. really so obligation caregivers' our that two take Number less therefore one. because people care and is of sense was of our turnover to that we So

were the had our training And last teammates positive. and lay combination say to people that many the of expense. a thing is there of and patients while job, off the economic so our And also commitment that would were appreciating so need were I COVID sense and that furloughed some less then of

like New basically And so up doing places and to really others was premium. ended some in a what where York have is staffing we having at

you centers, were alluding cetera once we full when which you're anticipated, to shifts be as as et tended And sometimes cohorted because is earlier anticipated. not inefficient than those more those what shifts so to

you though really it. shift or When two one And it's so cohorted, it's have positive patients you if have not a COVID inefficient. even when full is it's inefficient in

the and all. in And to so quarter manage very trying over were we compounded the math cumulative diligent it

Gary Taylor

ones. That's quick helpful. Two more

to issue? had legal color there been that million this your issue $XX related that Or the in disclosed on liability On was legal was other historically charge any is Or professional that? any filings?

Joel Ackerman

that to hanging Yes, one bunch for litigation was a there Gary. I'll been take related related It to shareholder of out CPA. that's years

settling appropriate, Our clean on thought just view but worth did is what we move it and was to was this. this up we

that to related issue. it's So

Gary Taylor

X.X% calendar just treatment of driving number Thank difference the day just forgot think XX.X, that don't the divestitures. isn't per treatments and me. same and days between in for your your increase I been XX.X normalized one last X.X% exact you. the so I've there's when And And then you have

So square difference? I'm we just trying that to recall how

Joel Ackerman

first big associated of And the deconsolidated one things, the out the and NAG, bps those is a other There's but And movement divestitures would don't I treatments we are year. bunch think we that of which back there, had the them with but some about we that's bunch as difference. count. highlight of of worth out I Yes. back would XX is treatment of of a of we there noise clinics that that

Gary Taylor

you. Thank Okay.

Operator

question Thank from you. from is William next Matt The Larew Blair.

open. now Your line is

Matt Larew

bit to about afternoon. ask little Good wanted I the a Hi. footprint.

happens going on heard the you of build, the and said maybe quarter what with happens I XX number, new to footprint of industry volumes of that think of think maybe I And then added see lot in on. obviously centers. of kind first there's rationalization the a of terms wait on on years OUS a terms stagnant and I couple we side, know a home in and that what after

U.S. the both new on in centers terms development and of update last Maybe You've OUS OUS an now quarters. side? just the in added four about XX

Joel Ackerman

Javier. take I'll Yes. one that

a action indicator, on as CMS. side lagging on U.S. So depends there we expect, the get because bit certified when would number it the most a of is the of is by you

more completed number see we wanted to you on decision-making clinics with when that you'd call lower. what be and that the number, the carefully tracked certificate are CapEx the of and If about think occupancy, it much a would number a based

how to number next understand capacity for a think And going I and don't to see being forward you'll doing come but So people capital way range give want that efficient. of we're down terms want again. building year, yet, in I

driven the issue. be the going clinic think the of and which It's disclosed disclosed. And that's indicator tend that this historically. clinics, clinic historically that aren't to to fact number by than is we've the in by timing that we've home-only more also building I that development partly be a number better CapEx count driven cheaper we're

associated we of more the delay as COVID partly, to There an be come a down NAG home. in But made think on deliver So would. as de message is the continues efficiency, NAG in the what to capital decline novo I COVID. to to to continuing context we kind build of move around we're because said relative down because partly, we comes temporary the we with just hard additional clinics commitment could of it's

Matt Larew

of different like commercial? I guess, amongst patients and classes of treatments. mentioned wanted did during in to missed with just patterns patients tend that bit this payer do missed period made then you about helpful. know higher that in you it. And much to classes? be discrepancies commercial treatments does terms Medicare lower have visit I I the amongst tend just the higher terms to missed a what Got ask comment look wasn't around payer transplants. what population That's treatments see for little you in But

Javier Rodriguez

very them then we didn't Yes. taking went that patients out they the who missed of hospital. able by fact are we class. the virus during meaning taking were seriously about this themselves take one very the treatments that our break care were happy But outside it to down of of care things of and are the We payer that period,

I don't that chronic say have certainty would that our But was math it classes, were the very for way. class. population that down general, hospitalizations a all across the happy I went so, that divide to the but works in I to didn't way payer with in know we by it And math see significant -- because payer

Matt Larew

progressed terms then there I just in from you're about but of has terms as And and curious bit, setting, throughout your seeing half change hospital know COVID of in any patients you the a what anything changed origin referral COVID, was see hospital quarter? visit normally dialysis in Or origination? the little patterns start have

Javier Rodriguez

meaning change center So first. there's way get come. going short and that less a a I think we patients your change into in And hospital patients question that our is our change crashers if we the the the not into our seen have that way answer noticeable the is

Matt Larew

Thanks. Fair Okay. enough.

Javier Rodriguez

Thank you.

Operator

Kevin Fischbeck is Bank The from Thank question next from of you. America.

is line Your open. now

Kevin Fischbeck

Hey.

COVID you guess of Just sounds purely thing were a more continuation at we've to X.X% the the the and we'll certainly couple you visibility end quarter. things. to your times. you're much and temporary ago, a for of been amount get that back have guidance last you decline at years guess confident first a and few this? this rate. like I years related for a seeing least a the X.X%? this A you you've had obviously in of of taken few higher couple couple growth low Is of that What below It a that for I down do not the quarters. are on How follow-up treatment a is of that

Javier Rodriguez

give don't attest is assumptions variables? why And of variables. little because then the there a Kevin, interplay the you Yes. want can, if you an to I several of you

nonessential volume we've mortality in -- more so acute delayed. of told the is went And in and that's essence treatments care the would The as quarter the what down skewed obviously in happen mind population. increase. older acute And being toward because our it you,

saw nuanced kidneys our to it's came that think high failed So absolutely is a is dialysis are remaining go incidents nephrologist off The just that. our level that function? dialysis." decrease in that we missed better reality your and so in have no temporarily So talked that have was That course we a And in go was to patient you increase and on pandemic related. right off then "Is tend renal because it to make that COVID we your think "Okay down patients saw saw obviously decrease. transplants about, we as and So shut little as travel our they're new We essence renal down of an treatments new a saw you which restrictions. you transplants incidents sometimes to than already of -- because now so -- we a start has some the nephrologist starting then do function with were of better decision during therapy. And to it volume. the that offset to talked an But visitors also we better saying more we some later?" you you

is and of net give we is over we that except our time. when the likely the mortality end, in of normalize on all you what So to expect assumption we over this impact time that back

Kevin Fischbeck

not it a higher that's fundamental be will you're response that seeing crash that of now, that in demand So just you sign we that that but makes question good that kind mean not think least to good Does all is than more would what that then the seeing? about last continues and at like you're are this all, in that patients see how patients sign sense. a if coming but then at

Javier Rodriguez

would telling obviously us nephrologists were telling are shut of a we're what that rounding Yes. hospitals. the for all while And the you that still And practices. our in most just care be the little speculative. practices their nonessential for I'm down about

what we're course you We're and our they is telling nephrologists talking to practices. of have from our And back what practices now dramatic So change. their that's that that any not just seen hearing are we're scientific. anticipating open not we're nephrology

Kevin Fischbeck

Is better reason better to away Got of there as expected. think because this how starts then more earlier I environment quarter headwinds you a one maintained go if keep year? to about it. don't come XXXX? a normal be that talked than to this productivity that gains operating in is productivity these COVID mentioned going? Can the And you into next productivity I has cannot guess coming think you

Javier Rodriguez

productivity Yes interesting. will be

some Of will benefit our up. go the up go expense People the doctor and of end things back course, back will to will away. going

As I the giving linked sense highly them. and training of that how to purpose and how it retention, feeling their we're expenses about to that economy relates will that's be think and and are job doing valuing the people

is so could the it And But what -- time. how an highly go general, be the back in linked economy was. to is that I and broader what it could could then would make to think stay you impacting doing it argument say and it I think it'll will you COVID

Kevin Fischbeck

Great. right. All Thanks.

Javier Rodriguez

Thank you.

Operator

Justin Thank Wolfe you. next The from from question is Lake Research.

is line now open. Your

Justin Lake

materially XQ versus XQ. pretty look few down One, here. follow-ups and A your corporate Thanks. ancillary Joel segments

anything note think those can how you if curious, there in to and the second Just about half? numbers

Joel Ackerman

Yes. on that. or I $XX am severance the in I'm to built trying trying QX. to QX was anything news had get there's in. about remember remember, charge and particular. I'll a We that was you if It if million,

Jim Gustafson

rates in from I'll in and little the answer international, that the a it benefit which the in other strategic it That Joel. exchange was bit swung QX and segment. initiatives large segment a QX was corporate is way. had

Joel Ackerman

$X positive -- of exchange in thank the through and Jim. you, had international million had foreign We in QX $XX that swung Yes. million appreciate quarter. it. negative a We I to second

Justin Lake

explains Great. it. Thanks. That

question Whit's -- obviously to around and the being back COBRA -- take then, So your exchange comments the greater. up on

is factor. pretty obviously, it's going like going than swing sounds Given a expected. better where the economy important it that's And

and of to it's So us numbers? kind just it you to even us is share where it would understand helpful Could where been historically, be now? round

Javier Rodriguez

and give commercial insurance? me I'm answering won't numbers, mix COBRA Are question I asking make let right the Well, of versus Yes. you Justin. you round other sure

Justin Lake

job this? signing people asking seen the been a of COBRA material other you've like lose what when said, -- there's exchanges in increase number in for I'm you up versus pretty their they the periods No.

Javier Rodriguez

I've of transplant. their variety cheapest reinforce now, including I'll that Yes. What it's, with believe getting I is of some a their odds instances family would that our in it right the and into said a what some the very commercial without And details obviously, coverage are coverage flexibility. keeping insurance just their patients getting for about enhances passionate reasons say most

carefully impacts health it they're in so, they those consume decisions care. nontrivial making much And as they since know life a so way their

Justin Lake

And headwinds then Joel, you tailwinds. gave XXXX

Joel Ackerman

Yes.

Justin Lake

And growth as mention tailwind to XXXX. a Advantage you accelerating didn't Medicare

shouldn't expect last it So we two so, impactful the I'm mean I to we've And is curious seen three in ramp year? you why be going don't years? your versus view to think or not? next that if it's what

Joel Ackerman

faster level we've happy MA are it There just our some think Advantage, in we've patients being consistent bit a Medicare will their as inertia. see think this I been year. about Well, had industry. enrollment. grow. of don't year. one massive of with just in It with But We enrollment inflection huge fee-for-service in little than We point a pretty uptake coverage. the we this others is different could view XXXX grow Medicare And a we is don't to continue lot which see next think we've what said

Justin Lake

I plus? a and think a more. saying it's a in Right, really couple that And so basis a of have probably Got to you XXX that it few XXX big I years penetration like to going we've XXX are massive be point typical expected more think like year, little increase pretty just maybe to percent last it. the be between uptake in increase seen what some relative what might to looks the think you delta there's

Javier Rodriguez

Yes.

roughly in, around as is in tell you population. XX% this information have What do can me picking, MA patients Justin. jump Medicare much because Let of you have we the our are on we're as we

I a do, but have number is industry probably tells around better XX%. the You than

been it's and it is we say, a gradual patient uninformed. what so a will quarter-over-quarter more patient population And Are status think And get there's and it one There's for so likes we some the to population XX% we than said to we've year in be enrollment? of that XX%? that everybody underestimate that's consistently quo, have said don't today think continues that more be going gradual that to inertia. of more dynamics will

unknown. product interest like with people in switching, my If be product you or they there say, better don't fear have though I'm a for I product, well, even because might satisfied the me. just and my many

of that some where lot But and are just what was be there's will going change people time for hard it the going they out. it And up. change be a to that that's And saying be could it play and and be so, while saying was we more was we way we there sure gradual a we're could is a will to ramp to we think very that fast don't very, the want think be wrong. right, make quick

Justin Lake

Okay. the Thanks for color, guys.

Javier Rodriguez

Justin. you, Thank

Operator

is Thank you. The next Deutsche question from Pito Chickering from Bank.

now Your line open. is

Pito Chickering

of stable it remind for I'll follow-up. to the was your XQ? this brief you Can what has during for commercial keep relatively far? time. so Thanks And been pricing guys. the due us XXXX Hey,

Javier Rodriguez

what pricing? the commercial is sorry, I'm question on

Pito Chickering

tell Can far seen XXXX? you commercial in XQ? has us the fairly -- commercial you've been was? Did so pricing pricing in what in could what And it you increase stable

Javier Rodriguez

Yes. There's on pricing. out nothing call to our commercial

Pito Chickering

Okay. How much came shifting people productivity that guys you setting? XQ the in saw from home into

Javier Rodriguez

answer that? the Joel, -- that. I mean, to do know the don't I general know in you answer to

Joel Ackerman

Yes.

productivity we're the into basis. not going think changes of nuances quarter-to-quarter get to a I on

I good the get detail. we're job trying cost core in It's of driving a think we to is to but don't we're message deliver into management. think going do level good continue that I to the margins on

Pito Chickering

If we the guys in in the about guess a of opening eventually are as I flow on want through where terms is of going. I may what's clinics target that's XXXX of, think call, where last these between To here up XX XQ. Okay. your point sort things this you to And probably clinics indicator asked and one right lagging split centers during the home earlier have split then clinics? standard opened into

Javier Rodriguez

have the roughly XX-XX between in-center is next Joel centers. number year on and not do number but growth that for honest I our our here, me keep in home

Joel Ackerman

That is correct.

Pito Chickering

appreciate Perfect. time. Thanks, I much. guys your very

Joel Ackerman

Thank you, Pito.

Operator

Thank next from you. Mayo Whit The is question from UBS.

now is line open. Your

Whit Mayo

Thanks.

more off. e-mails the quarter And I've because guys $X.XX. to one us the $X.XX. several per calculated have on You for out treatment. in to $X reported being just had revenue we're down take you the I've got cut topic $X.XX calcimimetics of I sequester maybe

So down the same quarter I'm and to did getting $X.XX. it $X.XX math you was last

first So quarter $X in of quarter. the growth second versus you've the got

when incremental reflect So there's I What is improvement? if guess year. your is in question quarter. not largely flat pricing much on we seasonality the mix the first that commercial back versus I prior mean drove the historically that

just influencing So there's else trying be anything number that if up? to that out flesh might

Joel Ackerman

Yes.

seasonality. it Whit is So largely

I bad say about this because is seeing say a spot of dynamics. fluctuations. we're little I'd some balance your normal year But seasonality I on more that pretty math $X two-thirds think is would debt of is and bit seasonality. The

Whit Mayo

this bad a guess want their maybe that what say more understand deductible? already So mean run little exactly I debt I when have patients does to through bit -- you

Joel Ackerman

Yes.

It's expect their and some think. are through run it through bad what exactly other dynamics debt. coinsurance is. there in that exactly I patients what That's their and As you'd play deductibles

Whit Mayo

Okay.

But other unusual anything settlements or Okay. like -- payer that no

Joel Ackerman

think modeling use of before It reasonable the asked answer call else out. your is think I -- me And for RPT the the was to to I start a year? Justin Nothing is rest to yes. this

Whit Mayo

clarification. the for Thanks

Operator

time this don't speakers, any At we have questions on you. queue. Thank

Javier Rodriguez

in care forward let finish want team. the Well, non-stop the for me thank I just They and the with reiterate you of how proud the the let accomplishment me statements. all you thank interest questions number core again to one, safe. the I quarter. stay continuum and care Number strong. hospital and capabilities thing. beautiful our we a next two And our to make continue is is advance look in-center. We business Be well you and Number three of company am are and three for great speaking it and working the strides to to home on across to

Operator

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

may You now disconnect.