A health care industry analyst has made a prediction for 2013 that American companies like Denver-based DaVita, the second largest provider of dialysis services in the United States, may be best positioned to “benefit from changes in the health care market stemming from Obamacare.”
In early January, Martin Brunninger, head of the medical technology sector at Nomura Securities, told a CNBC cable audience that because 70 percent of the dialysis care market is dominated by two big players (DaVita and Germany’s Fresenius), “we have efficiency gains and there’s not much more earnings power in the U.S. sector.”
Brunninger said that if one company moves away strictly from dialysis care, however, that company likely would enjoy an advantage. “DaVita has diversified away and they have a broader approach now in saving managed dollars for broader patient populations,” he added. “I think that is the future.”
On November 1, 2012, HealthCare Partners merged into a subsidiary of DaVita’s parent company. The parent company changed its name to DaVita HealthCare Partners Inc. HealthCare Partners, now one of the two main operating divisions of DaVita HealthCare Partners, with operations in southern California, central Florida, southern Nevada, and northern New Mexico, assumes clinical and economic accountability and management responsibility for nearly all of the health care needs of a patient population. This includes offering professional services provided by primary care and specialty physicians as well as coordinating hospital and other services, the company noted.
In addition, the DaVita subsidiary runs the first and largest pharmacy dedicated to serving the unique needs of kidney patients. In 2012, DaVita Rx expanded its services to help manage patient medications and clinical outcomes. DaVita recently agreed to provide certain pharmacy services to Fresenius Medical Care, which will use DaVita Rx prescription drug services for its Medicare patients in the United States.
DaVita also announced in an unrelated transaction that it will extend its supply agreement with Fresenius Medical Care for certain dialysis supplies including hemodialysis machines and disposable products.
DaVita Rx also focuses on patient compliance by providing refill reminders, reviews for possible drug interactions, and other services, with the aim of healthier patients who have an improved quality of life.
With provisions of the Affordable Care Act slated to take effect within the coming year, DaVita’s move toward serving broader populations may help the firm capitalize on moves toward managed care, Brunninger said.
As health care systems around the world keep moving toward lower spending on increasing numbers of patients, “it doesn’t necessarily mean the quality needs to be diminished,” Brunninger said. “It’s about management and where the profits are going.”