DaVita (DVA) UBS Global Healthcare Conference summary

Operating performance and investment

• International operations tracking expectations, supporting ~1% operating income growth; integrated kidney care (IKC) expected to contribute ~2% in 2026 versus its usual ~1%.

• U.S. dialysis volume is growing in 2026 and revenue per treatment is stronger than expected; cost pressure, especially G&A and IT, is the main headwind.

• IT spending has grown >20% annually for four years; spending will keep rising in 2027, but growth is expected to decelerate from the 20% range.

• IKC's shared-savings model is viewed as sustainable; the new Humana CKD relationship is expected to weigh on economics in 2H 2026 and 1H 2027 as costs precede revenue.

Policy and reimbursement

• Reversing the effect of enhanced premium tax credits could improve payer mix, revenue per treatment and earnings; exchange coverage retention is a key variable to monitor.

• Management argues charitable premium assistance helps patients maintain coverage, often through Medicare or Medicare Advantage, and that eliminating it could raise government costs without advancing competition or innovation.

• The 2027 ESRD rule's 3.5% LDO increase applies to Q1; ~0.4 percentage points remain fixed through the year, while the 3.1% TDAPA portion may change with drug add-on payments.

• Estimated full-year 2027 Medicare rate increase is 1.5%-2%; uncertainty centers on TDAPA add-on calculations using lagged ASP and volume data.

• Binder payment remains fixed in 2027 and is expected to become part of the bundle in 2028; DefenCath-related reimbursement could decline after Q1 2027, creating a revenue headwind without a corresponding cost reduction.

2027 outlook and cost actions

• 2027 revenue per treatment faces Medicare underfunding and an estimated $70M commercial-mix headwind from enhanced premium tax credit expiration, following a $40M impact absorbed in 2026.

• Exchange-mix pressure is delayed because existing patients often retain coverage; new dialysis admissions are arriving with lower commercial mix, and many patients shifting off exchanges move to Medicare or Medicare Advantage.

• Management expects 2027 volume growth to improve from 2026 and sees a path back to 2%+ growth by 2029; pharma savings are expected to help offset mix pressure.

• Pharmaceutical savings opportunities include contracting, generic conversion, mix changes and dosing modifications; AI-supported prescribing protocols aim to support both clinical care and cost reduction.

• Commercial and Medicare Advantage rate increases remain broadly in line with recent years; 2027 TDAPA dynamics are expected to primarily affect Medicare fee-for-service.