DaVita income grows 2% in Q1 2016

DaVita HealthCare Partners Inc. reported that adjusted net income for the first quarter of 2016 rose almost 2% to $190 million, or $0.92 per share, compared to $187 million, or $0.86 per share in the same quarter last year. The income excludes a goodwill impairment charge, and an estimated accrual for damages and liabilities associated with the HealthCare Partners Nevada hospice business, all net of tax. Net income attributable for the quarter including these items was $97 million, or $0.47 per share.

As a result of continued underperformance in recent quarters and further analyses performed during the first quarter, the company said it has recognized an additional goodwill impairment charge of $77 million for one HealthCare Partners reporting unit.

Total U.S. dialysis treatments for the first quarter of 2016 were 6,639,874, or 85,236 treatments per day, representing a per day increase of 4.3% over the first quarter of 2015. Normalized non-acquired treatment growth in the first quarter of 2016 as compared to the first quarter of 2015 was 4.1%.

As of March 31, 2016, DaVita provided dialysis services to approximately 192,000 patients at 2,402 outpatient dialysis centers, of which 2,278 centers are located in the United States and 124 centers are located in ten countries outside of the United States. During the first quarter of 2016, DaVita 30 new dialysis centers and closed four dialysis centers in the United States. The company also acquired one dialysis center and opened five new dialysis center outside of the United States.

The company still expects operating income for Kidney Care for 2016 to be in the range of $1.625 billion to $1.725 billion.

“The primary reason for leaving our guidance unchanged is driven by some economic uncertainties surrounding the exchange plans of the [Affordable Care Act],” Javier J. Rodriguez - Chief Executive Officer, of Davita Kidney Care said during an earnings call.

“… The regulatory environment around exchanges is still being built, Rodriguez said. “While many payers are living up to the spirit of the ACA, others are changing their fine print in their plan designs to avoid paying for expensive chronic diseases either by cost shifting to the patient or by making the plans unattractive for the expense of chronically ill in other ways ... This is a complicated issue which will require regulatory environment. As you know, it happens to be a tough year because of the election and many are distracted. Therefore, the dynamics around enforcement are hard for us to predict.” -by Rebecca Zumoff