Last week DVA reported an EPS beat of $0.22 and an in line quarter. If you are an algorithm quietly purring away in the basement of a Connecticut office building, those numbers are satisfactory. What the algo does not know, however, is that mortality among people with diabetes and renal disease remains elevated. About 60% of patients who enter dialysis treatment have diabetes.
Deaths coded with "Nephritis, nephrotic syndrome and nephrosis, N00-N07,N17-N19,N25-N27" include people with renal failure as well as Chronic Kidney Disease. Deaths from these conditions began to separate from baseline in spring/summer 2021. It is a curious pattern with no explanation from the CDC as of yet.
The excess death trend is daunting. Under normal circumstances - if such a thing were ever to exists - we would expect to see deaths pulled forward as the varying impacts of COVID, delayed care, and isolation took their toll. Later, those deaths pulled forward in time should result in excess deaths below the baseline. That is certainly the pattern exhibited with Alzheimer's deaths.
Instead, we see a seasonal trend - more death in winter, less in summer, but still abnormally high relative to the baseline.
The answer may lie in the low treatments per patient per week. It improved slightly in 2Q but remains at around 2.5, lower than the recommended 3.0. The company acknowledged that more than the usual amount of travel is now required for patients which can result in missed appointments.
The company rightly pointed out that mortality is a major consideration in forming their outlook. Expectations for a return in volume growth in 2023 are now in question.
With the leverage ratio approaching 4.00x, and volumes in doubt, it is time to wonder what the creditors are thinking.
Let me know what you think.
Emily Evans
Managing Director – Health Policy
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