Playing defense with Davita [DVA]
catalyst:
Kidney Community Applauds Senate for Passage of End Stage Renal Disease (ESRD) Improvements
Posted : Thu, 10 Jul 2008 16:22:01 GMT
Author : Kidney Care Partners
Category : Press Release
earthtimes.org
WASHINGTON, July 10 DC-KCP-Senate-bill
Legislation Significantly Improves Kidney Care in America--Increased Kidney Care Education and Updates for Kidney Dialysis Benefit
WASHINGTON, July 10 /PRNewswire-USNewswire/ -- In response to the passage of the Medicare bill (H.R. 6331) yesterday, Kidney Care Partners (KCP) -- an alliance of patient advocates, dialysis professionals, care providers and manufacturers working together to improve quality of care for individuals with kidney disease and kidney failure -- applauded the United States Senate for inclusion of vital End Stage Renal Disease (ESRD) provisions which recognize the importance of much needed reform surrounding the ESRD program for the hundreds of thousands of Americans suffering from kidney failure. Over 26 million Americans suffer from kidney disease -- and that number is climbing.
These important reforms of the kidney care benefit will improve kidney care for patients nationwide, including in our most vulnerable minority and rural communities. Specifically, these Medicare program improvements will:
-- Establish important education and prevention programs to help slow the progression of kidney disease and kidney failure;
-- Revise the payment methodology for ESRD treatment;
-- Provide an inflation update to account for critical staffing demands and services.
"On behalf of the kidney community and the Americans who rely on these provisions for their survival, we are extremely pleased that lawmakers voted to pass this much-needed legislation for kidney care in 2008," said Dr. Edward Jones, Chairman of KCP and practicing nephrologist. "It is imperative that the medical needs of chronic kidney disease patients be understood by our government and all Americans. Yesterday's actions are great strides for the community in an otherwise tough legislative environment, and we are committed to overcoming the challenges before us with regard to the growth of ESRD prevalence. We thank Congress for assisting us in this effort and look forward to working with Congress and the Administration over the months to come."
Each year, more than 100,000 Americans are diagnosed with ESRD and require dialysis or a kidney transplant in order to survive. Today, approximately 400,000 patients in the United States are living with kidney failure.
SOURCE Kidney Care Partners
And who nailed it in advance? Jim Cramer
Monday, 30 Jun 2008
Making Money Off Medicare
Posted By:Tom Brennan
Topics:Stock Picks | Stock Market
Sectors:Health Care | Health Care Equipment and Services
Companies:DaVita Inc. | Fresenius Medical Care Corporation
cnbc.com
Dialysis providers are one group that Cramer said could get a boost from an updated Medicare bill.
A current version of the bill – finally – provides these dialysis companies with annual base-rate and inflation-rate payment increases. Up until now, dialysis was one of the few groups without an annual update formula. The measure will offer better visibility – and earnings – going forward.
So which company’s most likely to benefit? Well, DaVita
DAVITA INC
DVA
56.67 3.70 +6.99%
NYSE
Quote | Chart | News | Profile
[DVA 56.67 3.70 (+6.99%) ] and Fresenius
FRESENIUS MEDICAL CARE AG & CO.
FMS
59.01 3.97 +7.21%
NYSE
Quote | Chart | News | Profile
[FMS 59.01 3.97 (+7.21%) ] together control 65% of the U.S. dialysis market, but Cramer leans toward the latter because of its overseas exposure. Both companies are great, and all dialysis providers will benefit from the bill, but Fresenius is clearly the best-of-breed stock here.
FMS is the only vertically integrated dialysis company in the world. It makes the tubes, supplements, drugs and machines in addition to putting them to use. This business model allows Fresenius access to countries where it doesn’t have facilities or permission to operate. (Some countries don’t allow private dialysis providers.)
The good news is that these countries are higher growth markets. The dialysis business in China is growing at 30% to 40%, and FMS has a presence there. The company’s set up shop in Europe, Latin America and the Asia Pacific region, too.
FMS trades at a premium to DaVita, but Cramer said that comes with the territory when you’re a more efficient company. Taking that premium into account, Fresenius should be worth $65 a share rather than its present price of just under $55.
And that’s not taking into account the earnings estimates Cramer thinks are too low. If those come up – and he’s betting they will – FMS stock should follow. |
