DVA - Is DaVita a Buy?
Dialysis is the process of using a medical circulation device (either at home or at a clinic) to substitute kidney functions for patients with end-stage kidney failure. Each year, over 100,000 Americans with new cases of renal failure visit dialysis clinics to receive appropriate treatment. The cost of this care has been fully covered by Medicare for all patients since the Nixon administration.
Since the full cost of dialysis treatments is reimbursed by the U.S. government, a wave of providers has moved to capitalize on the opportunity. One such company is DaVita (NYSE: DVA), which treats about 200,000 patients in the U.S. annually. The company is an enticing investment idea because it's been classified as an essential service provider during the COVID-19 pandemic and has its core revenues protected.
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The main risk surrounding the company is potential fatalities at dialysis centers due to COVID-19. Unfortunately, dialysis patients are classified as high-risk because many of them are immunosuppressed. Although DaVita has moved a large number of its patients to at-home care, there have been reports of COVID-19-related patient deaths at dialysis centers nationwide.