Detailed narrative
Clinical Innovation and Standard of Care
DaVita is actively advancing the standard of care by expanding access to middle molecule clearance therapies. The MOTheR clinical trial demonstrated expanded HD using medium cutoff dialyzers is non-inferior to HDF, offering an evidence-based option for physicians. The recent FDA approval of new expanded HD dialyzers from NIPRO, coupled with secured supply, enables broad deployment across DaVita's network in coming quarters, leveraging existing machines without significant capital investment.
ESRD Proposed Rule and Policy Impact
CMS's proposed rule for 2027 includes a complex rate increase that tracks below industry cost trends, prompting DaVita to provide feedback for a more reflective final rule. The company supports the inclusion of phosphate binders in the dialysis bundle, which has already reduced estimated government spend by nearly $500 million. They also support concluding the TDAPA period after two years, with the post-TDAPA rate adjustment being appropriate, though the final financial impact for 2027 depends on the bundle update.
Volume Growth Trajectory
The company experienced continued acceleration in year-over-year treatment volume growth, slightly exceeding expectations due to sustained improvements in patient mortality. This clinical performance is a key driver for volume expansion, with the company now expecting 2026 total treatment growth near the top end of its 25 to 50 basis points guidance range, translating to 50 to 75 basis points when normalized for📎 calendar impacts.
Revenue Per Treatment Dynamics
Revenue per treatment saw a sequential decline of approximately $2, primarily influenced by a lower commercial mix due to expiring ACA subsidies and reduced sequential revenue from phosphate binders. Despite these headwinds, year-to-date RPT was up 3.6% versus H1 2025, and the company maintains its full-year RPT growth guidance of 1% to 2%, anticipating slightly negative growth in H2 2026 due to ongoing mix shifts and lower phosphate binder revenue.
Cost Management and Efficiency
Patient care costs per treatment declined approximately $3 sequentially, benefiting from operating leverage on labor and increased treatment volume, alongside lower phosphate binder costs. While year-to-date PCCs grew over 3% versus H1 2025, deceleration is expected in the back half of the year driven by decreasing phosphate binder expenses and lower facility maintenance spend. Total cost per treatment is projected to grow between 1.25% and 2.25% for the full year.
Integrated Kidney Care (IKC) Performance
The IKC segment delivered strong performance, with $40 million in adjusted operating income, exceeding expectations for the quarter primarily due to revenue recognition timing. Management remains confident in IKC's contribution, expecting it to add approximately $20 million to full-year enterprise adjusted operating income growth, with continued long-term growth potential driven by increasing lives and dollars under management.