DaVita CEO Javier Rodriguez talks integrated kidney care, competitive threats and regulation

Back in spring 2019, Javier Rodriguez spoke with Fierce Healthcare about his new role as CEO of DaVita, disruptors in the kidney space and his company’s goal of moving beyond dialysis services and embracing integrated care.

But the healthcare industry of today is in a much different place than it was three years ago. The COVID-19 pandemic has forced many organizations to rewrite their playbooks and, particularly for those with vulnerable populations, adopt new care strategies to avoid dire outcomes.

But for all of those changes, DaVita and its business are still about the same size: roughly 70,000 employees and $11.4 billion in total revenue in 2019 to about 65,000 people and $11.6 billion in annual revenue by the end of 2021.

At the same time, Rodriguez said his company is still laser-focused on convenient, comprehensive services and ensuring inconvenient renal replacement therapies are a thing of the past.

“I’m really confident that in 10 years, you’ll look at kidney disease and say that it’s a model of healthcare that should be mimicked or copied because it absolutely is the leader,” he told Fierce Healthcare. "[We’ll take] a very vulnerable population from a health, resources, access [perspective], and give them unambiguous equity, meaning [services] close to the patient’s home, easy in and out, easy to pick whether to have it in the professional setting or home. I’m just really excited about all that.”

The company is also navigating many of the same strategic hurdles as in 2019, including challenges from innovative startups, shifting payment models and even scrutiny from antitrust regulators.

Fierce Healthcare recently caught up with Rodriguez for a 2022 update on innovation within the kidney care sector, competitive threats, whether recent regulatory actions limit DaVita’s opportunities for growth and more.  

Fierce Healthcare: How has the pandemic impacted DaVita and its patient population?

Javier Rodriguez: No. 1 for me, coming to work was a source of energy because I saw the best in people. I saw team dedication, I saw compassion, I saw people arm in arm making sure they’re working hard to keep our patients safe, so they can be counted on and be reliable for care.

Of course, our population is so vulnerable, so we had a lot of sadness, we had a lot of people passing. But again, the positive side of that was seeing people lock arm in arm and take care of them and one another.

We also saw a big commitment to community and responsibility. We were really energized to be able to vaccinate our patients, caregivers and members of the community. And during the time when things were not as clear when the government gave out the CARES Act, we looked introspectively and said, “What is the spirit of the money the government has given out?” We felt that money was for people in dire need, to keep their healthcare services afloat, and we were not in that need. We returned that roughly $250 million to be redeployed.

FH: Was the pandemic a roadblock in achieving DaVita’s strategic shift from dialysis to integrated kidney disease care?

JR: From the strategy perspective, we continued to push and lead the way, to say how can we service patients with any form of kidney disease at whatever stage they are in their journey. So that could be just finding out you have kidney disease, to your kidneys have failed and you need to see what the right modality is, and then of course if your kidneys have failed to see if we can get you in a journey of transplant.

We’re working really hard to connect all the sites of care and make it convenient for all the players, hospitals, doctors, patients, payers, and we’re trying to bring it all together so we can deliver the most convenient service in healthcare services. We talk about customization; we talk about all of the services we have being more convenient than healthcare. We want to be the model where people say “Can you do it like kidney care?” Super approachable, convenient, with the right touch of technology, with the right touch of human intervention.

So, we are well on the journey. From the time we talked last (2019), we’ve invested heavily in diagnostics, we’ve invested in some tools that will help you in your transplant journey and we have invested in artificial intelligence so we now have, I believe, the largest customized protocol by individual to manage anemia. If you were going to make an analogy of clothing—small, medium, large or whatnot—this is custom-fitted. We’re really excited about that.

FH: Do those investments of the past few years involve merger and acquisition deals? Partnerships? Internal research and development?

JR: We have M&A, but we have a lot of things we’re developing here. One of the most exciting things we have is—a lot of people keep talking about digital transformation. That’s a little bit of consultant lingo, but we actually have it here where every single one of our centers will be on the cloud, will be a state-of-the-art stack with digital interoperability with all sorts of leading companies so we can be easier to connect with and have all the right information at the right time. We know that’s the hardest thing to do—to have the caregivers actually be able to see what they need to see.

FH: Why is it so important that DaVita ensures its services are convenient and accessible? Does the company expect a financial return from doubling down in these areas?

JR: That [financial] answer will play out, but my sense of why we’re doing it is we just believe it’s the right thing to do. If any one of us had a serious condition of any sort, our first reaction I think is first a shock and the humility of, "oh boy, my life might have just changed." That energizes us to say, “How can we make sure that patient’s journey becomes, although a little more challenged, easier to understand?”

I have an example of a patient that I’ve talked to. His name is José, an amazing young man. When his kidneys failed he was shocked and depressed and didn’t know what to do. He went into the center, but his nurse grabbed him by the hand and literally walked him through and said, “Here’s another way you can get renal therapy, it’s at home.”

This young man, he was in high school at the time, started to thrive at home so much so that he began to look at his options and education. Then he got a transplant, but unfortunately the transplant failed. He went back home, then got a transplant again.

Why do I tell you all that? In a very compressed period of time—five years—he went from total depression to not needing renal replacement therapy because of the transplant, back to needing it, and then back to needing a transplant.

This shows you need to be convenient and well placed at all of the stages of care because it changes as life changes. There’s this huge journey of psychosocial you go through, and it’s important to be there through that whole journey.

FH: DaVita is a major name, but it’s not the only player in the kidney space. There are other up-and-comers like Somatus that recently won over investors with similar promises of integrated kidney care and innovation. How does DaVita view itself against that competition?

JR: Competition makes us better. It makes us look up and say, “What are they doing and can we do it better?” From my perspective, we have a complicated disease state, a complicated and vulnerable population, and if someone has a good idea that improves the service, I’m all for it. Of course, I want to push our team to be the best, but if for whatever reason someone comes up with something that’s better, we’d like to learn and continue to enhance the patient journey. So I’m all for it, and I continue to think that we’re the best positioned because our track record, our capabilities, our scale, our resources, our talent is unmatched. I think we’re really well positioned.

FH: Do you have any examples of a competitor doing something that your team liked?

JR: When you put a new company out there and say, “I have no sites of care, I have no caregivers to speak of,” it’s interesting to see how you enter the space. What many of these folks have done is they’ve started out with some analytic capabilities or some segmentation capabilities or different approaches. From my perspective, you go “How good are the analytics?” They’re top in class, but then what do we do to fortify them and keep it that way? It just forces you to evaluate and make sure you’re leading the way across the continuum.

I haven’t seen anything that we haven’t come up with, but of course, I don’t have perfect visibility to what they’re doing. When you look at the full portfolio, I continue to say we are really well positioned because we’re 20-plus years into this and we’ve been leading the way all along.

And, one of the things that you’ll hear in the community is, what I tell our folks is that we should be the best party to collaborate with. We should be an open platform to plug in with whatever’s best because technology shifts, so we built to [be able to] switch to the best provider in whatever, diabetes, cardiac, dietary care, whatever we’re talking about.

We also have a newly formed department called DaVita Venture Group. What we’re finding is we go out and say, "[Would you like us to] be just a sizable and sophisticated partner, would you like us to make an investment in you, would you like us to partner with you, what is the best way to connect?" We now have over a dozen of these arrangements in the entire continuum.

The continuum is wide, and then we are connecting our strategy and our DaVita Venture Group to make sure we have a full ranking of what the most important services are for our patients and our doctors. Said differently: If you go to a doctor and ask what is the most valuable service we can surround ourselves with in diabetes, cardiac, or whatnot, we get that description and then we comb the entire world to say who’s the best at this because we’re not going to be able to do everything for everyone. We’re going to partner with the best so that we can deliver the best service and care for everyone.

FH: Can you name a few examples of these DaVita Venture Group arrangements?

JR: For example, we partner with [Nephrosant] that does diagnostics on transplants. That intervention right now is highly invasive and is [conducted] after a patient is in a compromised position. So, if you could do a noninvasive diagnostic, maybe you can save a big amount of transplants.

We’ve also partnered with [Heartbeat Health], a cardiology company that’s 100% digital. It starts to segment the risks of the populations so you can manage and stabilize the higher-risk population. You can’t intervene on everyone—you have to be selective—so we’re getting really good at segmenting the risk of the population and customizing an intervention. Those are a couple of examples.

FH: Looking to a different type of innovation, can you speak to any shifts DaVita is seeing or pursuing in terms of kidney care payment models?

JR: All this stuff needs to work together of course because if you don’t have the payers or [Centers for Medicare & Medicaid Services (CMS)] aligned, you can have a lot of things shelved.

Right now, there’s a really meaningful conversation with both payers and CMS where we’re saying, "How can we deliver the right intervention at the right place and time?" Right now, the government launched these new models of care, we’re participating in 11 markets and we’re going to have roughly 12,000 [subclinical renal damage] patients and 12,000 patients on [chronic kidney disease], so we’re up and running at full scale. This is really, really exciting.

And of course, there’s our [Medicare Advantage (MA)] population. More of our patients are picking MA, and we’re having more innovative conversations with those payers on how we can offer the right service to those patients who have any form of kidney disease. Again, the market is shifting quickly and in a very progressive and exciting way.

So I think, in a little while, the payers are going to send us lab values and say, “Hey, these patients appear to have something elevated or something that can put them at high risk of kidney disease,” and we’re going to have our analytics and intel intervene early so we can either avoid the SRD altogether, or make sure the transition is well educated, well managed so we can avoid that depression I described in José that many people have today.

FH: DaVita is involved in a few high-profile lawsuits and regulatory rulings around antitrust and reimbursement. To the extent that you can, could you address these actions and how they might affect DaVita’s reputation and capacity to continue growing?

JR: I appreciate and am really excited you asked because sometimes these things often get a label in the media or they’re uber technical and hard to understand, so I speak of these very transparently. On the indictment [regarding alleged employee poaching agreements], I think it’s just important to demystify and talk about it in lay terms.

The case alleges that a former executive, our former CEO [Kent Thiry] in this case, agreed not to hire senior leaders many years ago. Now, the case is [about] friends—it’s not like he was going out into the marketplace and talking about it. It’s an untested application of the law, and so it’s getting a lot of attention. It’s going to be tried here at the end of March/beginning of April.

While we’re not going to say much because, of course, right now is the time the jury is getting selected and all things, we hope you and your readers and others let the facts stand on their [own] and wait for the trial to have a conclusion.

As you can imagine, and this is a personal comment, but I’m a representation of our 65,000 teammates and caregivers. We are a highly, highly ethical company and personally, … when you have something like this in the backdrop, you really hope people give you the benefit of the doubt and let the facts play out and come to its conclusion. I’m confident they’ll agree with us that this application of the law does not work. We’re confident in that.

FH: Next, can you speak to the Federal Trade Commission (FTC)’s recent order that DaVita divest some of its Utah dialysis clinics? In particular, is DaVita concerned that it was the poster child for the regulator’s reestablished prior approval policy?

JR: I would hope that we’d be the poster child for doing well and being good, meaning we proactively work with the regulators and understand that healthcare is highly regulated.

In this particular case, if you were to look at the facts instead of some of the language, the reality is that the market has consolidated over the last two decades and this was a meaningful presence in that marketplace. If you were to call the government, [they’d say] we worked incredibly collaboratively with the regulators to make sure that the landscape continues to be competitive, and it takes into account whatever the regulators of the time hoped it would. This was, hopefully, an example people can cite as the system working well.

As it relates to growth, it does not limit our growth because, as we started out our conversation, this is all about shifting to broader kidney disease. This is not about dialysis; this is about everything from CKD [chronic kidney disease] to analytics to modality selection to home to transplant. That lens is materially bigger than a transaction here in Utah.

FH: And finally, Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc.?

JR: It’s a complicated case, I probably won’t do it justice in a few minutes, but if you go to the Supreme Court blog, I think it does a good job of summarizing in lay English.

In general, it’s a thing that we’re really, really proud of, that we’re representing our patients and their choice in private insurance. We’re really unapologetic in representing the voice of people with kidney disease, and we’ll never stop that. As long as I’m CEO, we’ll advocate for our patients and their rights.