DaVita Inc.

Good evening. My name is Debbie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the DaVita fourth quarter 2019 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star and the number one on your telephone keypad. If you would like to withdraw your question, press star, then the number two. Thank you, Mr. Gustafson. You may begin your conference.

Thank you, and welcome, everyone, to our fourth quarter conference call. We appreciate your continued interest in our company. I'm Jim Gustafson, Vice President of Investor Relations, and with me today are Javier Rodriguez, our CEO, Joel Ackerman, our CFO, Leanne Zumwalt, Group Vice President, and Jim Hilger, our Chief Accounting Officer. Please note that during this call, we may make forward-looking statements within the meaning of the federal securities laws. All of these statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For further details concerning these risks and uncertainties, please refer to our fourth quarter earnings press release and our SEC filings, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. Our forward-looking statements are based upon information currently available to us and we do not intend and undertake no duty to update these statements. Additionally, we'd like to remind you that during this call, we will discuss some non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release submitted to the SEC and available on our website. I will now turn the call over to Javier Rodriguez.

Thank you, Jim, and good afternoon, everyone. We appreciate your interest in DaVita and look forward to your questions and comments. I will start with clinical highlights as a reminder of life-sustaining care that we provide to more than 235,000 people. While we discuss clinical outcomes and lowering the total cost of care, our goal is to improve our patients' quality of life. One specific example has been to focus on reducing infections in our patients. Dialysis patients are prone to infections, which can often lead to lengthy hospitalization stays and increase in mortality. I'm excited to report that our efforts have paid off. In 2019, we reduced the rate of bloodstream infections by 13% and improved the rate of peritonitis by 20% versus the prior year. This is a meaningful improvement that kept many of our patients out of the hospital. Now let me transition to our results and outlook for 2020. We had a strong performance in 2019. We met the earnings per share and free cash flow growth targets we set for the year. We're committed to achieving our 2020 financial guidance, and in fact, we're raising our earnings per share target range by 50 cents. Joel will provide the financial details on both the quarter and our 2020 guidance. Now, let me pull up for a few minutes to share our high-level views on clinical and on policy. We are in an exciting time for kidney care. We're bridging the transition of care from the nephrologist's office to different types of care. We're working with our payers to use predictive analytics to identify CKD patients with the highest risk of transition to ESRD. Once we support these patients, we'll work on avoiding or delaying the onset of kidney failure. We remain excited about Nephrology Care Alliance, the new physician-led entity with nearly 1,100 nephrologists that will be the vehicle to connect DaVita to the nephrologist practice. The goal is simple, provide world-class analytics and education to help physicians best deploy their time to care for the right person at the right time. For those patients who do transition to ESRD, we've built a leading education platform to empower patients to choose to start on the right treatment modality for them. For patients who choose home modality, we continue to invest in our leading home platform where we serve the most home patients of any provider. In 2019, we saw our highest growth ever in PD modality. We're working to maintain our leadership in the home dialysis with a 2020 goal of achieving double-digit growth in the PD modality. Moving on to policy. We continue our multi-year journey towards integrated care. We're encouraged by the quality improvements that are evident in our demonstrations, such as the ESCO. We're hopeful that there will be additional models and opportunities to scale integrated care for ESRD patients at national levels. We remain optimistic about the administration's view for value-based care models. We believe that the capabilities that we've built will support our collective goal to improve clinical outcomes while managing total cost. There's been a lot of recent conversation about Medicare Advantage and the 21st Century Cures Act. We would remind everyone that Congress passed this legislation with the intent of making additional insurance options available to Medicare-eligible patients, ESRD patients. With respect to expectations of adoption, no one really knows what choices will be made by the patient. We continue to believe that the selection into MA will be more gradual. We look forward to working with plan partners to manage the care and the cost of these patients. In parallel, our advocacy efforts are focused on ensuring adequate funding in both Medicare fee-for-service and MA. And as we've said before, we remain ready and eager to advance integrated care for Medicare fee-for-service population. Shifting to state policy, we will keep advocating for our patients in California and other states where some labor unions are pursuing policies that are not good for patients, costs, or the care delivery system. Now, let me transfer it on to Joe, so he will provide additional details on the quarter and specifics on 2020 guidance.