...Strong Market Position: DaVita Healthcare Partners Inc. (DaVita) is one of two leading providers of dialysis services in the U.S. for patients suffering from end-stage renal disease (ESRD). DaVita and its competitor, Fresenius Medical Care, control approximately 65% of the U.S. market, with the remaining 35% made up of smaller providers. Fitch Ratings believes DaVita's scale and flexibility helps the company absorb reductions in pricing and reimbursement rates that could place greater strain on its smaller competitors. Steady Demand Growth: The critical nature of DaVita's services, an aging patient population and the backstop of the federal government as a third-party payor offers DaVita the prospect of steady demand growth. The number of patients with ESRD is expected to grow at an annual rate of 3%¡4%, and these patients cannot survive for an extended period without dialysis. Restrictive Reimbursement Environment: Payment rate pressure remains a concern, given that Medicare/Medicaid pay...
