Biggest Names In Health Care


Shares of DaVita, a kidney dialysis company, are down 12% over the past 3 months. Should you buy the dip?

In general, I like this company because it’s not economically sensitive Karen Finerman says. And I think these guys are great operators.

However, DaVita which has about a 30% of the market in the US gets paid for both the treatment and the drugs that it provides.

But that could become less profitable, Finerman says, as Medicare looks to bundle the costs. In fact, last quarter the company recorded its first decline in revenue per treatment in years, prompting investors to worry about DaVita's pricing environment.

DaVita Chief Executive Kent Thiry joins the panel for this conversation. Following are excerpts.

What do you think about the scrutiny you’re under, currently?

“There is an awful lot of scrutiny on our drugs right now,” says Thiry. “But we welcome that scrutiny. We’re confident that our community will thrive under that scrutiny.”

But, how much is it hurting you?

“It’s not hurting our business at all,” says Thiry, “because decisions about how to use these drugs are being made by physicians.. and they make them based on patient care. So the fact is, it’s not hurting us at all.”

How important is Medicare to your business?

“Medicare is so important to us,” replies Thiry. “87% of our patients are on Medicare for their reimbursement and no other segment in America is like that. Right now we lose money on every one who falls into that 87%.

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Trader disclosure: On Jan 7, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (ATVI), (INTC), (YHOO); Najarian Owns (MCD), (N), (ISIS); Najarian Owns (SYY) Options, (VLO) Options, (YHOO) Options, (AAPL) Options; Finerman's Firm Owns (CROX), (GS), ( HD), (VLO), (YHOO), (DVA); Finerman's Firm Is Short (IJR), (IYR), (SPY), (IWM), (SPG), (TCO); Finerman's Firm Owns (MDY) Puts And Is Short (MDY); Finerman's Firm Owns (MSFT) Options; Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts