Kent Thiry will step down as the chief executive officer at DaVita Inc., ending a two-decade run leading one of the two largest providers of kidney dialysis services in the country, the Denver-based company announced Monday.
Provided by DaVitaKent J. Thiry on Oct. 14, 2015.
Javier Rodriguez, the president of Davita Kidney Care, will take over as CEO of all of DaVita on June 1. Thiry will become executive chairman of the board, with a focus on strategic planning and consulting rather than supervising day-to-day operations.
“For me, one of the big positives of the many positives in this transition is that I will work less in DaVita and ramp up my civic engagement in Colorado and more broadly,” Thiry told The Denver Post. “I am very excited about that.”
DaVita moved its headquarters from El Segundo, Calif., to Denver in 2009 with 150 employees. It now counts around 4,000 employees in Colorado out of a workforce of 65,000.
Over the years, Thiry has become a growing force on Colorado’s political scene. He considered and then decided against joining the crowded Republican primary for governor in 2017. But four initiatives he threw his weight behind and bankrolled resonated with voters.
They included measures to restore the presidential primary, to open up party primaries to unaffiliated voters and to reform how political maps are drawn on the state and federal level.
“We strongly believe that companies should be good citizens and actively engaged in the health of the community,” Thiry said. “We have to care about each other.”
Thiry has stood out for his unconventional morale-boosting tactics. An ardent Three Musketeers fan, he attended company staff meetings barefoot and in full costume. Employees are referred to as teammates or villagers, the corporate headquarters as the village, and his job as mayor.
“One of the reasons that Javier was the right choice was because he believes in the culture in a very deep way.” Thiry said, while also acknowledging Rodriguez will bring his own unique management style to the job.
At a ceremony announcing plans for the company’s second office tower in the Central Platte Valley in August 2016, Rodriguez rode a zip line down to the stage as “Livin’ La Vida Loca” blared and employees cheered.
Rodriguez, 49, and Thiry, 63, have worked side by side since 1999, when Davita was known as Total Renal Care. Plans for a changing in the guard have been in the works for the past four or five years, with both internal and external candidates considered, Thiry said.
As to why make the switch now, he said a long stretch of flat Medicare reimbursements for dialysis care is ending, giving the company financial momentum. He also said the $4.9 billion sale of the company’s physician practice to UnitedHealth Group, announced at the end of 2017, is nearly done after a long delay.
Under Thiry’s tenure, the number of DaVita dialysis centers rose from 450 in 2000 to nearly 3,000; revenues went from $1.4 billion to more than $11.4 billion in 2018. The company’s share price has gone from a split-adjusted 69 cents to $55.61 on Friday and the market value has risen from $150 million to $9.2 billion.
DaVita and Fresenius Medical Care North America run neck-and-neck in terms of treating dialysis patients in the United States. Between them, the two treat about 400,000 of the 500,000 people on dialysis in the country, according to Nephrology News & Issues.
“DaVita is positioned well to execute on significant opportunities ahead and I look forward to working with the team on the next phase of our evolution to benefit our patients, teammates, physician partners and healthcare community as a whole,” Rodriguez said in a press release.
But DaVita has struggled on several fronts in recent years. Revenues peaked at $12.8 billion in 2014 and the share price remains off its high of $84.23, reached on May 28, 2015. A string of lawsuits and regulatory fines have dogged the company and cost it billions.
A jury awarded families of three deceased patients $385.5 million last year after hearing testimony that the company did not adequately warn kidney doctors that a product that saved the company money also put patients at risk of cardiac arrests. A subsidiary agreed to pay $270 million last fall to settle allegations it reported inaccurate information about medical patients’ conditions to the government, leading to higher Medicare reimbursements.
DaVita’s pharmacy services unit in 2017 agreed to pay $63.7 million to resolve allegations it improperly billed federal health care programs and paid illegal financial incentives to patients. In 2015, DaVita paid $495 million to resolve a whistle-blower lawsuit and in 2014 it paid $389 million as part of a kickback investigation.
“We absolutely believe that we and companies like us should be accountable to the highest standards,” Thiry said. “The short answer is that much of that is behind us. At this point, because of what we have gone through, we have one of the best compliance programs in America.”
Thiry also said clearing up those cases was another reason why now was a good time to make the transition in leadership.
There was also a more personal motive regarding the timing, Thiry said. DaVita is hosting its annual leadership meeting Monday in Washington, D.C. Thiry said he tries to personally greet as many of the 4,000 attendees as he can when they come off shuttles to the conference.
This time around, his greeting will not only be about offering a welcome, but also about saying goodbye.
“It will be an emotional time,” he said.