On its third-quarter earnings call, DaVita CEO Kent Thiry had a handful of excuses for his company’s 14.7% drop in earnings per share from the third quarter of 2012 and a drop in three-month net income by 5.6 percent from 2012. Some explanations, such as the implementation of Obamacare, were rational, but he may have forgotten one excuse for missing the mark – a distracted CEO.
Thiry and the cult-like culture he’s fostered at DaVita already have drawn scrutiny for “aggressive business practices”:
“The years-long onslaught of lawsuits that accuse the company of everything from patient neglect and unfair business practices to Medicare fraud; federal investigations into its income statements; and the overarching fact that DaVita’s profits derive primarily from a taxpayer-funded health-care system that, according to critics, is driven by inefficiencies, conflicts of interest, and overbilling.”
Now, Thiry seems to have taken his show on the road to Colorado’s political scene. A 5280 article last year noted that Thiry calls himself “the mayor of DaVita Village”, but are Thiry’s aspirations to reign over something…larger?
We sympathize – kidney dialysis and federal government ethics probes aren’t as sexy as pretending to be kingmaker in Colorado politics. Most recently, Thiry and DaVita blew $100,000 on the failed Amendment 66. He’s also played extensively in Denver’s school board races, stroking $5,000 checks (or more) to his favorites.
Thiry’s apparent political mentor seems to be embattled Democratic Governor of Colorado, John Hickenlooper. Not only do Hickenlooper and Thiry play politics together, but they seem to go hand-in-hand in the social circuit as well. Here’s how 5280 characterized Thiry’s social endeavors:
“After DaVita arrived here in 2010, Thiry quickly became a fixture in local power and philanthropy circles. He lunches with the governor at the Cherry Cricket, mountain bikes with ex-state Senator Chris Romer, and hangs out with muckety-mucks like former Denver city attorney Cole Finegan. Along with his wife, Thiry has sponsored or chaired numerous Colorado charity events.”
But, what does this all add up to? What’s Thiry’s angle in Colorado and why dirty his hands with the billion dollar union payoff (aka Amendment 66)? Did Hickenlooper loop him into this mess?
What we do know is this – Thiry is in charge of a multi-billion kidney dialysis organization that is experiencing some of the most transformative changes in the healthcare industry perhaps since the industry’s inception. DaVita employs 34,000 nationwide and approximately 1,000 in Colorado. Those employees, his investors, and DaVita’s customers depend on Thiry to keep his ship afloat. When Thiry gets distracted by playing politics with Governor Hickenlooper and, then, comes back to his stakeholders with news of poor performance, it matters. It makes 5280‘s question last year even more critical: “Are his carnival-like theatrics a stroke of genius, or are they designed to distract people from the hard truths about his business?”
Perhaps Kent Thiry ought to spend less time playing in Colorado politics and more time serving as “mayor of DaVita Village”.