Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) Q4 2022 Earnings Call Transcript

There is no funding left in any of the bills that have been issued. And of course, we continue to kind of along with many providers speak to the concerns that we have. And obviously, we know that the reimbursement system is in a lag. And obviously, we do have a benefit of the 3% PPS rate this year. Our expectation is that that will increase in 2024 and 2025 in line with the kind of the increased costs that will get submitted. We’ll get the benefit of that. Hopefully, these inflation starts to tail off. So I think you’re right. It’s not just a prudent assumption. I think it’s a real assumption. This time last year we felt that we had line of sight into something but not here. And obviously, if anything changes we will update the market accordingly.

Oliver Metzger: Okay. Thank you. And then just one follow-up. How do you evaluate the risk that some smaller operators will go out of business?

Helen Giza: Sorry, Oliver. I did miss that. Yes, look it’s a question we get asked a lot. Obviously, we are larger in scale and obviously, it’s impacting us quite significantly. So we can only imagine that it’s hitting the smaller operators harder. If you recall, there was more funding available for the rural providers. But of course that’s used up too. I guess the hypothesis here is that it could put stress on the smaller operators and maybe that becomes a benefit for us, if we’re able to pick up those patients. But obviously, that’s not built into this and I’m speculating on what duress there under. I can honestly say, we’re not having them knocking at our door saying, buy us, and we’re not buying any way. But obviously, it’s something that we are keeping our ears to the ground on and watching carefully.

Oliver Metzger: Okay. Thank you very much, Helen.

Operator: The next question is coming from Christoph Gretler from CS. Please go ahead.

Christoph Gretler: Yes. Thank you, operator. Good afternoon, Helen, Dominik. First of all congratulations on this steep career from CFO to CEO and now to a fully public company. So it’s quite remarkable. I have now two questions for you. The first is just on same-store market growth in the US it keeps on declining. And I was just wondering, if you could share your thoughts on what’s going on there. I guess kind of the access mortalities probably kind of passed and it’s still kind of not showing any signs of improvement. So that would be very interesting. And the second question with respect to payer mix whether you could indicate if you had seen any impact from the Marietta Memorial Hospital case particularly on the small and midsized customer base. It’s been a while now. So I’m just wondering whether that’s, kind of, an issue or not at all?

Helen Giza: Thanks, Christoph. It’s — I appreciate the congratulations. It’s been a busy 78 days. So — Let me unpack your questions. Same-store market growth in Q4 that was minus 1.9% and that was an improvement over Q4. And obviously to be clear that’s the US. And it has been improving every quarter. Obviously as you correctly point out there is this — the accumulation of the excess mortality, but — and I think it’s why we have been quite narrow and flattish with our range on, kind of, the growth projection for 2023. But we’re also seeing, kind of, the mortality coming down quite significantly from the peak consistently. So that’s giving us the confidence that we will return to growth. I think this question of when do we see it fully back to what it was pre-pandemic.