Mr. Daniels: I have somewhat of an eclectic coverage universe, but it makes sense as the underlying thesis is similar for most of my names. More specifically, I cover the private-pay senior housing operators, the veterinary health care space, a lot of health care outsourcing providers - names like Stericycle, which does regulated medical waste management, or Healthcare Services Group, which does linen, laundry and food services for skilled nursing facilities - and then some of the large group practice management companies, like MEDNAX, IPC The Hospitalist Company and Virtual Radiologic. I also have some modest exposure to some of the more traditional services providers, such as the surgery centers or behavioral health care operators.
While it may seem like a disparate group on the surface, there are two underlying themes. One is trying to avoid too much reimbursement exposure to government payers Medicare and Medicaid, given our longer-term fears of the fiscal instability of those payers and what that could mean for rate reductions for the companies that provide services to them. So that leads me into the private-pay senior housing, the veterinary, the outsourcing spaces. All of these sectors have an ability to benefit from some of the non-cyclical demand characteristics of health care, along with the demographic trends, which are favorable, without taking on that reimbursement risk.
And then the other subsection of coverage is more, I believe, akin to the high-quality, lower-cost providers that should win out in the market as the system tries to move patient volume to more efficient delivery models. So the underlying thesis to my coverage is let's either avoid the pressure or be part of the solution. So that's what takes me to the vet space, which I think is what we'll focus on today.
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