Competition hot for senior primary care as CVS acquires Oak Street Health

CVS Health and Oak Street Health have entered into a definitive agreement under which CVS Health will acquire Oak Street Health in an all-cash transaction at $39 per share, for approximately $10.6 billion.

According to CVS, “Oak Street Health is a leading multi-payor, value-based primary care company helping older adults stay healthy and live life more fully. With an innovative care model and technology platform designed to deliver consistently superior outcomes and patient experiences, Oak Street Health has demonstrated that its model is scalable.” Oak Street Health promotional literature often carried the “selected by AARP” phrase and logo targeting the over-50 market.

This is CVS’ second attempt to get more deeply into the primary care business with the goal of increasing access, improving quality of care, and reducing costs.

Of the 169 medical clinics around the country, there are four Oak St. Health locations in Rhode Island:

Oak Street Health centers are located where health care services are needed most; more than 50 percent of Oak Street Health’s patients have a housing, food or isolation risk factor. 

“Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution,” said CVS Health President and CEO Karen S. Lynch. “Enhancing our value-based offerings is core to our strategy as we continue to redefine how people access and experience care that is more affordable, convenient and connected.”

Oak Street Health employs approximately 600 primary care providers and has 169 medical centers across 21 states. CVS’ goal is to increase the number of clinics to 300 by 2026. Oak Street Health is differentiated by its leading technology solution, Canopy, which is fully integrated with Oak Street Health’s operations and utilized when determining the appropriate type and level of care for each patient. That care will be enhanced by CVS Health’s community, home and digital offerings.

“This agreement with CVS Health will accelerate our ability to deliver on our mission and continue improving health outcomes, lowering medical costs, and providing a better patient experience while offering significant value to our shareholders,” said Oak Street Health CEO Mike Pykosz. “Together with CVS Health, we will have access to greater resources and capabilities to expand the reach of our platform, provide more opportunities for our teammates and, most importantly, make a meaningful difference in the lives of the patients we serve.”

Pykosz will continue to lead Oak Street Health, which will become part of CVS Health’s recently formed Health Care Delivery organization.

CVS continues their plan to acquire Signify Health. They also own Aetna. According to CoStar.com, Walgreens is purchasing, via its VillageMD unit’s $8.9 billion deal, Summit Health, parent of urgent care chain CityMD. Last summer e-commerce juggernaut Amazon said it was buying 1Lifecare Health, a primary care company that operates as One Medical, a turnkey network of 188 primary care clinics across the United States, for roughly $4 billion. And Walmart has been rolling out healthcare centers adjacent to its Supercenters.

About CVS Health

CVS Health® is the leading health solutions company, delivering care like no one else can. We reach more people and improve the health of communities across America through our local presence, digital channels and over 300,000 dedicated colleagues – including more than 40,000 physicians, pharmacists, nurses and nurse practitioners. Wherever and whenever people need us, we help them with their health – whether that’s managing chronic diseases, staying compliant with their medications or accessing affordable health and wellness services in the most convenient ways. We help people navigate the health care system – and their personal health care – by improving access, lowering costs and being a trusted partner for every meaningful moment of health. And we do it all with heart, each and every day. Follow @CVSHealth on social media.

About Oak Street Health

Founded in 2012, Oak Street Health is a network of value-based primary care centers for adults on Medicare. With a mission of rebuilding healthcare as it should be, the Company operates an innovative healthcare model focused on quality of care over volume of services, and assumes the full financial risk of its patients. Oak Street Health currently operates more than 160 centers across 21 states and is the only primary care provider to carry the AARP name. The Company is a winner of Energage’s 2022 Top Workplaces USA award, was recognized by Inc. on its inaugural Best-Led Companies of 2021 list and was honored as a recipient of the 2022 and 2021 Joy in Medicine™ Health System Recognition Program by the American Medical Association. To learn more about Oak Street Health’s proven approach to care, visit oakstreethealth.com Opens in a new window or read its Social Impact Report Opens in a new window.