Oak Street Health

Oak Street Health is a value-based direct primary care provider for Medicare-eligible patients aged 65 years and above, with a focus on underserved communities. Oak Street generates the majority of its revenue (over 95%) through capitations, which is a fixed payment per patient per month, paid in advance by Medicare. It is liable for medical costs in excess of the fixed payment and is able to retain any surplus created if costs are lower. Oak’s at-risk patient base amounted to 159,000 patients across 169 centers and 20 states at the end of December 2022.  

In October 2021, the company acquired the Rubicon eConsult platform to expand into virtual specialty care at a deal price of USD 130 million. Oak Street expects the acquisition to triple eConsults growth and reduce specialist medical costs by 10% by 2023. Further, in May 2023, the company was acquired by drugstore giant CVS in an all-cash transaction of USD 10.6 billion. Oak Street Health will continue its operations as a multi-payer primary care provider within CVS Health. 

In March 2023 , the company along with kidney care management company Interwell Health announced the launch of Oakwell, a joint venture that will offer primary care services to end-stage kidney disease patients in dialysis centers.

Funding and Financials

Oak Street Health commenced trading on the New York Stock Exchange in August 2020, under the ticker symbol "OSH", raising USD 328 million from the initial public offering. In November 2022, the company secured a USD 300 million credit facility from Silicon Valley Bank (SVB) and Hercules Capital Inc to fund their operational and strategic needs.  

For the year 2022 , the net losses expanded 3% YoY to USD 509.7 million while revenue grew 51% YoY in 2022 up to USD 2.16 billion. The adjusted EBITDA significantly increased by 25.1% YoY to negative USD 283.6 million for the year. Due to Oak’s pending transaction with CVS Health, the company did not provide guidance for 2023.