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. Oak Street is therefore 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 134,000 patients across 144 centers and 20 states at the end of June 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. It planned to integrate Rubicon’s eConsults platform to provide real-time specialist video visits available in person at Oak Street Centres, leveraging RubiconMD’s technology and network of 230 healthcare providers. Oak Street expects the acquisition to triple eConsults growth and reduce specialist medical costs by 10% by 2023.

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. Despite reporting a strong topline growth in 2021 (up 62% YoY to USD 1.4 billion), it continued to report net losses (up 2x YoY to USD 415 million). For six months ended June 2022, the net losses expanded 49% YoY to USD 245 million while revenue grew 60% YoY to USD 1.04 billion during the same period. In terms of its guidance for 2022, the firm expects revenue to reach USD 2.10 billion - 2.14 billion (implying a growth rate of 50% - 53% YoY). It also plans to open 40 new centers in 2022 and a further 30 - 40 new centers in 2023 and 2024.