CVS Adds Oak Street Health In $10.6 Billion Buy To Boost Primary Care Offerings

CVS Health is acquiring Chicago-based Oak Street Health for a staggering $10.6 billion in a bid to advance care delivery for consumers. 

The all-cash transaction, which has been approved by the Board of Directors of both companies, will take place at $39 per share. 

Related Article: CVS Beats Amazon in Signify Bidding War with $8 Billion Acquisition Offer

A Primary Care Company for Older Adults

Founded in 2012, Oak Street Health is a multi-payout primary care company for older adults on Medicare, the federal health insurance for people aged 65 and above. The company’s healthcare network employs around 600 primary care providers, covers 21 US states and 169 primary care centers, and is generally situated where healthcare services are needed most. According to the company, more than 50% of their patients have a housing, food, or isolation risk factor.  

Canopy, Oak Street Health’s integrated technology platform, is designed to deliver better outcomes and patient experiences. Furthermore, the model is scalable. 

Combining CVS Health and Oak Street Health could benefit the patients’ long-term health through reducing care costs and improving outcomes, especially for those in underserved communities. CVS Health’s community, home, and digital offering could further complement the Canopy platform. 

“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.”

“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,” said Oak Street Health CEO Mike Pykosz.

Pykosz is tipped to retain leadership of Oak Street Health, which will be assimilated into CVS Health’s Health Care Delivery organization, which was recently formed last October.

Author

Joy Lin

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