CVS Health completes Oak Street Health acquisition
Oak Street Health will continue to operate as a multi-payer primary care provider as part of CVS Health.
Photo courtesy of CVS Health
CVS Health has officially completed its acquisition of Oak Street Health, the company revealed this week.
The definitive agreement was announced in February, with the all-cash transaction valued at around $10.6 billion. Oak Street Health is a multi-payer, value-based primary care company focused on older adults, with a care model and technology platform it describes as scalable.
CVS financed the transaction with borrowings of $5 billion from a term loan agreement entered into on May 1, and existing cash and available resources. CVS Health said it's committed to maintaining its current credit ratings.
Oak Street Health will continue to operate as a multi-payer primary care provider as part of CVS Health.
WHAT'S THE IMPACT
The organizations said the acquisition would benefit patients' long-term health by reducing care costs and improving outcomes, particularly for those in underserved communities. More than 50% of Oak Street Health's patients have a housing, food or isolation risk factor, they said.
Oak Street Health employs about 600 primary care providers and has 169 medical centers across 21 states. Its signature technology solution is Canopy, which is integrated with the company's operations and utilized when determining the appropriate type and level of care for each patient.
Mike Pykosz, Oak Street's CEO, said that care will be enhanced by CVS Health's community, home and digital offerings.
Pykosz will continue to lead Oak Street Health, which will become part of CVS Health's recently formed Health Care Delivery organization.
THE LARGER TREND
It's been a busy few months for CVS, with the company launching Virtual Primary Care in January, a virtual care offering focused mainly on primary care and mental health services.
Through the launch, CVS is also expanding its virtual mental health services. Enrollees 18 and older are slated to have access to nationwide virtual mental health support from clinicians including licensed therapists and psychiatrists.
Not everything has been smooth going for the insurer, however. Recently it was revealed that Cigna is suing CVS over the intended hire of former Cigna executive Amy Bricker. The lawsuit alleges this violates Cigna's noncompete agreement, with the company saying it would be "immediately and irreparably harmed" if Bricker's hire is allowed to continue.
Recently CVS Health said it was rolling out a new initiative, the Community Equity Alliance, in hopes it will address barriers to care in underserved communities. The Alliance is being established to expand the community health workforce, enhance connections between healthcare institutions and communities, and address disparities in heart health and mental health outcomes.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
