Dive Brief:
- Oak Street Health plans to enter Arkansas, Iowa, Kansas and Virginia beginning this summer, the value-based primary care chain for seniors announced Tuesday.
- The expansion will grow the footprint of Chicago-based Oak Street, which was acquired by CVS for $10.6 billion, to 25 states.
- Oak Street also plans to open additional centers in Arizona, Colorado, Georgia, Illinois, Indiana, Louisiana, New York, Ohio and Pennsylvania this year, according to a release.
Dive Insight:
The expansion comes under a month after CVS finalized its acquisition of Oak Street. The deal, originally announced in February, added a multi-state chain of doctor-staffed medical clinics for seniors to CVS’ primary care roster.
Currently, Oak Street employs roughly 600 primary care providers across 169 medical centers in 21 states.
The Chicago-based medical group, which was founded in 2012, expects to have more than 300 centers by 2026.
Each of those centers has the potential to contribute $7 million in adjusted earnings at maturity, representing more than $2 billion in adjusted earnings to CVS at that time, according to the company.
Oak Street has seen rapid growth and results from its value-based clinical strategy, but still operates at a loss. The clinic operator is expected to lose over $200 million in 2023 and does not expect to reach profitability until 2025 at the earliest.
