CVS Health’s $10.6 billion acquisition Wednesday of Oak Street Health will expand the company’s access to older adults, including the nation’s 72 million aging baby boomers.
“It expands their focus on senior care significantly, addressing primary care provider access and other services for seniors,” Tom Lillis, partner, Stoneridge Strategic Consulting, told McKnight’s Home Care Daily Pulse in a statement.
Oak Street Health is a multi-payer, value-based primary care company for older adults. It employees approximately 600 primary care providers and has nearly 170 medical centers across 21 states. Oak Street uses a technology solution called Canopy, which is fully integrated into its operations and helps determine the appropriate level of care for each patient.
“Combining Oak Street Health’s platform with CVS Health’s unmatched reach will create the premier value-based primary care solution,” CVS Health President and CEO Karen Lynch said in a statement. “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.”
CVS has been aggressively evolving from a retail pharmacy chain to a holistic healthcare firm. The company also owns healthcare insurer Aetna and tech-enabled home care firm Signify Health.
Morningstar healthcare analyst Julie Utterback told McKnight’s Home Care Daily Pulse Oak Street Health’s focus on value-based arrangements could provide nice synergies with Aetna and could provide in-home benefits as well.
“By acquiring both Oak Street and Signify Health in the near future, CVS would have a variety of assets to serve customers in the appropriate location — either in the clinic or at home — whichever makes the most sense for the patient,” Utterback said.
CVS and Oak Street hope to close the deal sometime this year.
News of the acquisition came as CVS reported a solid fourth quarter and full year 2022 earnings Wednesday. The company earned $1.99 a share on revenues of $83.8 billion for the quarter ended Dec. 31, 2022. That compared to $1.98 a share on revenues of $76.6 billion during the same quarter last year. For the full year, CVS earned $8.69 a share on revenues of $322.5 billion compared to $8.40 a share on revenues of $292.1 billion in 2021.
