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CVS finishes acquisition of Oak Street Health


Foundational for pharmacy company’s effort in ‘value-based primary care.’

cvs-health-pharmacy-sign ©


Pharmacy giant CVS Health announced it has finished its acquisition of Oak Street Health.

The May 2 announcement follows almost two months of paperwork to seal the $10.6 billion deal, in which CVS Health paid $39 share for the company, which saw 224,000 patients in 2022. The company reported total revenues of $2.216 billion for 2022, up 51% from the year before, with a net loss of $509.7 million.

Oak Street Health will continue to operate as a multi-payor primary care provider as part of CVS Health.

“The acquisition will broaden CVS Health’s value-based primary care platform and significantly benefit patients’ long-term health by improving outcomes and reducing costs – particularly for those in underserved communities,” CVS said in its official news release.

As of the earlier announcement in February, Oak Street Health had about 600 primary care physicians and clinicians in 169 centers in 21 states. On May 2, CVS updated its figures, with a workforce of more than 300,000 people, including more than 40,000 physicians, pharmacists, nurses, and nurse practitioners.

CVS has stated it anticipated by 2026, Oak Street Health will have more than 300 centers, each with the potential to contribute $7 million of Oak Street Health adjusted earnings before interest, taxes, depreciation, and amortization at maturity, for more than $2 billion in revenues.

Part of ‘complex’ health care

The deal has been on the radar for industry watchers including Christi A. Grimm, inspector general of the U.S. Department of Health and Human Services. She mentioned it during her April 24 speech to the Health Care Compliance Association last month in Anaheim, California.

The U.S. health care industry is “complex” and rebooting after several years of the COVID-19 pandemic public health emergency, Grimm said.

CVS is among the growing number of “pay-viders” employed or affiliated with health plans, Grimm said, citing a news report. CVS added 10,000 pharmacists and primary care professionals in 2021, before the Oak Street Health acquisition.

Grimm also cited Humana serving more than 200,000 patients in more than 200 primary care clinics. United Health Care via Optum is the largest employer of physicians in the nation, with more than 70,000 providers, she said.

Meanwhile, health care remains a “safe bet” for investors, with private equity pouring in more than $1 trillion in 8,000 deals in the last 10 years, Grimm said.

“There are concerns about quality and access to care, increasing expenditures, competition, a workforce stretched thin, and new, complex business models. The stakes are high for health care companies, payers, and ultimately for patients,” Grimm said. “This is an incredibly dynamic time for the health care sector. A combination of rapid change and longer-term trends is transforming the industry. It can be hard to keep up, to know which change is lasting and which trend is fleeting, especially as the industry approaches the end of the PHE.”

CVS Health announced the definitive takeover agreement on Feb. 8 and financed the purchase by borrowing $5 billion from a term loan agreement, cash, and other available resources. The company remains “committed to maintaining its current credit ratings,” the announcement said.

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Jennifer N. Lee, MD, FAAFP
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