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CVS Health reportedly pondering acquisition of primary care provider Oak Street Health

by John R. Fischer, Senior Reporter | January 13, 2023
Business Affairs Primary Care
CVS Health has reportedly exploring a possible acquisition of primary care provider Oak Street Health.
CVS Health is weighing a potential acquisition of Oak Street Health, a primary care center operator that runs primary care centers across the U.S. for Medicare beneficiaries.

Based in Chicago, Oak Street Health was founded in 2012 and today has more than 160 centers across 21 states. It is the only primary care provider with the interest group AARP’s (formerly the American Association of Retired Persons) name attached to it and also provides access to specialists. Its shareholders include private equity firms General Atlantic and Newlight Partners.

Bloomberg News broke the news on January 9, citing people familiar with the matter.

This sent Oak Street Health shares soaring 27% in after-hours trading after closing 4.25% higher at $22.57 on January 9 at a market cap of $5.5 billion, according to Reuters.

Earlier that day, CVS said in its full-year 2022 revenue forecast that it expected to earn between $309 billion and $314 billion, reported Bloomberg.

Like other retail companies, CVS has made several acquisitions over the last few years to expand its products beyond managing health and pharmacy benefits.

Just last year, it put down $8 billion to buy out home healthcare service company Signify, beating out competing bids from UnitedHealth, Amazon and Option Care Health.

“This acquisition will enhance our connection to consumers in the home and enables providers to better address patient needs as we execute our vision to redefine the healthcare experience,” CVS Health president and CEO Karen S. Lynch said in a statement at the time of the Signify deal.

It also was a bidder for primary care provider Cano Health but later dropped its bid.

In 2021, CVS Health’s subsidiary Aetna started Aetna Virtual Primary Care, the first solution in the U.S. to offer patients virtual access to primary care anytime and from anywhere.

That same year, it entered a five-year partnership with Microsoft to further digitalize its operations by creating more “customized health recommendations" for customers, including mobile alerts for cancer screenings and reminders for people at risk for melanoma to buy sunscreen.

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