- Oak Street Health is planning to enter two new states early next year, along with opening additional clinics in existing regions, the value-based primary care company announced Tuesday.
- As part of its 2021 growth plans, Oak Street intends to open centers in New Orleans, along with Columbia and Greenville in South Carolina, bringing its total footprint to 13 states. The company also plans to launch additional clinics in Akron, Ohio, and Raleigh, North Carolina, early in the year.
- Oak Street went public in August amid rising interest in primary care networks on Wall Street. The capital raised is being used to accelerate its expansion plan.
The COVID-19 pandemic has proved a major wrench in the works of many healthcare organizations' operations, but not as much for Oak Street, which has enjoyed a year of steady growth.
In its IPO paperwork filed with the Securities and Exchange Commission in July, the Chicago-based medical network noted COVID-19 is a source of uncertainty for the company that could hit Oak Street's high-risk senior population hard, but has also spurred an increased focus on health and well-being that's driven consumer demand for its services.
Oak Street's IPO priced at $21 a share, but rocketed 90% in its first day of market trading in early August, raising the operator about $350 million and placing its market value at around $5 billion. At Wednesday morning open, Oak Street stock was up more than 160% since its IPO.
Accelerated by the influx of new capital, Oak Street has aggressively expanded throughout 2020. It's currently operating more than 80 centers across Illinois, Michigan, Ohio, Rhode Island, Texas, Mississippi, Indiana, North Carolina, Pennsylvania, Tennessee and New York. That's up from about 50 centers at the beginning of this year.
Oak Street focuses on Medicare patients — a lucrative space as the U.S. population ages — but offers services to patients with a variety of insurance options. The majority of its about 90,000 patients are under a value-based managed care model, allowing the company to offer a variety of medical, behavioral and social health services ranging the gamut from in-person or telehealth physician visits to fitness classes to educating seniors on Medicare options.
Oak Street says it has reduced patient hospital admissions and emergency department visits by more than half compared to Medicare benchmarks since its founding in 2012.
The news comes amid growing interest in operating clinics from payers, providers, drug chain giants and other players banking that user-friendly, brick-and-mortar clinics in the community will lead to higher consumer utilization.
On the payer side, Humana launched a venture earlier this year to double the size of its senior-focused primary care center network, while UnitedHealthcare said late last year it planned to open 14 Medicare service centers in Walgreens stores in 2020.
And mirroring similar moves from other retail giants this year, Walmart, announced in September it was partnering with Oak Street to operate three health clinics in Walmart Supercenters in Texas. The first location opened in late October in the Dallas-Fort Worth area.
Other primary care chains have seen strong growth in 2020 as well, including San Francisco-based One Medical, which filed to go public in January. The chain saw revenue jump 46% year over year to almost $102 million in the third quarter, driven partially by employer demand for return-to-work programs.
For its part, Oak Street saw its revenue jump 57% to $218 million in the third quarter — its first as a public company — surpassing analyst expectations.