Pharmacy and retail giant CVS Health (NYSE: CVS) is exploring buying value-based health care provider Oak Street Health (NYSE: OSH) in a deal that could be valued at more than $10 billion.
That is according to a report published in Bloomberg, which noted that a transaction is not a certainty. If Oak Street changes hands, the deal could be reached in a matter of weeks, Bloomberg reported.
Representatives for CVS and Oak Street Health declined to comment on the rumor when reached by Senior Housing News.
Value-based care is a growing trend in senior living, with other companies in the space expanding rapidly in 2022.
Oak Street has forged ties with senior housing organizations in the past, including a partnership in 2020 to connect residents of affordable assisted living communities in Illinois with primary care. Should a deal occur, a CVS acquisition of Oak Street would give it a new link into the senior living industry.
Chicago-based Oak Street, founded in 2012, aims to create value for Medicare beneficiaries by reducing expensive hospitalizations and finding other efficiencies. The company’s profitability hinges on how well it reduces costs for health care plan providers. To do that, Oak Street uses an interdisciplinary care team to perform check-ups, preventative screenings and telehealth services.
Oak Street went public in the first year of the Covid-19 pandemic. At the time, it was lauded by executives in senior living, who said the company could play an important rule in connecting residents with more affordable primary care services.
Since 2020, Oak Street has more than tripled the number of clinical locations it operates to 169. Its clinics have a “retail-like” feel and are supported by a tech platform that was purpose-built.
The deal would be yet another indication that behemoths in health care and retail still have their sights set on changing how care is delivered to older adults. Last September, CVS announced it was acquiring in-home health care company Signify Health (NYSE: SGFY) in an $8 billion deal. The company also in 2018 closed its mega-deal to acquire insurer Aetna.
News of a potential sale led to 26% jump in Oak Street stock which ended the day at $28.77 per share. CVS shares fell 0.92% on the day, closing at $90.65 per share.
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