Oak Street Health has hit the ground running in the month since CVS Health added the primary care provider to its health care business division.
cvs health Found a prestigious primary care asset in its portfolio while finalizing it $10.6 billion acquisition based in chicago Oak Street Health In May. And Oak Street gained access to its new parent company’s arsenal of resources that could advance its long-term strategy, CEO Mike Pykoz told Modern Healthcare.
oak street plans increase its footprint The provider announced Wednesday that it has entered four new states this year, expanding its presence in existing markets. At its current pace, Oak Street is on track to operate 300 clinics by 2026, but Piekoz said the company is being careful not to overextend itself.
Piekoz spoke Thursday with Moderna Healthcare about Oak Street’s expansion plans and how CVS Health supports its goals. The interview has been edited for length and clarity.
What do you hope to achieve from your partnership with CVS Health?
We’re proud of what we’ve accomplished, but we need to take Oak Street to more people.
There’s no healthcare company in the ecosystem that has the breadth of CVS — whether it’s the retail footprint, the pharmacies, or the Aetna health plan business. We’re excited to partner with all those parts of CVS to accelerate our ability to see more patients, open more channels to care for those patients, and better coordinate patient care.
CVS also bought Signify, the largest home-based health risk assessment company. What we’ve heard when talking to Signify is that a significant portion of people who go in for a health-risk assessment are suffering from chronic diseases and need a doctor. What a great opportunity for us to be their greatest care provider.
More than 90% of Oak Street’s centers are located in under-served areas and treat patients with incomes below 300% of the federal poverty level. As your company expands, does it aim to continue serving this population?
The communities we’re visiting in 2023 are very similar to the communities we visited last year and the ones we started in 2013. I hope this continues.
We view our addressable market as middle- to low-income older adults, blue-collar workers, and the most challenged neighborhoods in large and medium-sized cities. When you look at our addressable market, it’s 30 million Medicare beneficiaries. We would need 10,000 Oak Street centers to take care of those people.
you know what? If CVS opens 10,000 stores, it’s possible.
Do you have projections for patient visits and revenue in 2024?
We’re pretty early in the process where we’re still learning what’s going to work and what’s not going to work. The first step is to conduct thoughts and understanding that are doing the work. If every idea works, you’re not thinking of enough ideas.
I would be very disappointed if we are not growing faster and providing higher quality care as part of CVS in 2024 than we were out of it. I’m optimistic that we will do that.
What kinds of controls are you putting in place to make sure Oak Street doesn’t grow too fast?
It is all about increasing the number of centres. We set up 50 centers in 2021 and the centers are doing great. But we actually reduced the number of centers from that 50 in 2022 and 2023 because of the financial conditions in the market. We were originally planning to set up 70 centers in 2022 and we had the infrastructure in place, but we ended up spreading them out over two years.
We’re also focused on building talent and leadership pipelines to drive expansion. We have the only accredited Values-Based Care Fellowship in partnership with Northwestern University’s Medical School, through which doctors finish residency, fellowship at Northwestern Medical School, MBA at night and part-time at Oak Street Let’s work After completing that, they become our medical directors. We also have a Nurse Practitioner Residency in partnership with the University of Michigan School of Nursing.
How many jobs will be created with the expansion of Oak Street?
A mature center is going to have around 50 people including doctors, nurse practitioners, nurses, medical assistants, social workers, receptionists, health coaches and others.
We try to hire as many people as possible from the communities we serve because we want to help these communities. We also think it leads to better care because you are now able to provide culturally competent medicine.
Are you facing challenges in staffing these new centres?
Hiring doctors and nurse practitioners has never been easier. This was the case when we opened in 2013, and it is still the case today. So we have done all the things to build the pipelines.
Then there is the hiring of medical assistants, nurses, receptionists, community health workers and social workers. There’s a micro-market around each one of those roles and varying levels of difficulty in getting hired. It’s certainly not as hard as it was to get hired for non-credentialed or non-licensed jobs in years past.
Is there talk of expanding beyond primary care into more specialties or types of care?
Yes and no Today we have some experts. We have a very strong behavioral health program that employs psychiatrists and social workers. While we can get same-day or next-day access to MRIs in Chicago, there is a three-month wait to see a psychiatrist. If you have a behavioral health concern that isn’t addressed, you may not be able to manage your diabetes or other chronic conditions.
We are not looking to buy any big multispeciality group. To be extreme, we will never have a hospital in Oak Street because there are more hospital beds in this country than we need. It’s the same thing around imaging centers. We’re not going to try to do that.
I hope we will have 10,000 centres, but I doubt we will be able to do that, so we also need other people who provide value-based care. This could be a great solution to many of our wider social problems.
Caroline Hudson contributed to this story.