With nothing but silence coming from the Justice Department (DOJ) and the Federal Trade Commission (FTC), CVS Health has cleared one hurdle with its acquisition of Oak Street Health for $10.6 billion.
The antitrust waiting period has expired on the deal. Both Oak Street Health and CVS submitted paperwork on Feb. 24. The DOJ and FTC can still intervene and challenge the merger, but CVS and Oak Street Health are free to move forward with the purchase. CVS wants to finalize the deal by the end of the first half of 2023.
Bringing CVS Health and Oak Street Health together could reduce care costs and improve outcomes, particularly for those in underserved communities, where Oak Street focuses its services, according to CVS.
A key feature of Oak Street is its integrated technology solution, Canopy, which is used to determine the appropriate type and level of care for each patient. That care will be enhanced by CVS Health’s community, home and digital offerings, the companies said.
Oak Street’s Medicare-focused services complement CVS’s own assets, including its 1,100-plus MinuteClinics, in several ways. For example, MinuteClinics offer convenient access and additional clinical capacity for Oak Street, with preventive care and chronic care services for seniors. The merger also would enhance access to CVS’s nurse practitioner workforce, and CVS would be able to provide “wraparound” services such as medication reconciliation and post-discharge follow-ups.
By 2026, Oak Street Health expects to operate more than 300 centers.
The announcement of the Oak Street acquisition follows CVS’s agreement last year to acquire Signify Health, which has a network of physicians and other health care professional that conduct home-based patient visits and then connect patients to appropriate follow-up care and resources.
In March, CVS closed on a deal to purchase Signify Health for $8 billion. Signify Health, which competed with companies like Amazon for the CVS partnership, will continue to be a payer-agnostic business while being a part of the pharmacy retailer. Signify Health is perhaps best known for its home health business.
