It has been two months since CVS Health closed on the $10 billion acquisition of Oak Street Health and the drugstore chain is planning to build more than 50 senior clinics in 25 states by the end of this year (up from 21 states currently), reports Forbes.
Oak Street currently employs about 600 primary care providers and more than 170 medical centers, and it will increase the number of health centers by another 50 to 60 in 2024, according to CVS.
“As Oak Street expands to additional geographies, these opportunities to drive higher patient growth will continue to increase,” CVS Chief Executive Karen Lynch told analysts and investors on a call Wednesday to discuss second-quarter earnings.
Also on that call, CVS showed growth for both earnings and revenue, however, its healthcare focus also resulted in continued cost-cutting measures, including 5,000 layoffs.
Lynch said that the new Oak Street clinics will be co-located with CVS pharmacies and the company has already identified additional locations for 2024. The expansion puts CVS on track to meet its original intended goals for Oak Street, where CVS said it will “have more than 300 centers, each of which has the potential to contribute $7 million of Oak Street Health Adjusted EBITDA at maturity.”
Up until now, CVS operated in-store clinics staffed by nurse practitioners and expanded healthcare services and products within its retail locations by converting certain store locations into HealthHUBs while it continues its push deeper into healthcare.
Last year, the pharmacy chain also agreed to spend $8 billion to buy home care provider Signify Health.
“We are accelerating patient growth through our broad community presence and ability to engage consumers across multiple channels,” Lynch said on the company’s earnings call. “Today, there are approximately 1 million Medicare eligible seniors who visit CVS pharmacies each week that are located near an Oak Street clinic.”
