Oak Street Health
This case describes the founding and evolution of Oak Street Health, a primary care provider operating in the “value-based” health care space, focused on Medicare patients in the United States. This case introduces students to value-based health care in the United States, in which providers assume full risk for the overall cost of patient care under a system of capitated payments, and contrasts it with traditional fee-for-service health care.
Oak Street Health was focused on a resource-intensive model of primary care clinics in more than 20 states, primarily serving low-income seniors. The company had grown rapidly since 2013 and had an IPO in 2020. However, the company was facing increasing competition from large players as health care groups like CVS became more vertically integrated and tech companies like Amazon expressed interest in the industry. This poses strategic questions for Oak Street on how fast to continue growing and what next steps to take, and how to deal with competition while driving toward profitability in a challenging macroeconomic environment.