Oak Street Health, Inc., through Oak Street Health, LLC, operates primary care centers within the United States serving Medicare eligible patients.
The company, through its centers and management services organization, combines an innovative care model with superior patient experience. The company invests resources into primary care to prevent unnecessary acute events and manage chronic illnesses. The company engages its patients through the use of an innovative community outreach approach. Onc...
Oak Street Health, Inc., through Oak Street Health, LLC, operates primary care centers within the United States serving Medicare eligible patients.
The company, through its centers and management services organization, combines an innovative care model with superior patient experience. The company invests resources into primary care to prevent unnecessary acute events and manage chronic illnesses. The company engages its patients through the use of an innovative community outreach approach. Once patients are engaged, the company integrates population health analytics, social support services and primary care into the care model to drive improved outcomes. The company contracts with health plans and the Center for Medicare & Medicaid Services (CMS) to generate medical costs savings and realize a return on its investment in primary care. As of December 31, 2022, the company operated 169 centers across 21 states, which provided care for approximately 224,000 patients. The company, together with its affiliated physician practice organizations, employed approximately 6,000 team members, including approximately 600 primary care providers as of December 31, 2022.
The company operates through its direct and indirect subsidiaries, primarily, Oak Street Health MSO, LLC (OSH MSO). OSH MSO operates as a management services organization and is in the business of providing management and other administrative services to the company’s affiliated physician practice organizations under long-term management and/or administrative services agreements (MSAs), pursuant to which OSH MSO manages certain non-medical services for the physician practice organizations and has authority over all non-medical decision making related to ongoing business operations.
The company mainly operates by maintaining long-term management services agreements with its affiliated physician practice organizations, which are owned, directly or indirectly, and operated by certain licensed physicians who hold shares, and which employ or contract with additional physicians to provide medical services. Under such agreements, the company provides and performs non-medical management and administrative services, including financial management, information systems, marketing, risk management and administrative support.
The company has entered into MSAs with affiliated physician practice organizations (each, a PC). On October 20, 2021, the company acquired RubiconMD Holdings, Inc. (Rubicon or RMD), a leading technology platform in New York providing access to specialist expertise. The company is the majority interest owner in two joint ventures: OSH-PCJ Joliet LLC and OSH-RI, LLC.
The Oak Street Platform is Re-Defining Primary Care
The company reimagined the approach to caring for a patient population with a high prevalence of chronic conditions and purpose-built the Oak Street Platform to improve its patients’ health outcomes and combat wasteful spending, providing a higher-quality alternative to the status quo. The company’s Oak Street Platform consists of centers, interdisciplinary care teams, canopy: purpose-built, end-to-end technology and care delivery approach.
Centers
The company’s novel approach starts with retail-like, community-based centers that implement a branded and consumer-focused design to create a welcoming environment that engages its patients. These centers are leased or licensed by OSH MSO or an affiliated entity and, pursuant to the terms of certain contractual relationships between OSH MSO and the company’s affiliated physician practice organizations, made available for use by the medical practices in the provision of primary care services. While traditional healthcare facilities are often located in medical office buildings that are removed from where patients spend a majority of their time, the company targets locations in highly accessible, convenient locations close to where its patients live.
Interdisciplinary Care Teams
The company utilizes a team-based approach in its patient-focused primary care delivery model and staff interdisciplinary care teams (Care Team) to execute its model. Each Care Team is led by a Primary Care Physician or Nurse Practitioner who is partnered with a Registered Nurse, a Medical Assistant and a Scribe to deliver value-based, coordinated care. As a center grows, the company increases the number of Care Teams serving that center in order to keep the average number of patients per Care Team low to ensure optimal care quality and patient experience.
The company’s Care Teams are trained in preventive and comprehensive care designed to address the whole person, across medical, social and behavioral attributes, in a welcoming and friendly manner. The company’s Care Teams meet daily to discuss their approach for each patient they will see that day and has weekly and monthly planning and review sessions for their sickest patients to assess their progress and determine the next steps in improving their health. Care is provided in several different ways, including face-to-face visits, telehealth visits, remote patient monitoring and in-home care.
Canopy
Canopy is a key driver of the success of the company’s care model and underlies every aspect of its day-to-day patient engagement and workflows. Canopy consists of internally developed software that connects a suite of population health analytics and technology applications designed to fit seamlessly into the company’s care delivery model and Care Team virtual and in-person workflows.
The company’s position in the healthcare ecosystem allows Canopy to access and capture an immense amount of data about its patients from a broad set of sources, including payor claims data, pharmacy data and medical records from hospitals and specialists. Canopy enhances the company’s ability to quickly structure and sort these disparate data sets to develop a comprehensive view of its patients across medical, behavioral and social health attributes. The company leverages artificial intelligence and machine learning capabilities to create and refine its clinical rules engine (predictive models and prescriptive algorithms) that informs care delivery and addresses hospital admissions and readmissions, medical costs and patient retention. The company’s algorithms are internally developed and optimized for the primary care setting, undergo rapid iteration cycles and benefit from clinician partnership and input.
Care Delivery Approach
The company’s care delivery approach consists of three core components:
Personalized Primary Care: The company provides preventative care addressing the needs of the whole person— medical, social and behavioral. Upon joining Oak Street Health, its patients undergo a structured geriatric assessment to understand their care needs. The company inputs these assessments, along with other available data, into Canopy, which analyzes multiple patient risk factors using its internally developed algorithms to stratify patients by their risk of experiencing an acute event. Based on this analysis, the company creates a tailored, individualized care plan that determines the ideal frequency of primary care visits and use of disease-specific programs. The company manages the total number of patients assigned to a Care Team at each center to allow each Care Team to spend more time with their patients and reduce wait times.
Proactive Patient Health Management: In addition to spending more time with its patients, the company’s smaller ratio of patients to Care Teams allows the company’s physicians to reserve time daily to review their patients’ care plans and each week conduct a deeper dive on high-risk patients. The Oak Street Platform leverages Canopy’s robust data and analytics to generate insights, which are fed into its custom-built workflow applications in order to identify additional actions to take, gaps to close and interventions to perform on its patients. This systematic review of each of its patients is designed to ensure that once a Medicare member becomes an Oak Street patient, they stay with their recommended health management plan, do not fall through the cracks of the healthcare systems and therefore remain on the path to better health.
Enhanced Clinical Services: Using Canopy’s internally developed algorithms, the company identifies high-risk patients with specific needs outside of primary care and provide multi-disciplinary interventions to improve outcomes and reduce cost. The company offers a number of programs that are integrated into its care model and that would not typically be available to patients under legacy fee-for-service models, including behavioral health, home-based primary care by dedicated provider teams, virtual digital offerings, medication management, social determinant support, 24x7 live phone support by its clinical call center and transitional care support to help its patients navigate the care journey outside of its centers.
The company’s care delivery model is the result of years of research, observation, iteration and enhancement, and it continues to invest in improving its approach.
Growth Strategy
The key elements of the company’s growth strategy are to increase patient enrollment within existing centers; add additional centers in existing markets; expand into new markets; movement of current patients from fee-for-service to value-based arrangements; and continue to optimize the Oak Street Platform.
Intellectual Property and Licenses
This filing includes the company’s trademarks and service marks, such as Oak Street Health and RubiconMD, which are protected under applicable intellectual property laws and are the property of it or its subsidiaries. This filing also contains trademarks, service marks, trade names and copyrights of other companies, such as Humana, Meridian/WellCare, and Cigna HealthSpring, which are the property of their respective owners. Based upon its experience providing care in 169 centers across 21 states as of December 31, 2022, the company continuously evaluates the needs of its providers and the tools that Canopy can provide and make improvements and add new features based on those needs.
Seasonality
The company’s business experiences some variability depending upon the time of year. The company experiences a significant portion of its at-risk patient growth during the first quarter, when plan enrollment selections made during the prior Annual Enrollment Period (AEP) take effect. In addition, in January of each year (year ended December 31, 2022), CMS revises the risk adjustment factor for each patient based upon health conditions documented in the prior year, leading to an overall increase in per-patient revenue. As the year progresses, the company’s per-patient revenue declines as new patients join it typically with less complete or accurate documentation (and therefore lower risk-adjustment scores) and patient attrition (for example, due to mortality) disproportionately impacts its higher-risk (and therefore greater revenue) patients.
Competition
The company competes with large and medium-sized local and national providers of primary care services, such as ChenMed, Cano Health, Centerwell and health system affiliated practices, for, among other things, contracts with payors, recruitment of physicians and other medical and non-medical personnel and individual patients.
Government Regulations
In addition to the FCA, the various states in which the company operates has adopted their own analogs of the False Claims Act (FCA). States are becoming increasingly active in using their false claims laws to police the same activities listed above, particularly with regard to Medicaid fee-for-service and Managed Medicaid programs. The federal regulations promulgated under the authority of HIPAA require the company to provide certain protections to patients and their health information. The Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (the HITECH Act), and their implementing regulations (collectively known as HIPAA) privacy and security regulations extensively regulate the use and disclosure of protected health information (PHI) and require covered entities, which include healthcare providers and their business associates, to implement and maintain administrative, physical and technical safeguards to protect the security of such information. Additional security requirements apply to electronic PHI. The HIPAA privacy and security regulations also require the company to enter into written agreements with certain contractors, known as business associates, to whom it discloses PHI.
History
Oak Street Health, Inc. was founded in 2012. The company was incorporated as a Delaware corporation in 2019.
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