Oak Street Health moves into Philadelphia market with acquisition
A Chicago-based network of primary care clinics serving the Medicare population is set to move into the Philadelphia market.
Oak Street Health's acquisition of CityLife Neighborhood Clinics' Medicare business took effect Tuesday. Geoff Price, Oak Street's co-founder and chief operating officer, declined to comment on financial terms of the deal.
The company will hire additional employees at its Oak Brook service center to support the growth, Price said. It will also hire new employees and roll out its technology platform at CityLife centers in Philadelphia, transitioning operations to its care model in 90 to 120 days, he added.
In addition to CityLife's familiar focus—including primary care for Medicare and Medicaid members, and preventive care services like behavioral health – Price said the company's smaller size made it an attractive acquisition.
"They didn't have quite as many resources to invest into their care team as Oak Street does," Price said. "So we can bring some additional process and technology to bear. It also is a nice extension of our mission to redefine how health care is delivered for Medicare patients who don't always have good access."
Oak Street announced in July that it would expand beyond the Midwest with three new Philadelphia centers, which Price said are expected to open next month.
"We found that Philadelphia is a city that has a lot of Medicare patients but not a lot of access to high quality primary care," Price said. "We felt it was a market we could make an investment in and have growth in 2018, and also have a foundation for further growth in the city … This (CityLife acquisition) is a way for us to accelerate our entry into Philadelphia."
Price didn't specify which markets Oak Street would look to next, but he did note that "Philadelphia is a good first step for further expansion on the East Coast."
When asked what role Chicago might play in the company's expansion, Price said he "anticipate(s) it being a hub for us for a long time. That said, our ambitions are big. I hope there are other markets that eventually get bigger."
The growing network of primary care centers currently serves about 50,000 patients in 40 locations across Pennsylvania, Illinois, Indiana, Ohio and Michigan. It could reach nearly 75,000 patients once all seven Philadelphia centers are up and running, according to the company.
"Oak Street Health expands into Philadelphia market with acquisition" originally appeared Crain's Chicago Business.
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