Oak Street Health: The Way To Play Value Based Care

Oak Street Health (OSH) is a primary care platform focused primarily on the Medicare Advantage population. The company seeks to drive improved outcomes for patients and reduced costs by payors. With capitated and full-risk contracts, interests between payors and Oak Street Health are aligned and have allowed the company to drive significant value. Given the ongoing COVID-19 pandemic, the fact that the company largely operates under capitated agreements provides a guaranteed revenue stream for the company. In fact, it is also potentially a net benefit since as outpatient volumes decline, the overall cost structure also goes down. Overall, the company has performed well even through COVID-19 and has recently touched all-time highs as seen in the chart below: