Primary care startup Oak Street Health plans to open new clinics in two states

Dane Finley

Feb 18, 2020, 21:14 IST

Primary care startup Oak Street Health plans to open new clinics in two states

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Chicago-based primary care startup Oak Street Health announced that it will open clinics in two more states - Texas and Tennessee - this year, according to FierceHealthcare.

For context, Oak Street Health operates a network of clinics that focus on providing primary care to Medicare-eligible senior citizens in the US, and it currently operates in seven states. The primary care startup plans to open the new clinics in major metropolitan areas: It will open two locations in Memphis this winter, and one in the Dallas-Fort Worth area this summer.

Oak Street Health's expansion strategy builds on its concerted efforts to prove that its novel approach to primary care is a viable one. Oak Street CEO Mike Pykosz told FierceHealthcare that the startup's first few years of operation were centered around proving that its primary care model could work, and the natural next step would be to expand into more areas.

And to date, Oak Street's approach has paid off: In January 2019, the primary care startup deployed a clinical decision support tool that reduced hospital readmissions by 26%. And Pykosz noted that Oak Street has measured a 49% reduction in emergency room visits - which likely helped the startup mitigate avoidable costs, considering the US is slammed with over $30 billion annually on unnecessary emergency treatment. And since it's seeing success by improving patient outcomes and boosting savings in the markets it currently operates in, it makes sense that the startup is expanding into new areas.

The startup could become a bigger disruptive force if it can poach consumers from competing providers - and its innovative, senior-focused approach may be an attractive enough proposition. Oak Street will now operate in nine states with more than 50 centers that serve about 70,000 Medicare patients, per FierceHealthcare. And the startup is also planning to grow in the states where it currently operates, adding a fourth center in Cleveland, three new centers in Detroit, and a second location in the Greensboro-High Point metro area of North Carolina.

With aggressive expansion plans in 2020, we could see more seniors flock to the startup - especially considering its innovative approach to care: Oak Street touts a variety of perks, including more time with doctors, a 24/7 patient support line, and same-day and next-day appointments. And the startup could also appeal to older consumers by helping them make it to their appointments, considering transportation barriers to care disproportionately affect seniors: Oak Street partnered with ride-hailing titan Lyft to provide seniors with rides to and from their appointment.

If competing primary care providers are unable to provide a comprehensive care experience in line with Oak Street's, we could see more seniors jump ship - and with senior citizens expected to account for 20% of the US population by 2030, we expect to see primary care startups continue to tap into this market as a pillar for growth.

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