CVS Considering $10B Purchase Of Oak Street Health

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CVS is reportedly looking to expand its healthcare offerings by purchasing Oak Street Health.

The acquisition would value Oak Street at more than $10 billion, Bloomberg News reported late Monday (Jan. 9), citing sources with knowledge of the matter who said talks between the two companies are ongoing. PYMNTS has reached out to both companies; CVS declined to comment and Oak Street did not reply.

The deal would further expand CVS’ move into the world of primary care. The pharmacy giant last year agreed to purchase Signify Health in an $8 billion deal.

Headquartered in Dallas, Signify has a network of 10,000 medical professionals in all 50 states and uses analytics and technology to offer in-home care to health plans, employers, physician groups and health systems.

“This acquisition will enhance our connection to consumers in the home and enable providers to better address patient needs as we execute our vision to redefine the health care experience,” said CVS Health President and CEO Karen S. Lynch. “In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach.”

Last year also saw the debut of CVS Health Virtual Primary Care, a virtual care solution available through a digital platform.

“The program connects CVS Health’s services, clinical expertise, and data for a more coordinated and consumer-centric health care experience,” CVS said in May 2022, adding it “enables consumers to choose care when and where they want, continuing CVS’ shift into primary care.”

The company was also considering the purchase of Cano Health, which operates primary care centers in eight states and works mostly with patients from the Medicare Advantage program.

Oak Street, founded in 2012, serves Medicare recipients and has locations in 21 states, according to its website. It specializes in preventative care, “including personalized wellness plans, integrated health services, and educational and social activities,” the website says.

And CVS isn’t alone in shifting more directly into healthcare. As PYMNTS noted in September of last year, “Big Retail” has helped usher the healthcare industry fully into the 21st century.

“For the Walmarts and the Amazons of the world, offering value care and virtual care creates a new avenue to connect payments to a broader ecosystem,” PYMNTS wrote.

To that end, Walmart joined forces with UnitedHealth Group in a deal that, among other things,  offers virtual healthcare services through a 10-year partnership. Amazon, meanwhile, announced last July that it was purchasing tech-powered primary care provider One Medical for about $3.9 billion.

 

Source: PYMNTS

Remedy And Kayne Anderson In Joint Venture Buy 13-Property MOB Portfolio In 8 States For $131M

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Remedy Medical Properties, in a joint venture with Kayne Anderson Real Estate, has acquired the Project Prism medical office portfolio, a collection of 13 properties in eight states totaling 300,328 square feet.

The fully leased assets traded for $131 million, with the participation of JLL. The previous owner was Montecito Medical Real Estate, CommercialEdge data shows.

The medical office buildings are leased on a long-term basis with a weighted average lease term of 10.4 years.

 “The properties’ tenants have strong patient bases and track records, some of them being nationally renowned companies,” Remedy CIO Joe Magliochetti stated in prepared remarks.

Optum-Marsh, Halo Breast Center, Jordan Young Institute and Precision Spine Care are some of the health-care providers that occupy the facilities. On-site medical services include orthopedics, neurology, gastroenterology, radiology, imaging and surgery, as well as general spine and pain management, family medicine and other services.

Previous Joint Venture Acquisitions

The Project Prism portfolio is not the first acquisition for the Remedy-Kayne Anderson duo, as the joint venture’s purchasing history dates back to early 2022. In February, the partnership, alongside MedProperties Realty Advisors, formed a $350 million-plus joint venture to recapitalize a 23-asset health-care real estate portfolio totaling more than 1 million square feet.

Later that year, the companies added eight medical office buildings to their joint investments. The properties, located in Florida, Texas, North Carolina and Tennessee, changed hands for $91 million.

 

Source: Commercial Property Executive

Baptist Health Care’s $650-million Pensacola Hospital To Open In The Fall

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In a recent interview with Florida Trend, Mark Faulkner, president and CEO of Baptist Health Care, talked about BHC’s $650-million hospital and 57-acre campus in Pensacola set to open in September.

CHALLENGES: “We broke ground on this project a few weeks after Hurricane Sally hit Pensacola hard in 2020 and also while in the midst of a pandemic. And yet we have remained on our original construction schedule for an opening on Sept. 23, 2023.

It’s been my experience in this project and others we’ve undertaken that challenges such as these bring out the best in people, especially high performers. And I think the challenges we’ve faced during the past two years have made us a better organization and, in a way, helped to re-create ourselves to better serve a rapidly evolving community.”

CHANGES: “Our original plan was to leave the top floor unfinished until our patient growth reached a point where we would need those additional beds. At the time we were projecting a modest annual patient growth of 2.5%. But what we have experienced since then is patient growth far exceeding those projections. We realized we faced the risk of moving into a new hospital facility that would be already very full. Fortunately, we were not too far into the project to make the call to move forward with finishing the construction of the 10th floor that will give us additional general medical surgical beds.”

FUTURE: “We’re working with Pensacola-based Catalyst Healthcare Real Estate to develop a medical office building on our new campus. It would be essentially a master lease where we own the property and Catalyst would construct the building. Catalyst CEO Chad Henderson is surveying the market to see what the future demand is for new office medical space in Pensacola. We don’t know how it’s going to end up looking, whether it’s going to be a larger or smaller project, but we should know pretty soon what his analysis is.”

 

Source: Florida Trend