Oak Street Health
CVS-owned chain of primary care clinics for Medicare seniors, paid by value-based capitated contracts.
On the record
Checkpoint: CVS Q2 2026 earnings call on Healthcare Delivery segment losses and clinic closures
The call
Oak Street keeps losing money inside CVS while bigger rivals run the identical model at larger scale, and CVS is now shrinking it rather than growing it.
Oak Street Health runs doctor's offices that take flat payments to care for Medicare seniors, keeping them healthy instead of letting them get expensive hospital visits. The problem is that Humana and UnitedHealth do the exact same thing but much bigger and better, because they own both the doctor's offices and the insurance company at the same time, so they save money in ways Oak Street cannot match. CVS has closed 16 clinics and cut 219 jobs in 2025, written off $5.7 billion, and stopped growing the business, which means the company's leaders do not think Oak Street will ever make money, even though CVS owns both the clinics and an insurance company (Aetna) that should theoretically let it work.
Why
01
AI pressure: None apparent. AI tools could help manage chronic care risk scoring, but nothing yet targets Oak Street's clinic model directly. Could AI do the core job? Unlikely.
02
Bigger players: Humana CenterWell/Conviva and UnitedHealth/Optum. CenterWell and Optum run the same senior clinic model at bigger scale with tighter payer integration, squeezing Oak Street's margins and growth. Could a giant copy it? Yes, easily.
03
What protects it. Its own parent, CVS, owns Aetna and pharmacy distribution, giving Oak Street a captive patient funnel even while losing money.
What would change this call
CVS Q2 2026 earnings report (~August 2026) on Healthcare Delivery segment losses. Whether Oak Street's losses narrow or CVS takes another impairment.
Confirmation that all 16 announced clinic closures completed by end of February 2026. Whether retrenchment matches or exceeds planned scope.
Any CVS statement on strategic alternatives for Healthcare Delivery segment. Whether CVS is preparing to shrink, sell, or exit Oak Street.
Confirmation that all 16 announced clinic closures completed by end of February 2026. Whether retrenchment matches or exceeds planned scope.
Any CVS statement on strategic alternatives for Healthcare Delivery segment. Whether CVS is preparing to shrink, sell, or exit Oak Street.
Key numbers
- $5.7B goodwill impairment tied to Oak Street
- $504M operating loss in 2024
- 219 layoffs and 16 clinic closures announced
Named risks
- Sustained ~$500M annual losses persisting years after CVS acquisition.
- CVS froze new clinic openings for 2026 and closed 16 locations, signaling deprioritization.
- Loss of Aetna Medicare-Medicaid contract for 2026 directly triggered 219 layoffs.
- WARN Act investigation into layoff notice compliance could produce litigation.
- Prior $60M DOJ kickback settlement highlights compliance exposure under Anti-Kickback Statute.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| CenterWell/Conviva (Humana) | gaining on | Serves ~345K seniors across 15 states with payer integration, as of Nov 2024 |
| UnitedHealth/Optum | gaining on | Largest Medicare Advantage payer-provider integrator, runs same clinic model at greater scale |
| VillageMD (Walgreens) | contesting | Closed hundreds of clinics in 2024 amid financial strain, mirroring Oak Street's 2025 retrenchment |
Questions people ask
- Is Oak Street Health profitable in 2025?
- No. Oak Street posted a $504M operating loss in 2024, and parent CVS took a $5.7B goodwill impairment tied primarily to Oak Street on October 29, 2025, reflecting continued unprofitability roughly a decade into operations.
- Is CVS closing Oak Street Health clinics?
- Yes. On October 27, 2025 CVS announced it would close 16 underperforming Oak Street clinics, about 7% of its footprint, by end of February 2026, and would not open any new centers in 2026, reversing prior growth plans.
- Who owns Oak Street Health?
- CVS Health Corporation has owned Oak Street Health since completing a $10.6B all-cash acquisition at $39/share on May 2, 2023, financed partly with a $5.0B term loan. Oak Street is no longer independently listed.
- Is Oak Street Health laying off employees?
- Yes. CVS confirmed 219 Oak Street Health job cuts in Chicago-linked roles, executed in two WARN-filed tranches of 191 (January 2026) and 28 (February 2026), tied to restructuring and the loss of an Aetna Medicare-Medicaid contract for 2026.
- Who is Oak Street Health's biggest competitor?
- CenterWell Senior Primary Care and Conviva (Humana subsidiaries) are described as the largest senior-focused value-based primary care providers in the US, serving about 345,000 seniors across 15 states as of November 2024, with tighter payer integration than Oak Street.
- Is it risky to join Oak Street Health right now?
- There are active warning signs: CVS closed 16 clinics and froze 2026 openings (Oct 2025), cut 219 jobs through Feb 2026, and booked a $5.7B impairment on the business, indicating retrenchment rather than expansion as of early 2026.
Timeline
- 2026-05-06Erie, PA Oak Street clinic (opened 2024) permanently closes; pharmacy stays open
- 2026-05-06CVS Q1 2026 results beat estimates, guidance raised, driven by Aetna and Pharmacy
- 2026-02-26WARN filings confirm 219 layoffs completed in two tranches, 191 plus 28
- 2025-11-19CVS confirms 219 Oak Street job cuts tied to restructuring and lost Aetna contract
- 2025-10-29CVS books $5.7B goodwill impairment tied primarily to Oak Street
- 2025-10-27CVS announces closure of 16 Oak Street clinics, freezes 2026 openings
- 2024-09-19Oak Street pays $60M to settle DOJ Anti-Kickback Statute allegations
- 2023-05-02CVS completes $10.6B all-cash acquisition of Oak Street Health
- 2020-08Oak Street IPOs on NYSE under ticker OSH, raising $328M
- 2012Oak Street Health founded by Mike Pykosz, Griffin Myers, Geoff Price
Revision history
22 July 2026
First assessed. Protection under test. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- CVS hikes 2025 guidance despite goodwill impairment charge on healthcare delivery (2025-10-29)
- CVS Health completes acquisition of Oak Street Health (2023-05-02)
- CVS plans to close 16 Oak Street clinics (2025-10-27)
- Oak Street Health posts $510M loss, outlines risks to CVS acquisition (2023-03-01)
- Fierce Healthcare Layoff Tracker (2025-11-18)
- CVS' Oak Street Health to cut 219 jobs (2025-11-19)
- 219 workers, 2 WARN notices from Nov 2025 to Feb 2026 (2026-02-26)
- Oak Street Health Number of Employees 2026 (2026-06-29)
- Health Care Delivery (2026-03-26)
- Oak Street Health pays $60M to settle allegations of kickback scheme (2024-09-19)
- Value-Based, Senior-Focused Primary Care is Transforming Healthcare for Older Adults (2024-11-11)
- CVS loses $4B in Q3, plans to close some Oak Street clinics (2025-10-29)