Oak Street Health invests only in value-based care

By | June 20, 2019

Oak Street Health is all in on value-based care.

The network of primary care providers has no fee-for-service reimbursement.

Oak Street serves Medicare, Medicaid and dually-eligible members through full capitated risk payments. It takes the full premium through Medicare and Medicaid and then pays all of a patient’s downstream costs, from healthcare services through prescription drugs.

“We take full accountability of the patient,” said Dr. Griffin Myers, co-founder and chief medical officer. “If we don’t take care of the patient, we go out of business.”

The provider has an accountable care organization and has managed care products from disease management to specialty care. It is taking part in a fully value-based direct contracting program through the Centers for Medicare and Medicaid Services’  Primary Care First model starting in 2020.

Oak Street, based in Chicago, started in 2012 and now operates about 50 primary care centers in 11 regions: Cleveland, Chicago, Joliet, Illinois, Philadelphia, Waukegan, Illinois, Flint, Michigan, Detroit, Indianapolis and Fort Wayne, Northwest Indiana, Rockford, Illinois and Providence, Rhode Island.

Oak Street built its own system of paying claims.

“It took us six years,” Myer said. “We own and host data on our own cloud-based servers.”

Oak Street Health works with about 14 different health plans, including Medicare Advantage plans. It has longed worked with Humana’s Medicare Advantage and dual-eligible members. Other partnerships include MeridanCare and in April the provider announced a partnership with Aetna’s Medicare Advantage plans. 

Oak Street has made investments in technology, to take variation out of care models, Myers said. It uses Blue Button for patients to download their health records and the web-based decision support platform, Canopy.

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“Every dollar that we invest generates more than a dollar in savings,” Myers said.

The savings are invested into transportation and remote home monitoring. Oak Street is working on a tele-psychiatry suite.


The impact is in the results.

“We cut hospital readmission rates by 40%,” Myers said.

What Oak Street is trying to accomplish, is caring for patients in their own neighborhoods, what Myers calls the “critical last mile, problem.”

Where he worked at Massachusetts General Hospital, Myers, an ER doctor by training, said he saw the same people over and over again. What they needed was accessible primary care in their area that was personal, equitable and accountable. Oak Street offers accessible care, he said.


“We’re stuck in a system where the incentive is to do more,” Myers said. “We want empty hospitals. Value-based care is any mechanism of reimbursement that’s not fee-for-service. It aligns the incentive of patient with provider.”

Many technology vendors are trying to align these incentives, but they lack the patient relationships.

“We’re seeing so many of these vendors,” Myers said. “Amazon is one”


“The most interesting thing from Amazon is that its opened shops, two in Chicago,” Myers said. “I find that telling in the last-mile program.”

Amazon has opened an estimated four AmazonGo stores with automated check-out brick and mortar centers in the Chicago area, at a time when many physical retail stores have been closing their doors.

The fact that Amazon is bucking this trend by investing in physical locations,  tells Myers there is still a need for neighborhood access to services.

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“Healthcare is very unique in that it requires human interaction at the ‘last mile,’ and Amazon is the furthest ahead of the pack in that capacity. Amazon already has millions of people that physically interact with their organization every day. Not only do they deliver packages to our homes, but they own Whole Foods and a growing number of brick-and-mortar stores where customers can eat, shop or hangout. And, even though I appreciate all the Futurists’ predictions, in our lifetime, healthcare is going to rely on people actually putting their hands on patients and caring for them.”

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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