Oak Street Health, a healthcare provider based in Chicago, has announced plans to lay off 219 employees in early February 2024. This decision comes as part of a restructuring effort by its parent company, CVS Health, which is also closing health centers nationwide. Approximately 80 positions affected by the layoffs are located in Illinois, while the remainder are associated with employees at the Chicago office.
In a statement, spokesperson Amy Thibault emphasized that the company regularly seeks ways to enhance operational efficiency. “We regularly look for ways to operate more efficiently to better serve our clients, consumers, and patients,” she said. The restructuring is aimed at driving high performance, reducing costs, and positioning the company for ongoing success.
The layoffs are part of a broader strategy, as CVS Health revealed its intention to close 16 Oak Street Health centers across the United States by February 2024, including one location in Chicago. While Thibault did not provide clarity on whether the layoffs are directly linked to these closures, she mentioned that affected workers may apply for other positions within CVS Health.
CVS Health acquired Oak Street Health for 10.6 billion USD in 2023. Founded in 2012, Oak Street specializes in providing primary care to Medicare recipients, particularly targeting low- to moderate-income seniors in underserved communities.
The healthcare landscape has seen significant shifts in recent years, with companies like CVS and Walgreens attempting to expand into primary care. Walgreens invested heavily in primary care provider VillageMD, aiming to establish clinics in 1,000 of its stores by 2027. However, Walgreens has since reconsidered that plan and announced it is exploring options to divest all or part of its VillageMD business. Recently, Walgreens was acquired by a private equity firm, further complicating its strategic direction.
Despite these challenges, CVS Health remains committed to its investment in Oak Street Health. In a statement last month, the company reaffirmed its belief in Oak Street’s effective care model and confirmed that it would continue to operate 230 centers across 27 states following the closures. The company is currently addressing high medical costs and navigating challenges related to insurer payments and federal policy changes.
As Oak Street Health navigates this transition, the focus will be on maintaining quality care for its patients while managing the financial pressures that have recently emerged in the healthcare sector.
