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July 10, 2020, 5:59 p.m. EDT

Oak Street Health files for IPO

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By Claudia Assis

Oak Street Health Inc. has filed for an initial public offering, vowing to "reimagine" how older adults with Medicare receive treatment and saying the coronavirus pandemic has highlighted challenges for the fee-for-service business model of "legacy" healthcare providers. The Chicago-based company filed to sell $100 million worth of shares, although that number is often a placeholder used to calculate filing fees. Oak Street, founded in 2012, said it provides healthcare for about 85,000 people and has about 2,300 employees. The company lost $24.6 million, or $39.63 a share, in the first quarter of 2020, compared with a loss of $17.1 million, or $27.59 a share, in the year-ago period. First-quarter revenue rose to $201.8 million from $117.4 million a year ago. Its Medicare-eligible patients are treated in "retail-like, community-based centers that implement a branded and consumer-focused design to create a welcoming environment that engages our patients," the company said. With the pandemic, "healthcare providers were faced with dwindling fee-for-service visits," putting a strain on "traditional healthcare providers," it said. Oak Street would list its stock on the New York Stock Exchange under the symbol OSH. Underwriters include J.P. Morgan, Goldman Sachs, and Morgan Stanley.

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