Primary medical care center operator Oak Street Health Inc. (OSH:NYSE), which provides value-based primary care for Medicare eligible adult patients, on Monday announced financial results for the fourth quarter and full year of 2021 ended Dec. 31, 2021.
Oak Street Health's Chief Executive Officer Mike Pykosz commented, "We reported a strong quarter with results favorable to the high end of guidance across metrics. … The quarter caps a year in which we advanced significantly on our journey to transform health care for older adults."
Pykosz continued, "We opened up 50 centers across eight new states in 2021 and generated over $1.43 billion of revenue in 2021, driving year over year growth of 62%. We continued to build on our core platform, adding new care model capabilities including our acquisition of RubiconMD, which will allow us to integrate a comprehensive virtual specialty network into our care model.
"We were thrilled to be selected by the AARP as their exclusive primary care provider to carry the AARP name. Looking ahead, we remain steadfast in our mission to rebuild health care as it should be and to provide high quality value-based care to the Medicare-eligible population," Pykosz added.
The company's Chief Financial Officer Tim Cook advised that for FY/22 the company is modifying the pace of opening new internally financed centers.
Cook elaborated further stating, "We expect to open 40 new centers in 2022 and 30 to 40 new centers in 2023 and 2024. This pace will drive the business to profitability by 2025, sustain a compounded revenue rate in excess of 40% over the next several years, and importantly, allow Oak Street Health to grow strategically despite the current uncertainty in the equity markets."
Oak Street Health listed that it increased the number of the centers it operates to 129 centers as of Dec. 31, an increase of 50 versus the 79 centers it operated as of one year before. The company noted that throughout FY/21, "it cared for approximately 114,500 risk-based patients, representing 75% of its total patients."
The company reported that for Q4/21 total revenues increased by 58% to $394.1 million, compared to 248.7 million in Q/20. During Q4/21, the firm posted a net loss of $138.6 million, or $0.62 per share, versus a net loss of $87.2 million, or $0.40 per share in Q4/20.
Oak Street reported that total revenues in FY/21 increased by 62% to $1.433 billion, compared to $883 million in FY/20. The company indicated that capitated revenue in FY/21 grew by 64% year-over-year to $1.397 billion.
The company reported a net loss of $414.6 million in FY/21, versus a net loss of $192.1 million in FY/20.
Oak Street offered some forward guidance and advised that for Q1/22 it expects to operate 138-139 centers that will provide care to 122,500-123,500 at-risk patients. The firm estimates that this will generate revenues of $505 million to $510 million and result in an adjusted EBITDA loss of $45 million to $50 million.
The company indicated that for FY/22, it is planning for the operation of 169 centers that will offer care to 152,500 to 157,500 at-risk patients. The firm estimates that this will generate revenues of $2.1 billion to $2.135 billion and result in an adjusted EBITDA loss of $290 million to $325 million.
Oak Street Health is headquartered in Chicago, Ill., and operates a network of value-based primary care centers for adult Medicare patients. The firm runs greater than 125 centers in 20 U.S. states and highlighted that it is "the only primary care provider to carry the AARP name." The firm's primary care network centers assume the full financial risk for its patients and emphasizes quality of care rather than volume of services provided.
Oak Street Health started the day with a market cap of around $4.2 billion with approximately 240.9 million shares outstanding and a short interest of about 9.2%. OSH shares opened 3% higher Tuesday at $18.06 (+$0.55, +3.14%) over Monday's $17.51 closing price. The stock has traded today between $18.01 and $23.12 per share and is currently trading at $22.38 (+$4.87, +27.81%).
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