- Because new patients and new centers are loss-making, Oak Street Health economics are not readily visible via GAAP accounting.
- The pandemic has led to direct COVID costs, delayed preventative care, and decreased community outreach, all worsening unit economics.
- Unit economics for centers should be positive, once COVID abates, risk scores are adjusted, and the preventative care model kicks in.
- Even if Oak Street is found liable for a Claims act violation, the settlement will likely be relatively inconsequential (~$10 million, based on similar prior cases).
- The high growth rate and incredibly long runway for growth make for a potential multibagger.
For further details see:
Oak Street Health: Long-Term Economics Obscured By Short-Term Headwinds