Oak Street Health buys virtual specialty-care firm RubiconMD for $130M

Oak Avenue Well being on Thursday mentioned it acquired RubiconMD, a startup that gives telehealth specialty consults to primary-care medical doctors.

The first-care supplier bought RubiconMD for $130 million in money, with the potential for an extra as much as $60 million in money or a cash-and-stock mixture based mostly on efficiency milestones.

Oak Avenue, which went public last year, affords a capitated mannequin of managing take care of high-needs Medicare sufferers. The corporate plans to combine RubiconMD’s companies in order that its clinics can present digital specialty consults, which can permit its primary-care medical doctors to handle sufferers’ care when attainable and streamline referrals to specialists as wanted, firm officers mentioned in a news release.

Based in Chicago in 2012, Oak Avenue has expanded to greater than 100 primary-care facilities in 18 states. The corporate posted $353.1 million in income for this yr’s second quarter, up 64.7% year-over-year, and a $100.3 million web loss, in comparison with a web lack of $26.8 million the year-ago quarter, based on a filing with the Securities and Alternate Fee.

Oak Avenue has been operated at a loss since its founding.

“Oak Avenue Well being is on a mission to rebuild healthcare appropriately, which we’re doing by specializing in preventive care and driving extra assets into the first care setting,” mentioned Mike Pykosz, Oak Avenue’s CEO, in a information launch. “RubiconMD’s know-how platform and nationwide footprint permits us to scale the mannequin throughout our present and future markets to additional our mission.”

There have been 203 mergers or acquisitions of digital well being corporations within the first three quarters of 2021, based on information compiled by Digital Health Business & Technology. That is up from 132 digital well being M&A offers within the first 9 months of 2020, and up from 125 and 172 transactions throughout the identical intervals of 2019 and 2018, respectively.

RubiconMD, a startup that is raised $37.9 million since its founding in 2013, contains a community of greater than 230 specialists in cardiology, nephrology, pulmonology and different main specialties. It serves greater than 5,000 primary-care supplier prospects, primarily by means of eConsults—answering questions asynchronously by means of the corporate’s net platform.

Suppliers on common save $500 to $800 per eConsult with RubiconMD, largely by avoiding referrals, diagnostics or procedures, based on a presentation Oak Avenue shared with traders Thursday.

Oak Avenue is considered one of a rising variety of gamers in an evolving senior-care market.

In June, primary-care supplier One Medical introduced plans to purchase competitor Iora Health for $2.1 billion, in a deal that offers it a foothold within the Medicare Benefit market. Anthem in July mentioned it could partner with grocery chain Kroger for a collectively branded Medicare Benefit product and Humana has mentioned it plans to open new primary-care clinics for low-income seniors.

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