Roses are red, Signify is blue, primary care is hot…
Our corner of the internet is still buzzing with the hot goss of another acquisition from CVS. This time, CVS successfully courted Oak Street Health—after weeks of “will they or won’t they?”—into becoming the latest darling of its “premier Medicare value-based care platform.” Five years after the merger with Aetna, CVS continues a buy-and-build strategy, contributing assets step-wise in order to create a comprehensive platform that stands out in the value-based primary care market. Though the stated vision here—and current buzz—is all about primary care and Medicare, we wonder whether Oak Street’s previous acquisition of RubiconMD could eventually position CVS to compete in a growing cluster of retail-orchestrated specialty providers.
This move doesn’t stand alone—and it won’t be the last enterprise-startup meet cute we see beyond this cuffing season. We expect 2023 to be a big year for M&A in digital health, as a slower funding environment will make this exit path more attractive to late-stage startups. Buyers will capitalize on good timing and a strong pool of assets, and go shopping. Our advice to those looking for a digital health valentine? Seize the opportunity of this market moment, steer clear of shiny objects, and diligence the ways in which M&A deals may lead to happily-ever-afters (and long-lasting value).
xoxo,
Rock Health
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