Oak Street Health, Inc. (OSH) 10-Q Quarterly Report November 2022

CHICAGO, IL – Oak Street Health, Inc. (NYSE: OSH, or the “Company”), a network of value-based primary care centers for adults on Medicare, today reported financial results for its third quarter ended September 30, 2022.

“We reported another strong quarter of results driven by the dedication and execution of our team leading to consistent center-level performance. Our focus remains on expanding nationally to bring our model to more patients while greatly improving the health and well-being of the patients we serve, leading to strong financial results and realization of our mission of rebuilding healthcare as it should be,” said Mike Pykosz, Chief Executive Officer of Oak Street Health.

Third Quarter 2022 Financial Highlights

•Total revenue was $545.7 million, up 40% year over year.

•Capitated revenue was $537.9 million, up 43% year over year.

•The Company cared for approximately 145,000 risk-based patients and 209,500 total patients.

•Net loss was $(130.4) million1, compared to $(110.0) million in the third quarter of 2021.

•Adjusted EBITDA2 was $(88.3) million, compared to $(64.4) million in the third quarter of 2021.

•As of September 30, 2022, the Company operated 161 centers, compared to 110 centers as of September 30, 2021.

Outlook for Fiscal Year 2022


	Twelve-Months Ending December 31, 2022
	Low		High
(dollars in millions)
Centers	169		169
At-risk patients	157,000		159,000
Revenue	$	2,150.0	2,155.0
Adjusted EBITDA	$	(292.5)	(287.5)

We have not reconciled guidance for adjusted EBITDA to net loss, the most directly comparable GAAP measure, and have not provided forward-looking guidance for net loss, because of the uncertainty around certain items that may impact net loss, including stock-based compensation, that are not within our control or cannot be reasonably predicted. However, for fourth quarter and fiscal year 2022, depreciation and amortization is expected to be approximately $10.0 million and $35.0 million respectively.

Webcast and Conference Call

The Company will conduct a conference call Tuesday, November 11, 2022 at 8:00 AM Eastern Time to discuss these results and management’s outlook for future financial and operational performance. The conference call can be accessed by

1 Includes stock-based compensation of $30.8 million and $38.7 million for the third quarter of 2022 and 2021, respectively.

2 Adjusted EBITDA is a non-GAAP financial measure that is presented as supplemental disclosure and is reconciled to net loss as the most directly comparable GAAP measure as set forth in the accompanying “Adjusted EBITDA Reconciliation” section. We define adjusted EBITDA as as net loss adjusted to exclude stock-based compensation expense, depreciation and amortization, interest expense, net, transaction and offering costs, one-time in nature litigation costs, provision for income taxes and fair value adjustments related to assets and liabilities recorded in purchase accounting such as earn-out liabilities and intangibles and related to impairment of equity investments.

The following information was filed by Oak Street Health, Inc. (OSH) on Monday, November 7, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Oak Street Health, Inc.'s 10-Q Quarterly Report:

Financial - Expense Highlight
Due to the significant fixed costs associated with operating and managing our centers and the increases we experience in patient contribution on a per-patient basis the longer a patient is part of the Oak Street Platform, we generate significantly better center-level contribution margins (defined as (i) patient revenue, excluding Medicare Part D revenue minus (ii) the sum of (a) medical claims expense, excluding Medicare Part D related expenses, and (b) cost of care, excluding depreciation and amortization) as the patient base within our centers increases and matures and our costs decrease as a percent of revenue.

Legal - Other Highlight
An increase of $(60.2) million in cash outflows related to operating assets and liabilities primarily resulting from: Changes in accounts receivable due to the timing of collections and the growth in the number of at-risk patients; Changes in liability for unpaid claims due to the growth in the number of at-risk patients; and, Changes in accounts payable, accrued compensation and benefits and other liabilities mainly due to the timing of payments to our vendors.
Financial - Expense Highlight
In addition, we expect our corporate, general and administrative expenses to increase in absolute dollars for the foreseeable future to support our growth and because of the additional costs of being a public company.
Revenue - Product Highlight
As the year progresses, our per-patient revenue declines as new patients join us typically with less complete or accurate documentation (and therefore lower risk-adjustment scores) and our attrition skews towards our higher-risk (and therefore greater revenue) patients.
Revenue - Product Highlight
Investing Activities For the nine-months ended September 30, 2022, net cash provided by investing activities was $251.2 million, an increase of $1,067.1 million in cash inflows compared to net cash used in investing activities of $(815.9) million for the nine-months ended September 30, 2021 primarily due to the net cash inflows of $1,098.3 million from sales, maturities and purchases of marketable debt securities, offset by continued increased investments in our centers and purchases of property and equipment of approximately $(27.0) million.
Financial - Expense
1 Litigation costs included in...Read more
M & A - Other
Because patient contribution, platform contribution...Read more
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Also included in the operating...Read more
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Adjusted EBITDA We define adjusted...Read more
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Medical costs also depend upon...Read more
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To supplement our consolidated financial...Read more
Revenue - Product
This increase was driven primarily...Read more
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Operating Activities For the nine-months...Read more
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For the nine-months ended September...Read more
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When excluding these prior period...Read more
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Non-GAAP financial measures used by...Read more
Financial - Earnings
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Our cash and cash equivalents...Read more
Financial - Earnings
Patient contribution is intended to...Read more
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Investments in Growth: We expect...Read more
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2See "Non-GAAP Reconciliations" below for...Read more
Revenue - Product
Capitated revenue was $1,560.1 million...Read more
Financial - Cash Flow
The principal contributors to the...Read more
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34 Table of Contents Total...Read more
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As we are financially responsible...Read more
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Key Factors Affecting Our Performance...Read more
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Total Patients Total patients includes...Read more
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In our short history, we...Read more
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As a center matures, we...Read more
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The following table provides a...Read more
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Expand our Center Base within...Read more
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Our care model focuses on...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Oak Street Health, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Certification Of Chief Executive Officer Pursuant To Section 302 Of The Sarbanes

Exhibit 31.2: Certification Of Chief Financial Officer Pursuant To Section 302 Of Sarbanes-Oxl

Exhibit 32.1: Certification Of Chief Executive Officer Pursuant To Rule 18 U.S.C. Section 1350

Exhibit 32.2: Certification Of Chief Financial Officer Pursuant To Rule 18 U.S.C. Section 1350

Ticker: OSH
CIK: 1564406
Form Type: 10-Q Quarterly Report
Accession Number: 0001564406-22-000028
Submitted to the SEC: Mon Nov 07 2022 4:53:18 PM EST
Accepted by the SEC: Mon Nov 07 2022
Period: Friday, September 30, 2022
Industry: Health Services