Oak Street Health, a chain of primary care clinics geared toward the Medicare population, has acquired virtual specialty care provider RubiconMD for up to $190 million.

The deal includes a base $130 million in cash with up to $60 million added subject to performance, paid either in cash or a cash and stock combination, according to an investor presentation.

RubiconMD provides a network of specialists providing care in areas including cardiology, nephrology and pulmonology. 

“Carlos Reines and I founded RubiconMD to democratize medical expertise so that primary care providers can offer all patients the care they deserve, and we are thrilled for this next step with Oak Street Health,” Gil Addo, cofounder and CEO of RubiconMD, said in a statement. “We share similar cultures and values, as well as a commitment to delivering high-quality patient care and lowering costs, and we look forward to continuing to innovate together.”

WHY IT MATTERS

Some patients face difficulties accessing specialty care, particularly those who are low-income or live in rural areas. Oak Street Health is positioning its purchase as a way to deliver specialty care more easily, with a better experience for patients, improved care coordination and lower costs.

“Oak Street Health is on a mission to rebuild healthcare as it should be, which we are doing by focusing on preventive care and driving more resources into the primary care setting,” Mike Pykosz, CEO of Oak Street Health, said in a statement.

“Like traditional primary care, specialty care is broken for older adults, but together with RubiconMD, we can rebuild it into a model that meets patient needs. Integrating and virtualizing specialty care into Oak Street Health’s innovative model enables us to improve access, experience and coordination for patients while substantially lowering costs. RubiconMD’s technology platform and national footprint [allow] us to scale the model across our current and future markets to further our mission.”

THE LARGER TREND

In March 2020, RubiconMD scooped up $18 million in Series C funding, building on a $13.8 Series B from 2018. 

Primary care is a popular space for healthcare innovation. Other players include ChenMed, another primary care provider focused on seniors, and One Medical, which completed its purchase of Medicare-focused Iora Health in September and launched a digital chronic care product earlier this week. 

Virtual or hybrid primary care options abound too. Virtual care giant Teladoc Health’s Primary360 offering recently became available to payers. Propeller Health Chris Hogg, Joe Slavinsky and David Hubanks launched their own digital primary care company focused on chronic conditions last week.