CVS Health to close 16 Oak Street Health primary care locations

Move over, Walgreens—there’s a new retail pharmacy going through financial troubles.

CVS Health announced last week it would close 16 of its older adult-focused primary care provider Oak Street Health locations by the end of February due to “elevated medical costs” and changes to CMS’s risk adjustment model and “payer dynamics,” CVS spokesperson Amy Thibault told us in an emailed statement.

CVS will still operate 230 Oak Street Health sites across 27 states. Aetna acquired Oak Street Health for roughly $10.6 billion in May 2023, when it had 169 centers across 21 states.

This comes following September news that CVS subsidiary Omnicare, which offers pharmacy services to long-term care facilities, had filed for Chapter 11 bankruptcy and was ordered to pay approximately $949 million in penalties.

And in October last year, rumors circulated that CVS might split up its pharmacy division from its insurance arm, Aetna, after its CVS Health CEO and President Karen Lynch stepped down following continued financial troubles.

Weathering the storm. But according to Peter Bonis, chief medical officer at market researcher Wolters Kluwer Health, these closures indicate a “rightsizing” for CVS. Just one recent challenge Bonis pointed to was the recently released 2026 Medicare Advantage (MA) star ratings. Aetna announced its star ratings had decreased from 88% of members being enrolled in plans with four or more stars in 2025 to 81% for 2026.

These cuts are also in line with the multiyear $2 billion cost-cutting plan it announced in August 2024 to revitalize Aetna.

Bonis told us while we might see more “challenges and pivots” from CVS, “they are playing a long game.”

“CVS will continue to optimize its vertical model using its PBM and Aetna arms along with its retail footprint print to cut costs and focus on profit pools,” he said.

Further, while it’s been tumultuous for retail pharmacies since the end of the Covid-19 state of emergency, Bonis noted retailers including CVS and Walgreens are adjusting their approaches to help address the US’s primary care shortage. The hope at the time was these health offerings would “bolster” their other offerings like PBMs and insurance.

Last November, the Health Resources and Services Administration predicted a nationwide shortage of more than 87,000 full-time primary care physicians by 2037.

“Delivering primary care that achieved sustainable profits and growth was harder than anticipated, leading most retailers to step back,” he said. “Retailers are adjusting from lessons learned and continuing to explore where and how they participate in the provision of health services.”