Good morning, and welcome to American Oncology Network's Investor Presentation Webcast. Today's webcast is being recorded, and a replay will be available on AON's Investor Relations website. Before we get started, I would like to direct your attention to our legal disclaimers. This presentation does not constitute an offer to sell securities or a solicitation of a proxy or an offer to buy securities. Management may make forward-looking statements during this presentation. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business and our industry, see our filings on the SEC's website under ticker symbol AONC, including our recent 8-K filed this week. This call will discuss non-GAAP financial measures such as Adjusted EBITDA.
Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in our filings furnished to the SEC and available on our website. I would now like to turn the conference over to Todd Schonherz, Chief Executive Officer for American Oncology Network. Thank you. You may begin.
Thank you, operator, and thank you all for joining us today. Hello, I'm Todd Schonherz, Chief Executive Officer for American Oncology Network. I have over 31 years of experience in healthcare, with the majority of that time spent supporting community oncology. I cut my teeth early on in information technology, then spent about 10 years with US Oncology. While at US Oncology, I spent a majority of my time as the Chief Information Officer and part of their executive leadership team. During my tenure, I helped drive significant market expansion and helped lead significant initiatives, including the decision to develop our own drug distribution service line, the acquisition of the iKnowMed electronic medical record, and the initiation of an informatics business. Once US Oncology merged with McKesson in 2011, I joined Florida Cancer Specialists and transitioned into the Chief Operating Officer role.
During that time, I was leading Florida Cancer Specialists. We grew the organization from 54 physicians and about $300 million in revenue to 235 physicians and $3 billion in revenue. In 2018, I developed a concept to build out a national oncology platform, which was the genesis of AON. I'll now turn it over to Dave to introduce himself.
Thanks, Todd. I am Dave Gould, the Chief Financial Officer of AON, and I joined AON in September of 2020. Prior to that, I was the CFO of Apollo MD, a multi-specialty physician practice specializing primarily in emergency and hospital medicine. I began my career 25+ years ago as an auditor for Ernst & Young, focusing primarily on the healthcare sector. For the next decade, I worked primarily in healthcare at companies such as Mariner Healthcare, a publicly traded $2 billion skilled nursing facility company, Regency Hospital Company, and transitioned to media in 2006, where I worked for the Cumulus Media corporate finance department until I joined Apollo MD in 2016. I'll now turn it back to Todd to begin the presentation.
Thanks, Dave. Here's a quick snapshot of AON's business and national footprint. Today, we have over 200 providers across 77 sites of service, spanning 19 states plus the District of Columbia. We are building one of the largest and fastest-growing community oncology practice networks in the United States, helping to deliver high-quality, cost-effective cancer care all across the country. Since our inception in September 2018, five years ago this month, we have done things differently to disrupt the existing community oncology landscape in a cost-effective and scalable way. The platform we've built is unique in that we operate a true national physician network that provides a number of novel advantages and allows us to scale quickly and efficiently and do so sustainably for the long term.
We've demonstrated our successful growth strategy in just our first five years by growing the business from zero to now delivering $1.2 billion in revenue and $23 million of adjusted EBITDA as of June on an LTM basis. During that time, we've also demonstrated a compounded annual growth rate of 54% from 2019 through 2022. We're able to achieve these results because we're a mission-driven company, and our North Star remains creating an optimal experience and outcomes for our patients who are going through the most challenging time in their lives. At AON, our mission is to provide the highest quality, cost-effective care within the communities where our patients live and work each and every day. Cheryl's story is a great example of one of the many stories that showcase how our holistic model delivers high-quality care to patients in our local communities.
Cheryl had a history of breast cancer in her family that she routinely screened for, but it was a CEA blood test as part of her screening menu that indicated she actually had lung cancer. From there, her medical oncologist and supporting care team at Hematology Oncology Clinic, in partnership with AON, have guided Cheryl through a variety of treatments, including oral oncolytics and targeted therapies, to help her manage to resume her daily activities. Stories like Cheryl's keep us working hard to deliver the best patient outcomes to more patient communities across the country. Since our inception, we have set out to disrupt the community oncology landscape. In less than five years, we accomplished this goal by becoming one of the nation's only true national oncology practices, addressing the needs of a very fragmented market.
AON provides a very compelling value proposition for oncologists to not only survive but thrive in light of macro and industry headwinds, with a robust reputation for clinical excellence and cost-effective outcomes. Our organization has revenues exceeding $1 billion and has been EBITDA positive since our first full year of operations, and is built to scale with multiple growth levers for a sustainable long-term business model. As we move through the deck, we'll walk through the value proposition in a bit more detail. Cancer care is complex and expensive, and makes up a significant portion of the total healthcare spend in the U.S. every day. 9.8% of adults in the U.S. have been diagnosed with cancer, and in 2020, it was estimated that $200 billion was spent on oncology care.
As a result, there is an increasing demand for oncology services, driven by many macro factors like an aging population, earlier detection, and cancer becoming more of a chronic condition versus a terminal illness. These factors are further compounded by the pressure placed on providers today due to increased complexity created by an explosion of new drugs and new indications, reimbursement headwinds, and demands for personalized medicine, creating increased pressure on physicians' time. Compounding that, is a shortage of over 2,200 oncologists expected by the year 2025. The market still remains very fragmented. Most oncology groups are still fairly small when measured by number of providers or number of sites. A large number of practices have closed and sold off to a hospital in the past.
We do not believe that hospitals are the answers, as they are often not physician-friendly and increase the overall cost of care. Additionally, as the market as a whole has experienced significant headwinds, including reimbursement reform, increased competition, and staffing shortages. Due to this pressure, consolidation is going to continue, and all these small practices are going to have to make a choice about their future. Our model ensures practices who are located in markets with significant number of oncologists remain competitive, as well as practices and markets with limited capacity remain viable for the long term. AON is the lifeline to preserve and enhance community oncology by ensuring practices have a solution to remain in the community and provide access to cost-effective, high-quality care.
And to take it a step further, community oncology, in particular, plays a critical role in the healthcare ecosystem, while also supporting two critical structural needs: the shift from volume to value, and increasing the focus on social determinants of health. Notably, on average, community oncology care is 40% cheaper than the same treatment offered in a hospital. Not only is community oncology more cost-effective, but the personal element, accessibility, and clinical trial availability in these settings significantly benefit the broader nationwide population. And while community oncology struggles to survive at the local level, scale benefits do exist for larger oncology platforms. AON and other platform players in this space have proven the benefit of size and scale, particularly the value that is delivered around improved pricing and drug contracting, broader recruitment efforts, and better access to the various constituents.
However, that's where all the comparisons start and stop. Because of the national platform we've architected, we are committed to bringing our customers additional level of services that we don't see offered among our competitors today. We provide a number of integrated adjacent services, including lab, pathology, and specialty pharmacy, as well as leveraging our centralized operations and technology platform to streamline our expansion process across markets. Here, we lay out our fully integrated care platform structure, which highlights the different areas where we support community oncology practices. Our world-class centralized services have been designed to scale with network growth, ensuring that all the administrative functions are performed at the most cost-effective price points and with the highest service levels to our customers.
AON also has a strong commitment to operational excellence, which drives efficiency and removes non-value-add activities from the clinics, which ensures the local practice staff spend more time focused on the patients in the clinic versus wrestling with non-patient-facing activities. By delivering of these services and support, it allows for the AON providers plenty of autonomy and the time to focus on what they have been trained to do, provide high-quality care to their patients. AON's investment in key ancillary services help promote and drive clinical coordination throughout the practice. These ancillaries, including a triple-accredited, medically integrated pharmacy, a state-of-the-art clinical and pathology lab, and clinical research, drive significant benefit to our patients by ensuring timely delivery of test results, feedback from our board-certified pathologists, and the rapid delivery of oral oncolytics to ensure patients can begin therapy in a timely manner and start their journey to recovery.
Our in-house ancillary services consistently outperform even well-run independent practices by using our size and scale to maximize capture rates and turnaround times. An example of this is our specialty pharmacy that can fill almost 80% of the scripts written by AON providers, compared to 40%-50% at physician dispensing locations. AON also has access to greater than 92% of the oral oncolytics available on the market today. Expertise and ability to deploy imaging and radiation assets where markets can support. Finally, by being able to maintain these services within the practice, AON physicians experience significant practice growth and accretive financial benefits from these services that are often captured by other organizations.... In order to deliver on clinical care coordination and operational efficiency, AON has and continues to make sizable investments in implementing and integrating best-of-breed solutions in support of our practice.
This platform connects all aspects of our clinic, ancillary and administrative functions, and has been designed to fully scale to support our future growth targets. The platform not only connects team members within the network, but also key stakeholders such as patients and referral sources. AON has a world-class team of IT professionals, including our own EMR implementation team, that reduces dependency on vendors for clinical content changes and to rapidly onboard new providers to the network. Finally, all the key systems feed our enterprise data warehouse, which allows our clinical and administrative operators to review insightful information to help drive patient outcomes and operational efficiency. The single instance of our platform is a differentiator compared to competitors that allow us to remain agile and drive efficiency across the network. AON truly addresses the Triple Aim of healthcare by addressing the needs of patients, providers, and payers.
From a patient standpoint, they receive access to world-class care and the latest therapies in their backyard without having to travel to tertiary care centers, which is incredibly important. Our ability to provide additional ancillary and integrative services like social work and nutrition in the community setting, so that patients don't have to leave the market, is also an added benefit. Our team is highly focused on high patient engagement and satisfaction, demonstrated back in 2022, where we achieved 94% patient satisfaction. As an organization, we take tremendous pride in these results. On the provider side, first and foremost, we aim to allow providers to maintain a level of independence and autonomy to run their practices.
By AON removing the administrative burden of running a practice, our providers can spend more time focused on delivering high-quality patient care, with the assurance that it's done with a level of sophistication and quality that these smaller groups wouldn't be able to accomplish otherwise. Because we're able to do things more efficiently and add additional revenue streams to our practices, provider income is up almost 40% compared to their historical baselines. This provides significant physician satisfaction, and we're really proud of our over 90% physician retention, thanks to the value we're able to bring these practices. Finally, for the payers, AON has a proven track record of bending the overall cost curve for cancer care delivery.
Payers benefit significantly from working with AON, as our mission to preserve community oncology offers payers and their members the same treatment options offered in the hospital setting at significantly lower costs. Because of our single infrastructure, we can address some key areas for the payers, like variation in treatments and drug utilization. We also have a robust program to keep patients healthy between visits, and with the help of our social workers, we can make the appropriate and timely referrals when it comes to end-of-life planning or survivorship programs. Overall, we're very proud of our ability to enable better care, better provider experiences, and lower costs. As I've shared before, the distinctness of our model allows AON to bring long-term, sustainable value to practices regardless of size of the group, number of locations, or market location. We provide access to quality providers in a convenient community setting.
Adherence to evidence-based standards, personalized treatment options, and our integrated care model, including lab, pathology, and specialty pharmacy, improves care coordination. We offer whole person care, addressing social determinants of health, and we have a proactive care team that supports these patients throughout the care journey. Access to clinical trials and research programs also enhance treatment options. Every aspect of our model, from our network structure to our novel management fee model, is designed to create alignment with our physician stakeholders and create long-term value for the practices who we serve every day. When comparing to our peers, whether fully independent, a network model, or an employed model, no other setting or model is able to provide physicians with the benefit of our platform. Operational autonomy, purchasing scale, integrated pharmacy and lab, centralized back office, robust technology platform, and aligned economic incentives.
The AON model is focused on ensuring alignment with our providers by having practice growth and profitability, driving physician satisfaction and retention. Unlike other companies that provide upfront consideration for income or pay on the back end, with the goal of physicians getting back to baseline levels, AON's physicians earn more, which is appealed to practices that want to focus on future growth as opposed to cashing out. This has also enabled AON to acquire practices with little to no or to no upfront consideration. On average, the AON model grows baseline pre-distribution pool from when they join by about 38%, as you can see on this slide.
This growth is largely driven by increased practice efficiency, volume increase driven by our physician liaisons who go out to the local community to drive referrals, and enhanced marketing, along with growth in ancillary services related to our lab and specialty pharmacy. Since our inception, we have been committed to taking a leadership role in transforming cancer care from volume to value. Proven by our results in a multi-year demonstration program covering thousands of Medicare patients, AON was able to demonstrate a 4.2% reduction in total cost of care compared to all oncology practices, and a 2% reduction compared to our peers in the same program. We also achieved a 12% reduction in emergency room visits and ultimately, inpatient admissions.
We had a reduction in unplanned readmissions through our transitional care management program, and we have a responsible utilization of ancillary services, even though many of these services are offered within our practices. These stats are a testament to the benefit and efficiencies of our model. Let me now turn it over to Dave.
Thank you, Todd. Now I'll cover some of the impressive growth AON has experienced over the last 5 years. Now, while the market as a whole has experienced significant headwinds driven by reimbursement reforms, increased competition, and staffing shortages, AON practices have not only overcome these issues but have grown during the same time period. Our unique model supports growth from multiple sources, including traditional acquisitions, physician recruiting, and physician extraction from hospitals and multi-specialty groups. Over the last 18 months, we have focused significantly on optimizing our services and operations to ensure we are well-positioned for growth. As you can see on this page, over our company's lifetime, we have been able to scale our business from 3 practices and 21 providers to 31 practices and over 200 providers, resulting in a 54% revenue CAGR through 2022.
The solid foundation we've built has positioned us well to continue our growth trajectory and bring our unique model to more communities across the U.S. Once a practice joins AON, growth continues organically, well beyond the initial year, driven by several factors that include: use of ancillary services, such as our specialty pharmacy and our lab and pathology services, practice expansion via adding locations or providers to existing practices. We have dedicated marketing and physician liaison teams who drive referrals by ensuring our physicians get out into the community to meet with referring medical practices, to ensure they are aware of the high quality of care AON delivers. Organic growth is further evidenced by the continued growth of our earliest cohorts, as demonstrated by the fact that the 2019 cohort grew 10.8% from 2021 to 2022.
As depicted by the charts, AON has seen impressive growth since its inception in 2018. Starting with our first full year of operations in 2019, AON has grown revenues from $320 million to $1.1 billion in 2022, or a CAGR of 54%. In 2021, we experienced some margin contraction related to investments we made to create a standalone platform. However, throughout all of our growth, AON has generated positive EBITDA, and since 2021, we have seen continued margin improvement. Now I'm going to turn it back over to Todd, who will talk about additional avenues we have for continued growth. Todd, back to you.
Thanks, Dave. While AON has a run rate of almost $1.2 billion in revenue for 2022 and scaled rapidly over the past 5 years, we still maintain multiple levers for growth. We will continue to grow organically through the introduction of ancillary services and a well-designed playbook to drive same-store growth. Expanding our network by the recent investment in a chief development officer to help attract new practices to AON, that has added structure to our business development process and an extremely healthy pipeline. This pipeline includes the introduction of a pharmacy MSA model that we see as an on-ramp to our fully integrated model. As we transition AON to a public entity, the ability to offer equity will only help put jet fuel into our traditional development efforts.
This, along with a healthier balance sheet, will allow AON the necessary capital to expand our service offerings through programs such as radiation and imaging and informatics. It will also allow us to continue to make continued investments that will improve our margin in key areas of business, including our drug cost ratios and reduced administrative overhead as a percentage of revenue for the organization. One of the benefits of being in the space for as long as I have, I was afforded the opportunity to build an extremely experienced leadership team. As you can see, our team averages north of 20 years of experience, has deep oncology experience, as well as experience with leading healthcare organizations throughout the United States. This team has demonstrated the ability to create scale, drive performance, and create value to our practices for the long term.
I'm very grateful to them and to our physician partners who allow us to deliver high-quality care to oncology patients nationwide. While we are very proud of what we've accomplished over the past five years, we remain even more excited about our future. We believe AON will continue to be well-positioned to execute on our strategy due to a number of factors, including significant market opportunity, a differentiated model aligned with the physicians, a technology-enabled platform delivering high-quality cancer care, a repeatable model that we believe will scale well, highly experienced management team and expert physician leadership, and multiple growth levers, all leading to high growth potential and proven profitability. Thank you for your time and interest in American Oncology Network.
Thank you. Ladies and gentlemen, that concludes our conference today. Thank you for your-