Company, June Virtual Investor Conference. The next company to present is RadNet. With us is the CFO, Mark Stolper. It's, as normal, 30 minutes' worth of a presentation. If you have some questions, we should have time for those at the end, so you can type them into the Q&A box at the bottom of your screen. And with that, it's all yours, Mark.
Thank you, Jim. Thanks, everyone, for tuning in either this morning here on the West Coast or in the afternoon on the East Coast. I appreciate the invite to the conference. It's always a great and productive conference. In today's presentation, I am going to go through an introduction of the company, talk a little bit about the industry, which gives us a backdrop to continue to grow the company effectively into the future. I'll do a bit of a deep dive into our business, and then I'll end the presentation with some financial information and some thoughts about our future strategy, and then open it up to any questions that some of you may have. So with that, let's move forward. For some of you who are less familiar with RadNet and our story, we are the largest owner-operator of fixed-site diagnostic imaging centers in the United States.
We have been around for a while. We were founded in the 1980s by our CEO, Dr. Howard Berger, as a one-center operation here in Los Angeles, outside of Cedars-Sinai and Beverly Hills. Over the last several decades, we have grown the company into what today is the scale operator and only publicly traded company in our space. We operate in a very large and fragmented industry. I'll talk more about that in a subsequent slide. The dynamics of the industry are such that it continues to grow every year, and there is a very important market share shift in favor of ambulatory outpatient centers like the ones that we operate, which I'll also talk about on the subsequent slide.
More recently, we have grown the business very effectively through a structure where we allow hospital and health systems to be our partners in joint ventures that today comprises 137 of our 375 locations, or about 36.5% of our locations. We'll talk a little bit more later on in the presentation about why we believe that will continue to be a growth engine for the company in the near future. And additionally, we have other ancillary revenue opportunities and revenue streams that we're enjoying, most particularly around radiology software and artificial intelligence. We have been a fast grower. We've quadrupled the size of the business through 2006. We've been growing the business at around a 9% compound annual growth rate for the last 15 years.
We think that there is an opportunity to accelerate that growth, and we'll talk about the reasons why as well later on in the presentation. We expect to do between $1.7 billion and $1.8 billion of revenue this year, close to $275 million of EBITDA, which is close to the midpoint of our guidance ranges. Today, as we speak, we have over 10,000 employees in eight states. There's been a couple of reasons that we can call out around core operating tenets that have made us successful, or we believe that has made us successful, being geographic concentration. Predominantly, all of our sites are in the core markets of California, the Mid-Atlantic region, which comprises Maryland and Delaware, the Northeast, New York and New Jersey, and more recently, Texas and Arizona.
There are important benefits for having geographic scale and densely clustered facilities, and we will talk about those reasons later on in the presentation. The other core operating tenet that has been important to the growth and success of our business has been what we call our multimodality strategy, meaning that the vast majority of all of our facilities have the full breadth of imaging equipment from the routine studies to the more advanced studies. And their key advantage is competitively for having that strategy. We've also been a proven acquirer and integrator over the years of some of the smaller operators in our industry. M&A will continue to be a part of our growth strategy, and we consistently have a pipeline of acquisitions that we work through.
Also, I'll call out a unique aspect of our business, which is the fact that we are an exclusive imaging provider to almost 2 million lives under exclusive capitation agreements with some of the largest managed care players in the country. Most of this business is in California. We do have some capitation arrangements, or one in particular, in the Northeast. This is about 8% of our business. It's unique to the industry, and we look to continue to grow this business as healthcare continues to move towards value-based care.
And then lastly, before I go into a deeper dive in terms of the industry, we have an important aspect of our business, which we call the digital health operating segment, where we have both an industry-leading radiology software business, which historically has been called eRAD, which is the technology platform that we operate all of our centers on, and we have over 200 external customers outside of RadNet who license this solution. More recently, we have been leading the industry towards clinical AI solutions, and in particular, the areas of breast cancer, prostate cancer, and lung cancer. And we are growing that segment very quickly. We expect our AI business to almost double this year, perhaps around $25 million of revenue, which approaches half of our digital health revenue projection for 2024. What do we do?
This slide just shows you the types of exams that we perform at our core imaging centers. We are a full multimodality or one-stop shop to our referring physician community. Approximately 75% of all of our patient volume is the routine studies of X-ray, ultrasound, mammography, fluoroscopy, nuclear medicine. And then we have the advanced imaging modalities, which represents the other 25% of our business of MRI, CTs, and PET CTs. Those are the higher ticket items. They certainly drive a fair bit of our revenue and drive the margin in our business. And we've always benefited and will continue to benefit from being a one-stop shop to our referring physician community as we can give our referral sources one prescription pad. And no matter what imaging needs that they have on behalf of their patients, they can send that to the RadNet center down the street.
So I'll take a few minutes, and I'll go through the dynamics of the industry. If you believe the research out there, the diagnostic imaging industry in the United States is believed to be north of $100 billion of annual imaging services revenue. It is believed that today, the hospitals still perform somewhere between 40%-50% of all the imaging in that $100+ billion industry. The remaining portion is performed in outpatient centers like the ones that we operate and within individual physician offices. As the industry continues to grow, there is a market share shift that's occurring from hospital-based imaging towards freestanding imaging. That is being driven by payors who recognize that there's a substantial difference in pricing that the hospitals charge relative to freestanding imaging centers.
In our markets, typically, hospitals and health systems charge anywhere between 2x-5x the cost of the imaging that takes place in our centers. As healthcare costs continue to rise, we're seeing that the large and regional commercial payors are trying to drive this business into the freestanding centers and away from the hospitals where the cost is much less to them and to their patients and to their membership. We've been enjoying that. Historically, we've grown the business organically, kind of in the 2%-4% range. Now we're experiencing mid-single-digit growth on an organic basis in terms of our volumes. The industry is highly fragmented. RadNet is a little bit unusual in terms of our size and scale for the industry. We are the largest player in the industry.
If you took the other four largest players with us, we would represent only about 10% of the entire number of imaging centers in the United States. This is one of the last frontiers of healthcare that has not been consolidated in any meaningful way. This represents a large and growing opportunity for us. One of the nice things about the diagnostic imaging business is that it grows every year. Part of its growth is being spurred by the demographic changes that are occurring in the United States, which is driving just the overall utilization of healthcare services. What I mean by this is I'm talking about the growing population and the aging population. As we age, we utilize diagnostic imaging more frequently.
In fact, the studies show that Medicare lives, meaning patients ages 65 and above, utilize diagnostic imaging three times more frequently than non-Medicare lives. But really, what's driving the indications for ordering more and more of these diagnostic tests are the result of technology advances that we see in our industry. Every year, equipment gets better. There have been a number of evolutions in contrast materials, radioactive pharmaceuticals, post-processing software, and AI that just continues to make diagnostic imaging more and more effective for the healthcare delivery system. And it's also been proven that if you can detect disease earlier in the disease process and more accurately, then you're able to treat patients with better outcomes and at a much lower cost. And so this is good medicine as the industry continues to focus on early detection as well as non-invasive and preventative medicine.
As I mentioned in my opening remarks, the industry is consolidating and will continue to consolidate. This is not different than other parts of the healthcare delivery system. For the last four years, we've done about $250 million of acquisitions of smaller operators, operators looking to join a more stable network, have a more predictable future, and to allow us to take the control of operations where we're better, more efficient, and have the capital to invest in more advanced equipment and more advanced technology, which improves the delivery system. I'll spend a few minutes doing a deep dive into our business. As I mentioned, one of the core operating tenets of the company is geographic concentration. All 375 locations fall within eight states, predominantly on the East Coast and the West Coast of the United States.
We operate in states that are heavily populated and have tremendous density of population. Over 30% of the United States population resides in the eight states in which we currently operate. There are two main advantages for having geographic concentration. The first is that we can bring tremendous efficiencies into delivering our services. What I mean by that is that we're able to centralize a number of functions that we perform on behalf of our centers, such as our call centers, our scheduling departments, pre-authorization departments, insurance verification departments, as well as certain revenue cycle functions. That allows us to be a low-cost and very efficient provider and drives margin in our regional markets. The second and perhaps more important reason for being geographically concentrated is that it gives us a seat at the table when contracting with commercial payors.
We have proven ourselves to be indispensable to the provider networks of many of the large national and regional payors. Because of that, they recognize the breadth of the volume and capabilities of our centers. They understand that we're their partner in trying to move the much more expensive business out of the hospitals into the lower-cost freestanding centers. As such, they're willing to contract with us on a fair and equitable basis. They also understand that if we were to pull out of their networks and not see their patients, that a lot of the volume that we currently perform on their behalf would end up going back into the hospitals at much higher pricing. So on slide 9, I'll just talk a little bit about where our revenue comes from.
As I mentioned in my introductory remarks, the MRI, CT, and PET CT part of our business represents only about 25%-26% of our patient volume. That's what drives the revenue. That 25.5% or so of procedural volumes drive about 60% of our revenue. Clearly, the growth in advanced imaging benefits our business. We are seeing a movement in the industry and within our business towards advanced imaging modalities. In the first quarter of this year, we did call out a 120 basis point shift relative to last year's first quarter from routine imaging in favor of advanced imaging. That is one of the reasons why we are expanding margins and profitability. We think that this will continue as a result of the continuing technology evolutions and improvements that we're seeing in advanced imaging equipment, contrast materials, and radioactive pharmaceuticals.
On slide 10, what I'll call out here or highlight is that we have a very diverse payer mix. The largest part of our payer mix is commercial insurance, which represents over 58% of our book of business. These are contracts that we negotiate with the large insurance companies and regional health plans. We have a seat at the table and have leveraged our position in our markets and the importance of the role of outpatient imaging with these payors and have been successful in recent years in being able to get more reimbursement for the services that we perform. 21.7% of our business is Medicare business. Though we participate in industry groups and have a lobbying effort, to a certain extent, CMS sets these rates each year. And it not necessarily has to do with industry dynamics, but is subject to budgetary constraints and political processes.
So we have seen stability in the Medicare rates over the last five or so years. We think that that will continue going into the future. Capitation, which I'll go into in more detail on the next slide, represents about 8% of our book of business. And then we've got some smaller books of business such as workers' comp, personal injury, and some state-run Medicaid programs. I'll spend a couple of minutes on capitation. As I mentioned, this is a unique aspect of our business. We capitate with over 30 medical groups, predominantly in California, where they are taking the risk for providing all the healthcare for large HMO patient populations. And then they come to us, or we approach them, to take on the diagnostic imaging risk off of their plate.
For that, we get a piece of the per member per month fee that they're aggregating with all the various managed care providers. We've been doing this business successfully for close to 30 years. It's been a great part of how we built the business, particularly here in California, where the average contract is over 15 years old. These are exclusive arrangements. We have a very high renewal rate in terms of these contracts unless we choose to cancel contracts. And we have, to the extent that we are not getting paid the type of reimbursement that we think that we deserve, we have price escalation clauses in the vast majority of these arrangements. So we do get paid more each year for providing these services.
We have unique aspects related to this business that save costs in terms of the contracting structure, in terms of not having to have any billing and collection costs because we don't bill per procedure. We have very little bad debt associated with this book of business, and we have no cost of carrying receivables because we get paid based upon an enrollment number each month for providing these services. And perhaps most importantly, it provides us what we call pull-through business, meaning that all of these physicians that are obligated to send us these HMO patients under these capitated arrangements tend to send us all of their fee-for-service business as well. And that's a way of really driving fee-for-service business, particularly here in California. On slide 12, I mentioned in the opening remarks, joint ventures are becoming a bigger part of what we do.
Today, we have 26 joint ventures encompassing 137 of our locations. We partner with some of the largest health systems in the United States and certainly in our markets, including the RWJBarnabas Health, Dignity Health, University of Maryland, Cedars-Sinai, MemorialCare, and more recently, the Providence Health System. It provides some unique benefits to us in terms of the hospitals have been instrumental in sending us incremental volumes that we wouldn't otherwise have seen. So we often see an uplift in terms of our financial performance once we partner with hospitals. They've also been helpful in helping us establish long-term fair and equitable pricing with the commercial payors.
And then we provide them a significant benefit with the joint venture strategy because we allow them to buy into an existing book of business or existing assets that we have in their markets and give them a long-term viable strategy around outpatient diagnostic imaging in an environment where they're losing business and will continue to lose outpatient imaging to freestanding centers. So it's a win-win structure for both sides. As I mentioned, we've gotten bigger and bigger into IT and informatics and AI. We're launching a new informatics end-to-end IT platform later on this year. This platform is a new and improved version of what we call our eRAD platform today, which is a platform that we use and sell to about 200 customers outside of RadNet.
The new platform will be a cloud-based platform and will incorporate a number of automation tools powered by generative AI, which we're incredibly excited about in terms of improving our workflow and lowering our reliance on human capital, in particularly labor around call scheduling, patient pre-authorization, insurance verification, and certain revenue cycle functions. We hope to have a commercialized product by the end of the year and start selling and licensing this product to the rest of the industry sometime in early 2025. We are leading the industry towards AI solutions. We currently have solutions for lung cancer, breast cancer, and prostate cancer, areas that we think can play a really important role in the healthcare delivery system around cancer screening. We have been rolling out a program that we call EBCD, Enhanced Breast Cancer Detection Service, throughout our network.
We should be finished rolling out that program around the end of this month. We are offering a suite of AI services to our female patients who come in annually for their screening mammography exam. We've seen our AI revenue grow in 2022 from $3.5 million to 2023. Last year, we did $12.5 million. This year, we're anticipating our AI revenue to be somewhere close to $25 million. We're very excited about this. We think it's going to have a transforming impact on being able to drive new patient volumes into our core business, particularly around some of these cancer screening opportunities, as well as lowering our costs and improving our accuracy of delivering the professional component or the radiologist component of what we do. I'll conclude the presentation with some core information about the financial performance of the company.
Most recently, we've been growing the organic aspect of our company more quickly. We've been averaging kind of in the mid-single digits on an organic same store sales, excuse me, same store volume basis. We've been growing our EBITDA north of 10% as we illustrated in the first quarter. Our EBITDA has been growing faster than that as we've been expanding margins. We think that this performance can continue. We've seen strong volumes continue into the second quarter. We did increase our guidance ranges after the strong performance in the first quarter. We're excited about the remainder of the year. In the first quarter, we did announce that we entered a new market, and we're extremely excited about that through the acquisition of 2 center operators, which comprised 13 locations in the Houston marketplace.
I'm talking about Houston Medical Imaging, which we completed on April 1st, and the acquisition of American Health Imaging, which we announced and hope to complete early in July. Houston is the fourth largest metropolitan area in the United States. It's the second fastest growing metropolitan area in the United States. We're excited about making Houston another core market of RadNet. We also have expanded and accelerated our de novo facility operations. We are, as we speak today, planning to open 12 new centers that are in various stages of construction by the end of this year. We've got eight projects behind that that we'll look to develop and construct and open sometime in 2025. I'm on page 18, slide 18. We've grown the business very effectively over the last 15 years, both on the revenue side as well as the EBITDA side.
Our procedure volumes continue to grow. We're now north of 10 million procedures per year. We think that there's no reason why this performance won't continue in the future and that we actually think that we can accelerate this growth as we move forward. Final slide here, which is some valuation metrics for everyone to see. What I will highlight on this page is that we've got a great and very healthy capital structure at this point. We're sitting on over $700 million of cash. We pushed out and refinanced recently our term loan and our debt facilities to 2031. We lowered our cost of capital. We've got a lot of firepower to continue to grow this business and accelerate the growth. We do have a net operating loss carry forward, which will alleviate the burden of any federal tax over the next several years.
And with that, let me open up the floor back to Jim with any questions that you may have. Thank you. Yeah.
No. Thanks, Mark. We're almost out of time, but I think we should ask one or two just on the AI business because that seems to be where everybody's very focused right now. So the revenue you're doing now, as far as I understand, it's all private pay revenue, people paying out of their pocket. What impact do you think would happen when reimbursement is in place from CMS? And right now, the revenue is primarily breast cancer screening. How long before you start using AI for other things like prostate cancer?
Yeah. No. Great questions. The first thing is I will say that we are licensing this solution to third parties in Europe, predominantly. We are rolling out a program with the NHS and providers who partner with the NHS called the Targeted Lung Health Check Program, where we are partnering to where the UK has mandated that current smokers and past smokers come in annually for an annual lung cancer screening test. They've mandated the use of AI in conjunction with the radiologist read. So we have the vast majority of the market share in the rollout of this program. We are licensing our prostate solution to a number of providers in Europe. Having said all this, and I think your question was astute, is that they're currently in the US, is not utilizing AI or using AI doesn't come with any additional reimbursement.
Currently today, radiologists and providers are not able to bill and collect for the use of these technologies, which has created resistance in radiologists wanting to license these solutions. Even though these solutions do make them more productive and do make them more accurate, it does add an element of cost to their workflow. Until such time as they can actually bill and collect for the use of these technologies, we think that it's not going to be AI is not going to be adopted on a widespread basis, which is why we came up with the program to go directly to the patients.
If the patients value the use of these technologies, which they should, by the way, because we've proven that we can detect breast cancer up to two years sooner than the human eye can, that the patient has been willing to pay out of pocket for these solutions. We're seeing about a 40% adoption rate in our screening mammography program on the East Coast. And the West Coast, where we're finishing the rollout, we're already at close to a 30% adoption rate. So we're having success going to the patients directly who seem to be willing to pay for these solutions. But at some point, we think that the commercial payers and Medicare will have to reimburse for these terms in order to incentivize providers to adopt these solutions on a widespread basis. We think that that's just a matter of time.
At such time, we think then that's when we're going to have a lot of success licensing these solutions to other providers.
Okay. All right. Well, we are out of time, but I appreciate your time today, the fact you're doing the meetings with us. We hope to talk to you at a conference again soon to get an update.
Thanks, Jim. Appreciate it. Appreciate you again. Take care.