About Akumin

Akumin Inc. and its subsidiaries (Akumin) provide services to the U.S. hospitals, health systems, and physician groups, with solutions addressing outsourced radiology and oncology service line needs. With the acquisition of Alliance HealthCare Services, Inc. (Alliance), Akumin provides fixed-site outpatient diagnostic imaging services through a network of approximately 180 owned and/or operated imaging locations; and outpatient radiology and oncology services and solutions to approximately 1,100 hospitals and health systems across 48 states. Akumin’s imaging procedures include magnetic resonance imaging (MRI), computerized tomography (CT), positron emission tomography (PET and PET/CT), ultrasound, diagnostic radiology (X-ray), mammography and other related procedures. Akumin’s cancer care services include a full suite of radiation therapy and related offerings. The company’s revenue is derived from a diverse mix of third-party payors, including private, managed care, capitated and government payors, as well as directly from hospitals and healthcare providers. The company derives a substantial portion of its revenue from direct billings to governmental healthcare programs, such as Medicare and Medicaid, and private health insurance companies and/or health plans. The company provides fixed-site outpatient diagnostic imaging services through a network of approximately 180 owned and/or operated imaging locations; and outpatient radiology and oncology services and solutions to approximately 1,100 hospitals and health systems across 48 states. The company’s imaging procedures include magnetic resonance imaging (MRI), computerized tomography (CT), positron emission tomography (PET and PET/CT), ultrasound, diagnostic radiology (X-ray), mammography, and other related procedures. Akumin’s cancer care services include a full suite of radiation therapy and related offerings. The company is significantly diversified across business lines, geographies, modality offerings and reimbursement sources. The diversity of the company’s business provides a number of advantages, including having no material revenue concentration with any health system or hospital customer and no material concentration with any commercial payor. Strategy The company’s organic growth strategy is based on a sales and marketing platform which utilizes relationships with local referring physicians and consumer engagement to drive new business. To ensure the continued strength of relationships with referring physicians, the comopany employs a field-based sales team whose primary responsibility is establishing new relationships and maintaining existing relationships with referring physicians. The company plans to take advantage of cross-sell opportunities of additional services to existing customers. The company’s radiology and oncology sales and business development teams regularly coordinate and collaborate their hospital efforts. The company plans to continue and further strengthen this sales strategy with a focus on selling an entire suite of outpatient solutions rather than single specialty services. The company plans to leverage its expertise in forming new, and growing existing, hospital partnerships. The company has significant experience in acquiring and integrating business into its platform, improving the operational performance of those businesses, and realizing synergies. Segments The company operates through two segments: Radiology and Oncology. Radiology This segment represents an essential capability of a hospital or health system, driving and influencing many downstream care processes across multiple medical service lines. Radiology services are utilized across virtually all disease categories in early, rapid and accurate detection, diagnosis, treatment planning and monitoring, and directly impact high focus areas such as patient safety, patient experience, length of hospital stay and downstream healthcare resource utilization. Radiology services also play a critical role in providing quality and efficient healthcare, as nearly every individual in the United States will require some form of diagnostic imaging and resulting radiology interpretation for a significant clinical indication during lifetime. Oncology This segment specializes in the deployment and utilization of two primary targeted radiation therapy modalities: Linear accelerator (Linac) and guided robotic stereotactic radiosurgery (SRS). Both are utilized to treat the most common and some of the deadliest cancers in the U.S., including breast, lung, prostate, colon, melanoma and brain cancer. Within the broader scope Linac and SRS therapy options, the company provides access to several additional radiation treatment options, including: Three-Dimensional Conformal Radiation Therapy (3D-CRT): 3D-CRT uses three-dimensional imaging data and three-dimensional treatment planning to more accurately and effectively plan and deliver Linac radiation treatments. It is the most common form of technology used in practices and may be supplanted by intensity modulated radiation therapy (IMRT) or in conjunction with image guided radiation therapy (IGRT) when the specific case requires a higher level of precision or conformality. IMRT: IMRT entails the use of multiple beams of radiation delivered by a Linac whose intensity is adjusted individually during the actual daily treatment delivery to allow the radiation that is delivered to conform as closely as possible to the three-dimensional volume of the tumor and simultaneously reduce the dose to neighboring normal healthy tissues. It requires extremely sophisticated and time-consuming treatment planning to determine what beam shapes and orientations should be used and what their intensities should be to provide the optimal patient treatment based on the patient’s anatomy of normal tissues and the targeted tumor volume. Extensive treatment quality assurance is required to ensure that all the beams are modulated and delivered correctly. IGRT: IGRT uses a number of different types of imaging technologies to localize precisely the patient and the tumor target volume at the time of each treatment delivery to ensure that the radiation is delivered to the correct location. IGRT is not a radiation treatment in and of itself; it is used in support of advanced forms of treatment delivery such as 3D-CRT, IMRT, stereotactic body radiotherapy (SBRT) and SRS. SRS and SBRT: SRS was originally developed for intracranial applications. The technology is being used in a range of extracranial applications such as spine, lung, prostate and other disease sites in the form of SBRT. SRS and SBRT deliver a very high dose of radiation in 1 to 5 treatments as opposed to the 10 to 40 treatments used for 3D-CRT, IMRT and IGRT. Due to the extremely high doses used for SRS and SBRT, the need for precision in the planning and delivery of the treatment is critical. SRS/SBRT is delivered with a range of advanced technologies, such as the CyberKnife, Gamma Knife, BrainLab, Novalis-Tx, TrueBeam STx, Trilogy, VERO, TomoTherapy, Elekta Infinity and Axesse. Low Dose Rate Brachytherapy (LDR): LDR allows the radiation oncologist to treat cancer by delivering the dose of radiation from the “inside out.” Radioactive isotopes encased in a metal jacket the size of a grain of rice (seeds) are implanted directly in the tumor through needles, with the seeds permanently left in place, or left in place temporarily within catheters (thin hollow tubes) and removed with the catheters when treatment is completed. The radioactive isotopes decay over time (days to years) to an inert form and in the process gradually release ionizing radiation called gamma rays, which are generally of low energy and thus deposit their therapy over short distances, thereby treating the cancer over time (hours to days). High Dose Rate Brachytherapy (HDR): Like LDR, HDR allows the radiation oncologist to treat cancer by delivering the dose of radiation from the inside out. HDR utilizes temporary seeds, made of radioactive isotopes that deliver a much higher dose of radiation over a much shorter period of time. These seeds are inserted and removed several times, over several minutes, one to two times per day, for 1 to 10 treatments delivered over 1 to 45 days, through catheters that are left in place for the entire course of care and then removed when the treatment course is completed. The company’s oncology segment derives revenue from both HOPPS and MPFS. Approximately two-thirds of revenue is billed to the health system or hospital partner under contractual arrangements and the remaining one-third of revenue is billed directly to the payor. For sites that are contracted with hospitals or health systems, the majority of centers fall under HOPPS. Seasonality The company experiences seasonality in the revenues and margins generated for its services. First and fourth quarter (year ended December 31, 2022) revenues are typically lower than those from the second and third quarters. First quarter revenue is affected primarily by fewer calendar days and inclement weather, typically resulting in fewer patients being scanned or treated during the period. Fourth quarter revenues are affected by holiday and client and patient vacation schedules, resulting in fewer scans or treatments during the period. The variability in margins is higher than the variability in revenues due to the fixed nature of the company’s costs. The company also experiences fluctuations in its revenues and margins due to acquisition activity and general economic conditions, including recession or economic slowdown. Regulation The company complies with federal and state anti-kickback laws and self-referral laws. The company is and has been subject to civil investigative demands and investigations from time to time regarding its compliance with physician supervision requirements for MRI procedures and other diagnostic imaging tests, as well as its sales and marketing practices and financial arrangements with physicians. The company is in compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requirements, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and comparable state laws. The U.S. Food and Drug Administration (FDA) has issued the requisite pre-market approval for all of the MRI and CT systems the company uses. The company’s mammography systems are regulated by the FDA pursuant to the Mammography Quality Standards Act of 1992, as amended by the Mammography Quality Standards Reauthorization Acts of 1998 and 2004 (collectively, the ‘MQSA’). Although the Mammography Accreditation Program of the American College of Radiology is an approved accreditation body and accredits all of the company’s facilities that provide mammography services. Competition The company’s competitors for diagnostic imaging include, among others, Radnet, Inc.; SimonMed Imaging LLC; and InSight Health Services Corp. History Akumin Inc. was founded in 2015. The company was incorporated in 2022.