Michael Cabrera returns to territory he successfully traversed
Twenty years ago, a 29-year-old with just $25,000 and a big dream founded one of the country’s first diagnostic-imaging networks. Michael Cabrera grew his Miramar-based AnciCare into a leading network of 1,200 imaging centers in 40 states generating $20 million in revenue. When he sold to a public company in 2002, AnciCare had 50 employees.
Today, Cabrera believes he can do it all over again, with a few twists. This second fast-growing company, he believes, will quickly drive volume business to selected imaging centers, saving money for insurers and ultimately consumers, and adding jobs to the economy. “I’m not going to mess with success,” he said.
U.S. Radiology will provide complete radiology management services through a network of free-standing diagnostic-imaging centers. His laser focus initially will be on Florida’s workers-compensation market. U.S. Radiology won second place in the Business Plan Challenge FIU Track.
Diagnostic imaging — with a 20 percent annual growth rate — is the fastest-rising medical expense, increasing at twice the rate of prescription drugs and overall healthcare spending. According to a report by the Association of Health Insurance Plans, almost $100 billion a year is spent on diagnostic imaging in the U.S. and these costs are expected to double in four years.
“It’s the perfect time to get in and I’ve got the opportunity to do something really impactful,” said Cabrera. His research shows that while the workers-compensation market in medical imaging is a $1.2 billion industry, as much as two-thirds of those diagnostic-imaging referrals go unmanaged. And that, he notes, can lead to overpayments, inefficiencies and quality issues. If an injured employee has to wait for an MRI or to get the results, the diagnosis or start of treatment can be delayed. “And time is money to insurers, because sidelined workers receive indemnity payments while they work,” he said.
Cabrera says the major player, One Call Care, today is generating about $250 million in diagnostic imaging alone. That company has expanded into other areas, leaving room for a focused player that will provide outstanding customer service, he said.
Cabrera’s business plan calls for building a network and launching U.S. Radiology in three months. He’s starting the company with $250,000 of his own money, and will be looking for an investment partner down the road to fuel growth. He believes he can capture 2 percent of the market and generate $15 million in annual revenues in year No. 5.
“I’m not looking to provide diagnostic imaging as a whole to the whole market. I’m willing to do something I completely understand and can introduce to the marketplace and get results quickly,” he said. “That is what everyone is looking for. And I think there is plenty of market share to do that.”
Of course, the industry has changed in 20 years. Today, diagnostic imaging has become a commoditized business with low margins. “You have to make it up in volume, and you have to provide excellent customer service to differentiate,” Cabrera said.
What does Cabrera know now that he didn’t know then? Last time, he owned 100 percent of the company. Now, he sees the wisdom of taking on partners and giving up a portion of the business in order to grow faster. Pitching to investors was something he had never done, but he’s learning now.
Making the case for U.S. Radiology, Cabrera says he has already identified the high-quality imaging centers he would want to include and knows the decision-makers. He will personally oversee all sales efforts, which will include networking at industry conferences, establishing a robust company website, and advertising in targeted publications.
Although not part of his initial projections, he believes healthcare reform could bring additional opportunities for U.S. Radiology down the road, as many of the newly insured will have high-deductible plans and will want to save money on health costs.
That makes sense to Marc Cabrera (no relation), managing director of healthcare investment banking for Morgan Joseph TriArtisan and investment banker for AnciCare.
AnciCare was actually a little ahead of its time, a unique business model that today has become somewhat mainstream, said Marc Cabrera. That said, technology has evolved and changed the face of the radiology industry in a relatively short time.
“Healthcare reform is essentially going to create 30 million new insured consumers. All of these types of services that AnciCare provided to help lower costs and improve quality, those are good things, and those types of businesses will have a very strong future,” Marc Cabrera said, adding the workers-comp market isn’t nearly as consolidated as the group medical market. “So if there has ever been a time to develop a new business model, even if it is an improvement over an old business model, it’s a good time to do that.”
Michael Cabrera, who has degrees from Florida International University and Nova Southeastern, has been contemplating this move for about a year, developing the model, renewing contacts, and putting together a business plan to take to investors. But the entrepreneurial bug that he first discovered during his days as a Miami News newspaper carrier in his teens never really left him.
After the sale of AnciCare, he took time off to travel the world and spend quality time with his two children, who are now in their late teens.
Cabrera also renewed vows with his wife of 20 years in the kind of big Biltmore ceremony the eloping couple never had.
After waiting out his five-year non-compete agreement, he began looking at various healthcare investments and projects but they didn’t feel right. Launching U.S. Radiology does.
“I am completely rejuvenated to get back into business with a lot of passion and a lot of energy,” Cabrera said. “Ten years has gone by faster than I ever thought, it sure has.”