In 2009, a year before Marlow Hernandez graduated from medical school, he noticed that many residents of his hometown of Pembroke Pines, Florida, were facing the depths of the recession without medical coverage.

"So many people were losing their jobs, and incomes were falling, and there was this huge housing crisis. There was very little disposable income. People had significant health needs and could not afford care," Hernandez says. "And so I felt that I could build something by extracting costs out of the system to make it more affordable."

Although he was still in medical school at the time, he decided to open a primary care facility, which he combined with his mother's dental practice, to offer patients medical and dental care for a low flat rate. Nine years later, Hernandez's company, Cano Health, which offers "primary care plus" services including medical, dental, vision, and others, has 36 clinics across Florida and roughly 1,000 employees. In total, the company booked $272 million in revenue in 2018 and expects to hit more than $350 million this year. Now Hernandez has set his sights on an even grander goal: He wants Cano to become the go-to primary care clinic for patients all over the country. 

Getting off the ground

Hernandez emigrated to the U.S. from Cuba when he was 8 years old, in 1993. It was very difficult to leave the island, and like many immigrants, he spoke no English. His parents stressed the importance of education, so he could make something of himself in his adopted country. "It was never a choice to work hard to become somebody, to build something," he says. "It was an expectation and the least I could do."

Hernandez's parents encouraged him to pursue a career in medicine, a profession in which several generations of family members had worked. He got his undergraduate degree in neuroscience from the University of Miami, and then went to Nova Southeastern for medical school, where he also earned an MBA and a master's degree in public health.

Drawing on his varied educational background, Hernandez opened the Pembroke Pines clinic with a $400,000 loan from GE Healthcare, a subsidiary of General Electric that focuses on health information technology. He found a space, signed a 10-year lease, and hired construction workers to start the renovation. Then GE pulled the loan. According to Hernandez, he tried repeatedly to get in contact with GE but got no responseThis left him little choice but to take out a high-interest loan, adding to the mountain of debt he had already accumulated as a student. (Inc. reached out to GE Healthcare, but the company did not provide a comment in time for the publication of this article.)

He also took $2,000 he had gotten from family and friends for his wedding and put it into the business. Even the gift cards the couple had received went toward paying contractors and other workers. "I maxed out all of our credit cards," Hernandez says. "My credit score went to like 540. My wife, it took her probably five years to forgive me."

Cano Health opened in 2010, with some early patients coming courtesy of Hernandez's mother, Laurdes Cano, who had a small dental practice. Together, they decided to integrate the two to offer medical and dental services in the same office. In 2011, they instituted a first-of-its-kind program that would allow patients to receive medical and dental care for $30 a month, even without insurance. The program didn't make the company much money but it brought in new patients, and after roughly three years, the clinic was turning a profit. (The company has since changed its pricing model.)

In 2014, Hernandez decided the time was right to open a second location. He brought on a partner, Dr. Richard Aguilar, to build a new medical center in Miami to prove their concept. "It was 30 miles away--different demographic, different dynamics--but within three months it was full and it was profitable," Hernandez says. "And then we decided, well, this should not be the best-kept secret in South Florida. We should expand it significantly." 

Two years later, in December 2016, New York City private equity firm InTandem Capital Partners acquired Cano Health and Comfort Health, another South Florida-based primary care practice, for roughly $30 million, according to Hernandez. The deal included other businesses as well, he told Inc., including a physiotherapy company and a billing and coding company. All of the acquired businesses now operate under the Cano Health brand.

"Cano has been really great about clinical care and clinical excellence, and has performed marvelously--not rated by us, rated by the payers, the insurance companies, and the like--in terms of outcomes that it's generated for its patient base," says Steve Cohen, managing director at InTandem Capital.

Since the acquisition, Cano has gotten additional funding and debt financing to build new clinics, as well as to purchase and renovate existing ones, so they have the "look and feel" of a Cano Health facility.

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Nationwide ambitions

While Cano may be successful in Florida, Hernandez's ambition of becoming "America's primary care center" poses an entirely new set of challenges. Regulations on all types of issues that affect health care provider organizations vary from state to state, says Jason Conger, an attorney for Lynch Conger who's been on the Cano Health board since 2015.

"Cano has developed a phenomenally successful and scalable model for Florida, and I believe the important elements of that model can be applied in other states," Conger says. "But it'll be challenging to deal with the different regulatory regimes." 

In addition to growing to more than 50 health centers in Florida in the next year, Cano Health is in negotiations to expand the business to Texas, according to Hernandez. He says that while the business model is easily transferable to other states, the tricky part is adjusting the business to better serve different populations. Pulling it off will require some savvy hiring. 

"Out of 36 centers, I consider myself an expert on two," Hernandez says, referring to Cano's Miami and Pembroke Pines locations. "But growing successfully means finding the right partners who understand the demographics of the population, and then getting out of the way."