It is cliché to talk about a business owner forging a path in his or her field, but for Dutch Rojas, the trope is surprisingly apt.
Rojas is at the helm of a constellation of businesses designed around a central idea: a renaissance in the fiscal workings of the health care marketplace. Sano Surgery, Sano Contracting, Everyone Health, and soon-to-be-realized direct-to-consumer platform Shop Healthcare all emerged from his desire to reshape the market from within, providing better cost-saving health care options for employers, consumers, and providers.
AN ACCOUNTANT’S PERSPECTIVE
Rojas came into the industry through an unusual route. He does not have a background in medicine. Instead, he studied accounting. He wrote his master’s thesis on surgery futures and surgery options.
“I basically built a commodities market,” Rojas says. “Every single large industry in the world uses commodities to hedge their industries … and I wanted to create that,” in part with the idea of helping independent doctors sign long-term contracts to raise the value of their businesses and fight inflation.
His interest in the financial arena of health care began early when he was an undergraduate student in the mid-1990s. He went to a Protestant university that sent its students on mission trips around the globe. Rojas took an alternative option to go on volunteer trips, and he spent time helping doctors in Guyana, Kenya, and Indonesia construct temporary surgery centers.
“The first summer I did it, I fell in love with it,” he recalls. “I had no plans to be a physician, but I knew I wanted to help make medical care affordable and accessible. That’s where the whole journey started.”
He went to work for a real estate investment trust right out of college and was assigned to its ambulatory surgery center team. “I built surgery centers, and then syndicated surgery centers and helped doctors attract cases through alternative means—in other words, not through the carriers,” he says.
Rojas thought transparent pricing could help him get more business to surgery centers, which he wanted to promote because they have lower infection and readmission rates than hospitals. He initially owned surgery centers, but he quickly discovered the cost of ownership was a hinderance to shifting the wider market. He had an office for a time in SanFrancisco, not far from Airbnb. He looked at that company’s business model and realized it didn’t own anything.
“I thought, I could do that,” Rojas says, “And I could do that way faster (than building and owning centers).”
A VISION REALIZED
Rojas had a vision: connecting self-insured employers and their employees to medical providers across the country at agreed-upon, transparent rates. This would help employers keep costs down, save employees enormous amounts of money, and allow physicians with independent practices to hedge expenses and thrive financially.
He had a challenge: convincing each of those entities to buy into his idea. Without everyone jumping in, it simply wouldn’t work. But he wasn’t daunted. He’s been at it “since 1997, basically, and it’s super hard,” he says. “You have to be passionate. You have to tell your story over and over again. If you ask my wife, she will tell you that’s the one gift God gave me,” he adds with a laugh.
He has had to learn from his own experiences and redesign his approach.
“The hardest sale out of all of it is not the employer or the physician,” he says. “It’s the employee, the consumer whose participation is vital for the whole system to work. I can have the best prices, but when you need your ACL repaired and I offer you an option with no copay and no deductible, which is a wonderful financial incentive,” people immediately get suspicious about why this option costs less.
It’s pretty standard consumer psychology. “They think if something’s $1, it’s not a good product compared to the thing that costs $100. I literally had someone ask me, ‘Are you sending me to a veterinarian?’ and they were not kidding. That’s been the struggle we’ve had.”
One of the pivotal solutions Rojas put forward was introducing employer decision-makers to independent physicians in their area. “We’ll arrange a time for an employer to meet with the physicians. What this does is create ‘stickiness.’ Within our very complex, industrial health care system, nobody gets to meet anybody, but for people who struggle with chronic problems to finally have 20 minutes with a professional, all of a sudden there’s a relationship.
“I don’t know any hospital CEO—and I know a bunch of them—who would go and see employers,” he adds. “But that’s what independent doctors who run surgical centers in this country are doing with us. That was a huge change.”
PERSISTENCE PAYS OFF
Rojas finally started seeing traction in 2015 when a couple of employers decided to give his ideas a chance.
“I think I’d just been bothering them for so long,” he jokes. “I got on planes every week. I don’t know how my wife did it. She’s an angel.”
He learned from the mistakes of other companies doing similar things in the industry. “There are lots of firms with similar strategies to ours that came before we did,” he says, “and their No.1 mistake, when you talk to the legacy companies, they’ll say, ‘We went to the physicians, and we got contracts.’”
Since the fledgling companies didn’t yet have a consumer base to send their way, physicians often invested significant amounts of time and insurance money into the endeavor without seeing a return quickly enough to make it worthwhile.
“You do that a few times and don’t bring them any cases, and they get upset,” Rojas says. “I never wanted to make that mistake. I’ve been in this business my whole professional adult life, and I knew the surgeons to call. I knew which ones would help me. By the way, I want to tell you, out of thousands, I had maybe one or two who were like, ‘This is a horse-crap idea; get away, don’t bother me.’”
He cooperates with other industry players. One of Rojas’ early connections was Dr. Keith Smith, who was featured in the first volume of Maverick. Smith, who was committed to helping create a free market in the health care industry, opened the Surgery Center of Oklahoma in 1997 with co-founder Dr. Steven Lantier.
Smith says he published the center’s pricing online in about 2009. “I think that’s when Dutch took notice,”he recalls, “because it was radical. And I didn’t know how radical it was at the time, to post our prices online.”
“I was invited to speak at a Becker’s Conference in Chicago,” Smith says, “I gave a talk about how I create bundles, what I did with them and why I did it. My speech was poorly attended, but when I walked out of the speech, this guy ran across the foyer and just started hugging me. He didn’t say a word. But when he let go, he said, ‘I’m Dutch Rojas. This is awesome! I can’t believe you’ve done this!’ And that’s how Dutch and I met.”
“I saw a problem when I was young,” Rojas says, “and I am heart-led, which is probably very strange for an accountant.”
Being able to eliminate large deductibles and copays for average families is what draws Rojas and his employees to what they do: things like saving a family $7,000 out of pocket for a 4-year-old’s surgery.
“Things like that used to happen every month, and now they happen every day,” he says. “And it’s a pretty nice way to go to sleep at night.”