The current state of medical transportation: a landscape analysis.
No two medical transportation programs are built the same: the design and structure of a transportation benefit will differ depending on a health plan’s member population demographics and conditions, operating markets, capabilities, budget, and many other factors.
This analysis will survey the current medical transportation landscape, covering the different ways in which benefits can be administered to a plan’s population. Choosing the correct medical transportation program structure is critical in ensuring the success of a transportation benefit. With this guide, plans can more effectively evaluate the best transportation solutions for their unique needs.
AS health plans invest more time and resources into addressing social determinants of health, the popularity of medical transportation benefits continues to grow, particularly in the Medicare Advantage space. Medical transportation continues to have a strong measurable return, both on member health outcomes as well as on overall healthcare costs.
Since transportation benefits were first introduced with the creation of Medicaid in 1965, the industry has evolved and grown significantly. Over time, the adoption of transportation benefits by a wider segment of health plans and the evolution of transportation technologies have broadened the scope of available options in the marketplace. Medical transportation management has evolved from taxi/livery companies and traditional transportation brokers managing transportation behind a black box to a robust, fragmented marketplace containing many solutions that have relative advantages based on plans’ specific needs.
With more health plans opting to introduce medical transportation benefits to their members, it is important to understand the overall transportation landscape and the aforementioned relative advantages that different solutions provide. There are myriad ways in which plans can choose to implement transportation benefits, as well as several ways in which those benefits can be managed at the administrative level.
In general, choosing a benefit and management structure should focus on aligning your member’s needs with your transportation program goals. The below analysis will highlight the three most common structures by which transportation benefits are typically implemented: via self-sourced transportation providers, traditional brokers, and technology-centered brokers. It will then discuss the strengths and weaknesses of each structure and score each on a one-to-five scale across four key variables: transportation network, technology, managed services, and cost.
Every health plan that is evaluating transportation will have different benefit goals and needs - this analysis is intended to be a primer for weighing the relative strengths and weaknesses of different benefit structures against those needs. As such, the analysis focuses on the relative scores of each structure rather than the absolute scores of any one structure in a vacuum.
STRUCTURE 1: SELF-SOURCED TRANSPORTATION PROVIDERS
Self-sourced transportation is the broadest of the three structures outlined. Health plans may often choose to be the direct manager of transportation for their members. This can be done through contracting with individual transportation vendors, developing partnerships with local civil services organizations, providing vouchers for public transportation, or reimbursing members’ friends and families for private transportation.
The fastest-growing slice of the medical transportation pie is the emergence of transportation network companies (TNCs) like Uber and Lyft in the healthcare space. Both of these rideshare behemoths entered the healthcare market in 2018, and are investing heavily in helping increase access to care across the country. Plans can contract directly with TNCs and leverage their existing driver networks to provide basic low-cost rides to care.
A self-sourced transportation structure works best for plans with very low but very predictable transportation utilization, and whose members do not have a wide variety of conditions and needs.
Transportation Network: 2/5
The strength of a self-sourced transportation network is dependent on the number and types of providers a plan chooses to source. Typically, plans choose to self-implement a combination of the following options:
Purchasing and managing an internal vehicle fleet
Local taxi/livery companies
Local NEMT fleet companies
Public/municipal transportation partnerships
Local volunteer transportation organizations
TNCs (Lyft; Uber)
TNCs are often used for medical transportation programs primarily because of their network availability. In the United States, Lyft touts a 95% coverage and over 1 million rides fulfilled daily by their drivers. This ubiquity allows health plans to offer on-demand rides and ensure that wait times are minimized when compared to other transportation providers.
However, a major limitation of TNCs is that they only provide curb-to-curb sedan service. As such, it is not possible to provide benefits to an entire member population by contracting with a TNC. In fact, using a pure TNC model does not service the members who need transportation the most; members with chronic conditions and those who require additional assistance are the most positively impacted by transportation, and TNCs are not able to adequately service their needs. It follows that if a plan wants to offer a wider breadth of vehicle types and services levels, they will need to self-source a greater number of providers.
Because providers can be sourced a la carte depending on member needs, this structure offers great flexibility; it also represents a complex management model. Plans will need to individually manage billing, onboarding/training, compliance, and grievances cross each of the providers with whom they contract.
Additionally, assigning members to rides across a disparate transportation network can cause complications if the plan does not also implement a centralized method of managing rides. It is difficult to ensure that each member gets matched to the most appropriate and lowest-cost mode of transportation for their needs, since each transportation provider relationship is managed in a vacuum.
The use of technology in a self-sourced supply network is tied to the specific providers chosen. For the most part, contracting with an individual transportation provider will not allow a plan to leverage any transportation technology; while the majority of providers (particularly NEMT fleets) integrate third-party dispatch and routing software into their operations, they are mostly used internally.
Contracting with a TNC like Lyft or Uber to provide medical transportation services enables plans to leverage those companies’ technology suites. Lyft provides their Lyft Business Portal to partners, which can be used to book and manage rides (both scheduled in advance as well as on-demand), track ride statuses in real time, review usage reports, and more. The Concierge platform additionally allows plans to send rides to members who may not have a smartphone of the Lyft app themselves, ensuring that access to care is not limited by technology barriers. These solutions also have compliance measures in place to help ensure that only approved rides are being fulfilled through their platforms.
While TNC technologies provide easy implementation, process automation, and data tracking, there is a significant barrier to leveraging technology because individual providers’ systems are not interoperable. If a plan were to contract with both Lyft and a local NEMT partner, the disparate technology systems would pose a significant challenge with coordinating rides and gathering data across an entire transportation program. As such, self-sourcing provides as many challenges as benefits when it comes to technology.
Managed Services: 1.5/5
Some individual transportation providers (specifically NEMT providers) may handle managed services in-house; because they often work with multiple plans or member populations, they choose to leverage their own resources at scale. However, TNCs typically do not provide managed services beyond initial the initial onboarding stage and customer support.
Plans that self-source transportation providers without services offerings have multiple options for managing the services component of their programs: they can receive ride requests via a call center and leverage the TNC’s technology to book; they can allow care providers to book rides on behalf of their members, and/or they can allow members to book their own Lyft rides directly. Regardless of the option used, the plan will likely have to take on at least some managed services themselves.
Without a centralized management function across providers, there is often a fragmented service delivery that leads to many transportation issues. Like with technology, coordinating ride service across a siloed provider network leads to inefficiencies, a subpar customer experience, and higher services costs.
Transportation program costs are dependent on the number and types of providers sourced. Some providers and modes will be more costly than others; for example, public transportation, reimbursement, and TNC costs tend to be relatively lower, whereas NEMT costs tend to be relatively higher. Because of this flexibility, self-sourced transportation has the potential to be far less costly than other transportation program structures in the short term. Flexibility further allows plans to effectively manage cost control - because they manage each provider contract individually, they can scale down as a cost control measure.
One cost downside of the self-sourced model is that it is difficult to track and manage costs brought on by fraud, waste, and abuse. FWA costs are best controlled when plans are able to analyze performance data across their entire networks in a centralized way. Because individual providers operate with opacity, FWA costs can accrue relatively quickly with a self-sourced network.
Also, long-term cost efficiencies are more difficult in the self-sourced model. At a unit-ride level, cost efficiencies are unlocked when there is centralization across a network and plans can ensure that each ride is being fulfilled at the lowest costs while still meeting the member’s needs. When each provider is managed in a vacuum, there is little assurance that rides are being fulfilled at the lowest cost, and no knowledge into how costs are minimized across the network at scale.
STRUCTURE 2: TRADITIONAL TRANSPORTATION BROKERS
The second common transportation program structure - traditional transportation brokers - have historically dominated the industry, both in terms of dollars and size. Traditional brokers create and manage relationships with multiple transportation modes and providers, creating one consolidated network. Brokers operate as middle-men between the transportation providers and the plan members, often managing every aspect of a transportation program.
Traditional brokers were formed to address the needs of Medicaid populations in particular; the federal mandate requiring Medicaid beneficiaries to have access to transportation has created a market in which a handful of brokers control the vast majority of Medicaid populations. These brokers are designed to operate at scale and support the full spectrum of medical transportation for chronically-ill, underserved populations.
A traditional transportation broker structure works best for large-scale, multi-regional managed Medicaid plans
Transportation Network: 4/5
Brokers often source transportation providers to build the most comprehensive networks possible for their partners. Because brokers have the majority market share in medical transportation, they are a major source of ride demand for transportation providers. As such, brokers are able to onboard new providers with relative ease, creating networks that encompass all modes from TNCs to NEMT to public transit, and all service levels from basic curb-to-curb all the way up to room-to-room. While network strength can be a differentiator when evaluating traditional brokers, the marginal differences in network strength between brokers are shrinking more and more as the industry becomes commoditized.
Traditional brokers offer out-of-the-box solutions for the plans that they work with, giving plans a full-spectrum network regardless of their members needs. On top of that, most traditional brokers are compensated as a percentage of total transportation spend. This creates a situation in which brokers are not incentivized to fulfill rides that create the best member experience at the lowest cost, but rather they are incentivized to play favorites when assigning rides to providers in their networks. Brokers should be evaluated on the efficiency of their network as much as, if not more than, the availability of the network.
Traditional brokers have historically operated in a mostly analog world. The typical workflow for a traditional broker involves manually recording ride request information, building schedules for the transportation providers in their network, and using pen-and-paper or spreadsheets to record ride information. Additionally, the lack of technology means that traditional brokers offer very little transparency to plans with regard to overall program performance and spend.
Traditional brokers also tend not to offer technology tools to their member populations for managing their own benefits. Because they were formed primarily to serve Medicaid populations, brokers likely do not see an incentive to develop member-facing technology for members who are less technology savvy.
Without technology, it is difficult for traditional brokers to manage compliance. If there are no electronic records of a given member’s benefit structure and restrictions, brokers often see a significant amount of non-compliant rides being fulfilled across their networks.
While there has been a trend towards technology adoption amongst the large national brokers, there are still gaps. Plans who choose to contract with traditional brokers should be aware that the relative lack of technology can be a barrier when it comes to analyzing program performance and using transportation data to measure the return on a transportation benefit.
Managed Services: 4.5/5
One of the biggest advantages that brokers provide to plans is their ability to take on managed services. Brokers frequently operate as ‘middle-men’ between plan members and transportation providers, operating large-scale call centers to coordinate rides across a member population and transportation network. They may also provide core services such as grievance management and benefit education for members. Brokers who do not use technology effectively also have a large services component for building ride schedules, communicating member information to drivers, and other tasks that technology could otherwise automate. Finally, brokers may choose to provide ancillary services such as transportation network liability management, member intake, technology training/on-boarding, and strategic thought partnership.
When approaching how services are administered, some brokers provide all of their services as part of a contract, or work with their partners to provide an a la carte selection of the most critical services needed. Plans who want to outsource their entire managed services components should evaluate brokers who offer the former. If a plan has an existing call center, though, they should consider brokers who will give them the freedom to continue running their own call center rather than one that will force the program to adopt a third-party call center.
Brokers are typically more costly in the short-term than self-sourced transportation modes due to their comprehensive nature and added services components. However, thee large-scale nature of these brokers allows them to take advantage of economies of scale. Because they have deep relationships with providers across the country, they often receive better rates than what those providers would charge in a self-sourced model. Traditional brokers enable plans to see long-term cost benefits as they grow within a program and increase their volume.
The ability to effectively control costs depends on the business model adopted by the broker. The traditional broker business model tends to be primarily based on a fixed percentage of overall spend. As mentioned previously, brokers whose business model centers on percentage of total transportation costs are incentivized to fulfill rides at a higher cost to the plan. Aligning a plan’s goals with the appropriate business model will best allow for cost control and minimization.
Finally, cost transparency affects how cost should be evaluated across brokers. It’s not only important to understand how much you are spending on a transportation program, but also how that spend is being used. Brokers with advanced data reporting capabilities will be able to provide detailed cost breakdowns with regards to FWA management, unit-ride costs across different providers. Conversely, brokers without this ability often bill plans behind a black box, providing little transparency and fewer ways to work towards cost minimization.
STRUCTURE 3: TECHNOLOGY-CENTERED BROKERS
Technology-centered brokers represent a more recent transportation program structure that has been growing in recent years. Many startup companies have recognized the technology gap that exists in the traditional broker model, creating technology suites that automate historically manual processes. Like traditional brokers, they consolidate transportation providers and leverage their technology to operate as a middle-man between the providers and plan members.
Because these companies tend to be newer on the whole when compared with their traditional counterparts, they are also often smaller in scale. The technology-centered broker structure is also quite fragmented; technology-focused companies serving specific aspects of transportation have emerged in this fast-changing marketplace. Today, plans can choose to partner with companies who individually service specific aspects of transportation management, such as dispatch, ride scheduling and routing, billing, etc.
Technology-centered brokers tend to be more flexible than traditional brokers. Due to the malleable nature of implementing technology, rather than offering an out-of-the-box solution, it is much more common for these companies to offer specialized programs for each plan that they work with.
A technology-centered broker structure works best for plans of all types with varied member needs and a commitment to increasing care access.
Transportation Network: 4.5/5
Technology-centered brokers are able to support all transportation modes from TNCs to NEMT to public transit, and all service levels from basic curb-to-curb all the way up to room-to-room. Transportation providers are incentivized to work with brokers by the ride volume that brokers can provide; to this end, technology-centered brokers are able to create relative parity in terms of network strength given that they reach a critical mass in ride volume. Because these companies tend to be smaller than traditional brokers, they may have a harder time building a commoditized network until they are able to achieve significant demand.
Where technology-centered brokers have an advantage over traditional brokers is in their agnosticism in assigning rides to members. These companies often have software algorithms that automatically assign each member to the most appropriate driver, vehicle, and transportation provider based on a variety of measurable factors. These technology systems are designed for efficiency and allow a network to operate effectively no matter the scale of the transportation program.
As the name implies, technology-centered brokers’ biggest strengths lie in their technology solutions. Full-service technology brokers have solutions for automating every aspect of a program, from booking to member/vehicle matching to route optimization. They centralize all transportation providers onto one integrated technology platform, creating uniformity in the way that rides can be managed across multiple providers and modes. They also provide critical data and insights to plans in order to create a more effective performance feedback loop.
Technology-centered brokers may even offer member-facing technologies, such as a web portal for members to book their own rides and manage their benefits, to ensure that care is as accessible as possible. Because these brokers were not primarily built to service Medicaid populations, they are more adept at developing solutions for tech-savvy member populations.
Another advantage that technology brokers provide is their ability to more closely manage compliance. Through technology, plans can more easily restrict transportation benefits (both on the ride level and at the member level), ensuring that each and every ride is fully compliant. They can also manage transportation provider compliance electronically, automatically removing non-compliant drivers/vehicles from their networks in real time.
When evaluating brokers, plans should understand the full scope of technology provided, and whether it aligns with the plan’s goals for a transportation benefit. Additionally, plans should evaluate each broker’s data collection and reporting capabilities. Brokers who provide granular performance data and a seamless way to integrate that data with the plan’s own system are more valuable, since they allow for detailed analysis and transportation program optimization.
Managed Services: 3/5
Very few technology-centered brokers are operating at a large enough scale to fully support internal managed services operations. Most offer a technology suite without providing managed services, requiring the plan to take on many ancillary services in-house.
However, because these technology solutions automate what are traditionally manual process, the services requirements for running a transportation benefit with a technology-centered broker are significantly lower than they would be with a traditional broker. Technology can replace what is typically an hours-long process (likebuilding ride schedules for the next day’s rides) into mere minutes with the click of a button. As a result, plans can manage their own services in-house using the broker’s technology. While this is still a significant resource burden for plans, it typically results in fewer inefficiencies than a fully self-sourced model with a disparate provider network.
Technology-centered brokers tend to be more expensive in the short-term than their traditional counterparts because, on the whole, they are smaller organizations and cannot achieve the same economies of scale. They also tend to be more expensive than self-sourced modes since they offer more comprehensive networks as well as greater technology and services support. However, a high-performing technology broker will be more cost-effective in the long run than a traditional broker due to their ability to provide granular transparency and insight.
A common business model for technology brokers includes a technology license fee in addition to a per-ride fee. While this may be costly in the short term, the business model is often structured for a plan to realize significant savings over time. Unlike traditional brokers, technology brokers are incentivized to fulfill rides at the lowest cost to the plan. As such, the cost of transportation at a unit-ride level tends to be lower.
Technology brokers can more closely track and monitor fraud, waste, and abuse through their systems when compared to traditional brokers as well. Because every ride’s progress and details are tracked, many technology brokers have stopgaps in place to prevent fraudulent rides. This ability limits unnecessary costs for the plans that are much more difficult for traditional brokers to limit.
Cost transparency is the final area in which technology brokers provide an advantage over traditional brokers. Technology brokers create transparency by connecting all providers onto one centralized platform. This enables granular analysis of per-ride costs across providers, vehicle types, regions, members, and more. By having deep visibility into program spend, plans can optimize their programs for cost efficiency over time, making it more likely that the broker will operate with the members’ best interests in mind rather than their own.
When it comes to implementing a transportation benefit, there is no universal right or wrong way to do so. The structure that you choose should depend on your goals for transportation as well as limitations with regards to member population demographics and conditions, geographical location, budget, and several other factors. This analysis serves as a primer by which plans can evaluate different structures against their needs and begin the process of evaluating individual vendors.
SafeRide Health is an end-to-end provider of medical transportation technology and services. We work with health plans across the country to simplify medical transport, streamline care coordination, and improve patient outcomes. Contact us today to learn more about how we can help transform your member experience, one ride at a time.