How to Start a Medical Transportation Business? (Guide with Cost Estimation)

Are you passionate about making a difference in the healthcare industry while gaining financial independence? 

If so, starting a medical transportation business could be your perfect opportunity to combine compassion with entrepreneurship.

The NEMT industry is forecast to reach $15.6 billion, growing at a CAGR of 9% from 2022 to 2028. This stat sounds promising to anyone looking to make a career in it.

Wondering what has led to this surge? 

It’s the factors, such as the fast-growing aging population, a lack of viable transportation options for disabled or underserved communities, and limited rural transport alternatives.

If you are also interested but don’t know how to start a medical transportation business, you are in the right place.

We’ve compiled this guide that discusses the entire process – from understanding the benefits of the NEMT industry to calculating the costs and necessary steps to launch your business.

What Does a Medical Transportation Business Do? 

A medical transportation business provides transportation to people who need it, such as seniors and specially-abled people.

The main goal of a medical transportation business is to provide safe, reliable, and comfortable transportation to people who can’t drive and access public transportation.

A medical transportation business doesn’t require office space or extensive equipment. So, if you have a limited budget but want to contribute to the healthcare industry, a medical transport business can be a good opportunity.

Understanding emergency vs non-emergency medical transportation business 

Emergency medical transportation services often form a part of a city or country’s public safety network. They involve different government agencies and groups that work in coordination to tackle medical emergencies and are highly regulated. 

Contrarily, non-emergency medical transportation businesses are often private and cater to individuals looking to visit and return from medical appointments safely and on time.  

Talking of the types of clients NEMT businesses serve, they include: 

• Specially abled people who can’t use regular transportation
• Patients recuperating from surgery or chronic illness who can’t drive
• People who need special equipment like wheelchair lifts
• Stroke survivors or those with brain injuries who are intellectually disabled

There is yet another term: medical courier. A certified medical courier helps transport medications, medical supplies, lab samples, or even organs, but not patients. 

How to Start a Medical Transportation Business

A Reddit user asks: 

I have been wanting to start a business of my own and have been going back and forth between a few models. Most recently I talked briefly with someone who runs a fleet of 27 vans and offers NEMT (Non‐Emergency Medical Transportation). I’ve been trying to do my research on this to see if this is worth getting into, especially with the aging population of today. But with my research, I don’t see much regarding those who have done it.

My main questions –

1. Profitability/Scalability
2. Things you wish you knew before getting into the business
3. Would you suggest someone looking to start a business of their own go down this path

Any feedback/input would be GREATLY appreciated!

If you have questions similar to these, these are the steps you can follow.

1. Choose the right location

When starting a medical transportation business, you must choose the correct location. The area should be accessible and easy to find. It should also offer parking spaces for your vehicles and a place where patients can wait comfortably.

In addition, it should have good public transport connections so patients can get there quickly. Choose a venue near hospitals or clinics. This will allow you to attract more customers since many people will already know where to find your business.

For example, if you provide home health care and offer transportation services for people who need help getting from their homes to doctor’s appointments or nursing homes, you’ll want to be close enough to your clients that they can quickly get there. 

Hence, your target area will be mostly around residential societies and neighborhoods. However, if you are a company that provides transportation for patients, being closer to the hospital may be more significant.

2. Register your business

There are several business entities, each with advantages and disadvantages. Medical transportation businesses must select a (legal status) business structure that will shape tax obligations, personal liability, and business registration requirements. 

Here are the main options:

• Sole proprietorship: This is the most accessible type of business to start and maintain. You’re personally liable for any debts or legal issues that arise from your company.
• Partnership: This is similar to a sole proprietorship, but there are no annual fees or ongoing paperwork requirements. However, partners are personally liable for all debts or lawsuits against their company.
• Corporation: This requires an initial registration fee and ongoing paperwork requirements. It also offers limited liability protection and tax advantages over other entities because profits can be passed on to shareholders. 
• Limited Liability Company (LLC): LLCs provide some protection from personal liability while offering flexibility regarding how much tax you’ll pay on profits.

3. Apply for business licenses and permits

Starting a medical transportation business is a great way to make money and help people. But before you can get started, you need to meet all the legal requirements.

In most states, you must get a license or permit from your state and county governments. Once you have those, you must obtain a federal license or permit and register with OSHA. You’ll also need a valid driver’s license to operate motor vehicles. 

Getting all these licenses can be time-consuming and expensive, but it’s worth considering the amount of money you’ll make with this business. Moreover, it will help ensure your compliance with regional and federal laws, preventing legal violations.

4. Invest in the right vehicles and equipment

The medical transportation business is essential to taking patients to healthcare facilities or hospitals safely and timely.

For that, medical transportation businesses use various vehicles and equipment, including:

• Ambulances and other vehicles have emergency sirens, lights, and medical equipment, such as defibrillators, oxygen tanks, and stretchers.
• Medical equipment, including wheelchairs and walkers.
• Medical supplies like bandages, gauze, and gloves.
• Medical transportation businesses also use proper vehicles, including wheelchair-accessible stretchers or minivans.

Further, you must ensure that all your vehicles meet NEMT state regulations including wheelchair accessibility, safety standards, and proper signage.

5. Hire a team

To build a successful medical transportation company, you need a team of the best and most experienced workers. As your NEMT business grows, so will the number of patients and contracts you accept.

To ensure your patients get industry-standard service quality, you must hire experienced drivers and office managers to keep things running smoothly.

But how do you do it, as a Reddit user asks: 

Starting a medical transport company. How do I find my first employee/driver?

You can first create a detailed job description of what exactly you expect from your NEMT driver. You can then utilize dedicated recruitment platforms, utilize social media platforms, or contact staffing agencies to do it for you. An employee referral program can also be a good way to incentivize your employees if referred candidates get hired successfully. 

However, proper background checks are crucial to ensure no driver has a criminal background or a history of violations. You must also train them to communicate cordially with patients, especially the specially abled ones.

6. Insure your property and employees

Proper insurance coverage is vital to minimizing financial risks and safeguarding your business against unprecedented accidents and legal issues. Insurance costs may vary based on driver experience, history, types of vehicles, or average daily trips.

So, you should always connect with multiple insurance companies to know their plans and charges. After thoroughly analyzing and comparing insurance plans from all companies, you should pick the plan that fits your budget and requirements.

7. Market your service offerings after thorough research

In medical transportation services, it is important to know the kind of people likely to use them and the problems they’re looking to solve. Accordingly, you can figure out a marketing strategy to speak to them and address their needs so you can get more medical transportation contracts.

For example, if you’re marketing transportation services for senior clients with disabilities, you might mention your drivers are specially trained to handle wheelchairs and walkers. You can mention how they’ll help seniors with dementia remember where they’re going so they don’t get confused by the route.

Besides, you can use social media platforms to connect with your potential clients. These can include healthcare providers, hospitals, medical facilities, nursing homes, and non-profit government organizations. You can also participate in industry events, conferences, or community events to win more referrals and partnership opportunities. All these steps will eventually strengthen your brand presence.

8. Provide top-notch customer service

To provide good customer service for a medical transportation business, you must understand what your potential customers are looking for.

You should be able to anticipate their needs and take steps to meet those needs immediately. If an issue arises, you should be able to handle it in a way that keeps your customers happy and engaged.

How Much Does it Cost to Start a NEMT Business?

There are a lot of variables that go into estimating the total cost of starting an NEMT business. 

Below are a few significant ones. 

1. Vehicles: The price can range from $20,000 to $50,000 per vehicle, depending on the type and whether you buy a new or used vehicle. You may also need to account for the cost of making your vehicles accessible to elderly or disabled patients. 
2. Insurance: Insurance is crucial to protecting your business and clients. The insurance cost will depend on factors like the number of vehicles, types of vehicles, and your location. Expect to pay something around $5000 to $10000 annually. 
3. Licenses and permits: You’ll need to obtain the necessary licenses and permits to operate legally. These costs can vary greatly depending on your location. Research your local and state requirements. This could cost anywhere between $1000 and $3000 on average. 
4. Marketing and advertising: Getting the word out about your business is essential. Advertising and marketing expenses can vary depending on how aggressively you market your business. This includes costs for creating a website, business cards, flyers, and online advertising, which can range from $2000 to $5000. 
5. Office space and utilities: If you decide to rent office space, this will be an additional cost. However, starting from a home office can significantly reduce this cost.
6. Employee salaries: If you plan to hire drivers or office staff, you’ll need to factor in their salaries. On average, you can expect to hire an NEMT driver at around $17 per hour.  You must also consider the salaries of scheduling and administrative staff.
7. Fuel and maintenance: Running vehicles means spending money on fuel and regular maintenance. These costs will vary depending on how much you use the vehicles and the current fuel price. On average, they can cost between $1500 and $3000 per month. 
8. Miscellaneous expenses: Don’t forget to account for miscellaneous expenses like office supplies, phone bills, and software for scheduling and managing your business.

Considering all these expenses, your non-emergency medical transportation business can cost approximately between $30,000 to $60,000.

Benefits of Starting an NEMT Business

Non-emergency medical transportation (NEMT) is an excellent business option for those looking to make a difference in their community and have an entrepreneurial spirit.

The following are prominent benefits of starting a non-emergency medical transportation business.

• NEMT services cater to a wide range of clients, including the elderly, physically disabled, or post-operative patients in recovery. It lets you serve various segments of patients and make an impact in their lives. 
• Being a medical transportation owner, you can provide transportation services for those who can’t use conventional methods or drive themselves. This way, you can offer reliable and safe transportation to improve your patients’ quality of life and overall well-being. 
• As an NEMT business owner, you can decide on your operational hours, types of services, and service areas. It gives you the flexibility and autonomy to run your business your way. 
• While providing medical transportation services, you get an opportunity to collaborate with healthcare facilities, clinics, and individuals looking for transportation services. By building strong relations through reliable services, you can turn them into repeat clients and increase your revenues. 

How Much Does a Medical Transportation (NEMT) Business Make?

On average, NEMT providers earn around $500,000 annually and can range anywhere between $400,000 and $700,000.

However, several factors influence the NEMT business profits. 

Efficient route planning, operational excellence, and adherence to regulatory standards contribute to cost savings, which positively impact the bottom line. 

Additionally, forming strategic partnerships with healthcare providers can lead to a steady flow of clients, enhancing overall profitability.

3 Primary Challenges of Running a Medical Transportation Business and Ways to Overcome Them

While launching a medical transportation business may be exciting, running it may present several challenges. 

Below are a few prominent ones. 

1. Compliance adherence

There are no fixed or standard guidelines for NEMT providers. They instead vary based on the state in which you operate. Moreover, the licenses and certifications required for the staff and drivers may differ from state to state. 

Therefore, NEMT business owners risk heavy penalties if they fail to comply with their state requirements and guidelines regarding non-emergency medical transportation. 

Solution: 

Checking with your regional authorities is essential to understand state-specific guidelines regarding medical transportation regulations. You must also find out the licenses and permits you must obtain for your business. 

Some states also require your drivers to be trained to handle medical emergencies and demand additional licenses and certificates. Therefore, maintaining records of drivers and auditing them regularly is essential. These measures help you comply with the latest guidelines and regulations, preventing legal violations.

2. Delayed arrivals or no-shows

Timely service failures result from driver shortages, scheduling errors, or outdated manual planning. Inefficient routes lead to delays and poor customer satisfaction.

Solution:

Use route management software like Upper to optimize routes based on traffic, driver shifts, and customer availability. Save regular customers’ details, schedule dispatches in advance, and prevent overbooking.

3. Suboptimal capacity utilization 

Handling last-minute requests is difficult, leading to idle time, underutilized vehicles, and inefficiencies.

Solution:

Use Upper to modify routes in real time for urgent pickups or cancellations. Equip vehicles with the necessary tools to accommodate various transportation needs. You should provide customer service training to help drivers save time and offer excellent customer service to passengers.

Ensure Reliable NEMT Services with Upper

Timeliness is indispensable for a critical business like non-emergency medical transportation (NEMT). NEMT scheduling software can help you offer on-time and reliable transportation services for patients.

On-time transport and managing patient data

In NEMT, punctuality is non-negotiable. Upper Route Planner uses smart routing to ensure timely arrivals. It centralizes patient information securely for quick driver access. This leads to more personalized and safe care.

Simple dispatch and advanced scheduling

The software features a one-click dispatch that sends routes to multiple drivers at the same time. It also allows you to plan routes for weeks in advance and schedule their dispatch. It reduces manual errors and delays.

Live tracking and immediate communication

Real-time GPS tracking displays accurate driver locations. The system immediately highlights any delays. Drivers use an intuitive mobile app for updates and digital proof of service. Direct communication helps resolve issues as they arise.

Efficient routing, client alerts, and advanced reporting

Upper finds the quickest routes while avoiding traffic congestion. It minimizes fuel usage, saving both time and money. Automated client alerts keep passengers informed about arrival times. Comprehensive reports offer clear insights for continuous improvement, while safety checks ensure regulatory compliance.

All these features help you maximize your route efficiency and minimize time spent on the road.

Putting Your Medical Transportation Plan into Action

Starting a medical transportation company or a profitable senior transportation business, even if it’s non-emergency medical transportation, is not for the faint-hearted. You must be willing to invest the time and energy necessary to succeed and garner many opportunities. Becoming a medical courier can also provide a pathway into this field, offering essential services that cater to healthcare needs and patient care.

When all is said and done, remember that you should be on time when running a medical transportation business for elderly and disabled patients. This is true even for non-emergency medical transportation (NEMT) services or new businesses that deal with non-emergency cases.

This is where Upper helps medical transportation companies. Upper route planning and optimization software ensure that you take all driving contingencies into account and have the shortest routes to always reach the patients on time.