Archive for 2013

In-House vs. Outsourced Non-emergency Medical Transportation

Monday, July 8th, 2013

As the nations economy continues to suffer, so do government and private healthcare agencies. Everyone is making cuts, trying to save money, one way or another.

One way healthcare organizations can save money, without making cuts to their employees or services, is to outsource their non-emergency medical transportation services to professional NEMT businesses that can provide these services better, faster, and cheaper.

For your consideration, here is an estimate of expenses for providing NEMT services in-house compared to outsourcing them.

In-house Transportation Expenses:

These estimates are based on self-performing transportation services for one full-size wheelchair van.

  • Cost of one full-size wheelchair van, equipped with the necessary equipment and technology: Used: $25,000-$35,000; New: $50,000+; Avg. Payment: $1,100/month
  • Annual liability insurance premiums: $7,500 (depending on market)
  • Annual salary and compensation for one driver: $30,000+ (including taxes & WC)
  • Annual salary and compensation for one transportation director or dispatcher: $40,000+
  • Driver training and certifications: $200 per driver
  • Vehicle permits, licensing, and registrations: $1,200 per vehicle
  • Driver background check: $80 per driver
  • Annual fuel costs (based on a 5 day week): $18,000
  • Annual vehicle maintenance: $2,600
  • Dispatch service and communication subscriptions: $450

Total Annual Expenses: $113,230

These cost estimates don’t include interest on loans or depreciation of equipment or facility rental.

Outsourced Transportation Costs:

  • Base fee per trip: $20
  • Cost per mile over base fee: $2.00

There is a national trend for organizations to outsource services that don’t align with their core competencies. By doing this, it saves them time and money so they can focus on their core customer services that generate revenue. Also, many companies who are primarily engaged in the NEMT services, will outsource the service to subcontractors in order to accommodate “surge demand”.