We receive compensation for some links on this blog and are always grateful if you use these links to support our content. Any opinions expressed in this post are our own, and have not been reviewed, approved, sponsored, or endorsed by our advertising partners unless otherwise specifically noted.
Check out our 5 Travel Amenities to Bring Home After Your Next Trip.
The healthcare market is a trillion-dollar segment of the US economy – and growing. One often unnoticed – and untapped – healthcare market is for nonemergency medical transportation. Patients need transportation to physician appointments, routine treatments, diagnostic examinations, and other types of healthcare. Lyft and Uber have found a new niche – stepping up to meet this growing (and often well-reimbursed) – healthcare market.
Medicare, Medicaid, and commercial insurance will often provide reimbursement for the cost of nonemergency medical transportation. Rules governing such reimbursement will vary by plan and from state to state, but if taking public transportation or driving is not possible, coverage may be available.
Where Does Ridesharing Come In?
Rideshare companies like Lyft and Uber have been quick to enter local markets early, working through legalities on an ad hoc basis. But Federal payor programs have complex and well-defined regulations. The Centers for Medicare & Medicaid Services (CMS), for example, publishes a 17 page guide to nonemergency medical transportation compliance. Recent large Medicare/Medicaid fraud and abuse lawsuits have resulted in settlements of hundreds of millions of dollars against large organizations. Rideshare companies are wise to not play fast and loose in the healthcare market. One strategy has been to instead find development partners who can navigate the red tape.
One key driver for healthcare delivery inefficiency is missed patient appointments. Officials from healthcare startup Circulation estimate that 3.6 million Americans miss at least one medical appointment each year due to a lack of reliable transportation. The company seeks to improve patient access by providing reliable transportation options to patients. A major cornerstone of the program relies utilizing technology to cut through the red tape of the reimbursement bureaucracy to confirm patient eligibility and manage billing. The platform also navigates complex patient privacy regulations, manages scheduling, and determines the most appropriate scheduling platform.
Uber’s Healthcare Market Play
Last year, Uber announced a partnership with Circulation to provide transportation for hospital and health system partners in three northeastern states. After that successful pilot, the program has now expanded to include 700 health partners in 25 states including systems like Stanford Health Care in the Bay Area. Early outcomes of the program show 95% of patients arrive on time for their appointments. And drivers for the program have a 4.9 patient satisfaction rating out of a possible 5.0.
Their entry into the market has changed the game for the provision of nonemergency medical transportation. This healthcare market was previously dominated by smaller local companies. Other traditional transport providers such as yellow taxis and town car companies have also offered services for years, but none at the scale which the Circulation platform can provide.
Lyft has also entered the healthcare market. In Dallas/Fort Worth, they have partnered with MedStar Mobile Healthcare, an ambulance company. MedStar has already been an innovator in changing the status quo in the local healthcare market. One program has identified frequent utilizers of 911 services and directed focused preventive services to that population. Another program has utilized specialized nurses working with 911 dispatchers to determine whether lower acuity patients can be transported to urgent care services via Lyft rides. Not only does this keep ambulances available for true emergencies but it patients (and insurers) from the high cost of unnecessary ambulance rides. While the partnership is new, MedStar estimates the monthly cost of each Lyft driver is only $430 versus $450 per ambulance ride. (A quick back-of-envelope calculation assumes that MedStar is not an exclusive utilizer of Lyft but instead an on-demand buyer of driver services.)
More Healthcare Market Opportunities?
The healthcare market opens up a new buyer base for rideshare services. And unlike the competitive taxi market where rideshare companies have already exited in some nonprofitable cities, players like Uber and Lyft could stay in the nonemergency medical transportation market. They could choose to exit other types of transportation in an area if the healthcare market is robust.
Conversely, drivers might be more willing to sign up to drive. Most nonemergency medical transportation occurs during weekday business hours. And transporting scheduled patients with set geographic routes allows for a more predictable plan. Mileage, wear and tear, and time commitments can all be preplanned. But best of all, the hours of the healthcare market can balance out other network surges. The demands of nightlife patrons and frequent travelers may not overlap with those of Medicare patient appointments. This creates a true 24 hour rideshare economy.
As the healthcare market grows, innovation will no doubt spark new ideas. Uber and Lyft will likely stay on the edge of that bustling economy ready to reap the benefits.