Through my market research, as well as what I've personally seen past/present, it seems that a lot of other providers are very cheap - not including a business name on their vehicles, cracked windshields, broken side mirrors, dirty vans inside and out, no/poor uniforms, mini-blinds for window coverings inside vans, etc.
I understand cost control, margin-based decisions, and am not being flippant. But from your perspective, why are so many of these providers operating with such low standards? Are their standards that low or they simply not making enough money?
That is a very interesting, yet, very observant question. In fact, witnessing the poor level of performance and professionalism by my own competition is what confirmed I needed to start my own NEMT business.
In researching my local competition, I literally followed a driver up an elevator who was pushing a patient in a wheelchair to dialysis. He was wearing a New York Giants baseball hat, a Buffalo Bills jersey, and cutoff sweatpants. Needless to say, "uniforms" were no where in consideration for my competitors until I entered the market. Soon thereafter, they slowly started instituting some semblance of a uniform policy.
But in answering your question, let me offer my "Top 5 List" of assumptions with 5 being the least and 1 being the greatest:
5. Their parents did raise them with any manners (ouch, that is a little personal!)
4. They inherently have low personal standards and don't recognize the problem. If you don't respect yourself, how can you respect and appreciate others? (even bigger ouch - getting way too personal!)
3. They recognize the problem, but simply don't care
2. They only serve Medicaid brokers (the "low hanging fruit" of the industry) and, thus, their rates of reimbursement are so low that their profit margins are too slim to afford anything of quality
1. They have absolutely NO comprehension of branding, scaling, and building a legitimate business and, thus, completely miss even the simplest of opportunities to share and connect their company name, brand, and reputation with their clientele. After all, it doesn't cost a lot of money to AT LEAST have matching colored shirts, pants, and washing and cleaning your vehicles!
In your training materials, you talk about having a wheelchair on board, and I understand why. I'm having difficulty locating/finding a holder to secure the rear wheel well to keep it off the floor and out of way of driver and passengers. Do you have any suggestions for storing the wheelchairs?
You are absolutely right, you should always be prepared to carry between 1-2 wheelchairs on board for when necessary for general discharges. You are also right, the absolutely best place to store them is above the rear wheel well. Unless you have a jump seat mounted over the wheel well, it is dead space that is ideal for storing extra wheelchairs.
However, do NOT complicate what doesn't need to be complicated. You do not need a specific or manufactured "holder." In fact, you should want one as I will explain.
First, the solution is simple. You drill and attach metal eye hooks (bolts) through various places all throughout the back of your vehicle. You will want to attach them through the ribs of the vehicle, window frames, and even mounts on your jump seats. The more the better because you will then use bungee cord to strap your wheelchairs tightly to the wall above the wheel well.
Some things to consider:
Again, don't complicate what doesn't need to be complicated. Keep it simple, YET, secure!
Can you please offer more insight into increasing your rates for evenings, weekends, and holidays? More specifically, is there a certain percentage or metric that you would recommend using to know how much to increase?
You ask a very important question. Many providers fail to adequately increase their rates for after hour work. In fact, I’ve actually seen some who don’t even increase their rates at all – that’s CRAZY!
There are multiple things to consider as follows:
I'm having difficulty understanding relevant coverage required for insurance. I know the state requires only the minimums, but it appears brokers require much more. Is this common? I would really like to understand all of the elements of a coverage required to properly protect my business, employees, and family.
Thank you for the great question! Insurance is obviously very important and it can definitely be confusing when you consider the lack of continuity between states with respect to the NEMT industry, the countless brokers, and possible facilities you might be soliciting for contract. A few things as follows:
1. A General Liability (GL) Policy is NOT necessarily considered and “Umbrella Policy” for all businesses so you definitely need to confirm with the insurance agent to ensure you understand what is and is not covered in the GL. I have witnessed some business owners, not necessarily in the NEMT industry, get a GL policy and they believe they’re personally covered for any circumstance at any time. This is definitely not the case. Were your actions at the time of an accident not be in the capacity of your business you might not be covered. So just ensure your scope of business is clearly articulated in your GL to ensure proper coverage.
Bottom line, a GL policy is always good to have and, typically, are not that expensive. For the NEMT industry, I would equate a GL policy to simply extra reassurances. Your GL should provide coverage for incidents not covered in your auto policy. For example, your auto policy will obviously cover your driver and patient for any accident that occurs in or around your company vehicle. But what happens if your driver or patient is involved in an accident in a facility? Your auto policy will not cover such an accident. That is where you GL would prove essential.
2. You obviously need an Auto Policy. In MOST states, for the NEMT industry, you need “Livery” insurance meaning you can transport passengers for hire. However, in a few states, this “Commercial Insurance” insurance will also cover you in transporting passengers for hire. Regardless of state and variation in terminology (livery versus commercial), just make sure you are properly covered to transport passengers for hire. Again, to be clear, “livery” and “commercial” are NOT always the same, and depending on your state, “commercial” insurance may not provide adequate coverage for the NEMT industry.
As an interesting side note, click here to check out an interesting post regarding technicalities of insurance and how it can prove costly if you’re not properly covered and insured for transporting people for hire.
3. You will need “workers compensation” for your employees. Workers compensation is important and rates will vary by job description. IE: You will pay more per $100 in payroll for a NEMT drivers versus your dispatchers and office personnel. The reason is simple - drivers are classified as being a more “high risk” for injury versus office personnel.
A couple of other quick notes as follows:
a. A good insurance agent will have some type of “sexual molestation, abuse,” and “theft” clause in your policy. This is very important because you will have drivers entering people’s homes and facilities. Please ensure you have such stipulations and coverage in your policies!
b. Do not fall prey to insurance or classifications you don’t need such as “Professional Insurance.” Just because you’re in the NEMT industry and associate with the medical industry does not require you to have “Professional Insurance.”
c. Do not take the highest limits. Especially if you have an adequate GL Policy, don’t go crazy with high limits unless you have a contract that warrants such limits. IE: You’re working with Medicaid, the government, or some type of contract that stipulates you must have a $2 Million policy.
We get a lot of business from local hospitals and nursing homes. We have lost a lot of stretcher and wheelchair transports because we don't provide oxygen tanks. Every medical vendor wants me to have a prescription to provide oxygen. I don't want to go this route but my competitors have oxygen tanks, so how can I beat this evil?
Thank you for the great and very relevant question! I absolutely HATE having NEMT companies to have to go the oxygen route - literally providing oxygen to patients versus simply accommodating oxygen as provided by the hospital or nursing/rehab facility. The reason is simple - liability!
As of this posting, I am scheduled to serve as an expert witness in a few months for a case where a provider was taking a hospice patient home. The patient was "given" a few months to live, but literally died the following day. The family is suing the provider because they are suggesting there was about a 15 minute time frame when the patient was not connected to their oxygen when being transferred from the vehicle into the residence. Needless to say, this is a bogus claim and an attempted cash-grab by the family from the insurance company, but regardless, it's still a very difficult situation for all parties involved.
In getting back to your specific question, the only "real" benefits to providing oxygen are (1) you're not longer losing trips to competitors as it sounds like the case with you, and (2) you can generate a small source of revenue because you will, obviously, markup the cost for providing oxygen. But let me be clear, if it wasn't for the situation of you losing trips because you don't provide oxygen, I suggest the modest amount of money you can make in marking up the delivery of oxygen is definitely not worth the "risk versus reward."
But honestly, in regards to your specific situation, IF you can’t beat them, then you will need to join them. This sounds like an instance where, in an order to remain competitive and to adequately meet the needs and expectations of your clients and the facilities, you need to do something you don’t like to do. To remain competitive, you need to adapt. Again, I don’t like it, but I understand. My strongest recommendation, however, is that you implement clear and articulate policies for how your employees handle and delivery oxygen. Enforce high standards and protocol.
Consider the scenario I just shared regarding the hospice patient. Without disclosing too much detail, Regardless, I am sure there are ways the situation could have been avoided. I prefer to have NEMT providers focusing on the logistics of transportation and not on literally providing or becoming involved in the care and wellbeing of the patient which, in my opinion, can easily happen if your drivers are responsible for implementing and setting up a patients oxygen.
I am wanting to startup a new transportation business with one vehicle but recently saw a franchise opportunity and an existing transportation business with 5 vehicles and was wondering which plan would give me the quickest ROI. I am new to the transportation business but am eager to start helping people regardless of the route I need to take. Thank you for your time.
Thank you for the great questions. Without knowing more about the businesses or franchise you are interested in acquiring it is difficult for me to offer targeted insight with regard to which will give you the quickest and most robust ROI.
However, I am 100% against the franchise business model for NEMT for several reasons as follows:
1. They cannot guarantee you trip volume – REGARDLESS of what they promise you!
2. NEMT franchises will work to sign you up with Medicaid Brokers who are the lowest form of reimbursement. Brokers should NOT be the foundational source of your revenue nor should they be a main attraction or source of enticement to invest. Medicaid broker work is what I call the "low hanging fruit" - anyone can get it as it is readily available
3. Like any franchise, the franchise will require regular franchise fees for which I am 100% against being pick pocketed for the life of your business. Needless to say, when it comes to NEMT and home care franchises, you will eventually outgrow the need for the franchise and, thus, should no longer need to pay such laughable fees
4. Over the years I have had about a dozen or so franchise business owners in various states contact me for advice on either selling their business and/or finding a legal solution to opt out of the franchise
So, buying an existing business being sold independently is an option, but that requires much more research and lengthy discussions for which I am happy to assist, but you will need to contact me directly so I can itemize the resources and materials you will need to provide.
Obviously, you can start your business from scratch as my material is designed to assist. But regardless of circumstances or which direction you are currently leaning, I most certainly can tell you that I would NEVER advise you or anyone to invest in an NEMT or home care franchise. They are foolish business model with a limited shelf life. That last thing you want to do is no longer need them, yet, be stuck paying them fees and royalties or the life of your business.
I am working with three different worker com brokers but we don't get too many calls from them, maybe 2-3 calls per day even though we offer them as low as $1.65 pr mile for ambulatory and $2.20 for wheelchair. I know that other providers are getting many more calls. How can we build a good connection and relationships with them? Do we have to pay some kind of commission?
Thank you for your great question! Some random thoughts, ideas and feedback as follows:
1. I obviously don’t know what your competitors are charging, but you need to be VERY cautious about continuing to reduce your rates in an effort to try and make yourself appear more appealing to customers and potential comp brokers in general. Reducing your rates is definitely a slippery slope that can put you in a very bad situation.
First, you tighten your profit earning potential. If anything happens during a trip in terms of duration or demand you can find yourself losing money - quickly! Even more, you legitimately don't have the resources to grow and scale your business!
Second, you can look cheap – no one likes cheap or wants to use a provider who looks like they might be out of business soon.
Third, when your rates are low it can be VERY difficult to raise your rates in the future, especially when you have created a solid clientele and they have grown accustomed to your low rates!
2. Just as I don’t know anything about your competitors, I similarly, don’t know much about your business and what you've been doing to gain new clients. But a few things I will tell for sure as follows:
a. You need to network YOU and your business. This includes doing active searches for comp brokers and insurance companies and contacting them outright to introduce you and your business. Please see below, at the bottom of this message, for some companies you might want to contact for possibilities.
For my own transportation business, I literally started by contacting all insurance underwriters in New York who wrote policies for workers comp. Sometimes I got the “run-around” when I called because the person who answered the phone was an entry level operator. But after being persistent, I typically found my way onto the lap of someone who could provide me with more information. And like anything, it was important to talk to many insurance companies. A few will use you, but one or two will use you a lot!
With some underwriters, they told me they would keep us on their list of providers to call when the need arose, but more times than not you rarely, if ever, hear back from them. But ironically enough, there are a few that began contacting us a few times a month and one, the New York State Insurance Fund, began using us all the time. So my point is, you need to be persistent and work to turn over every possible stone. Network yourself and your business.
b. I’m not sure where you’re located and although there exists the need for worker’s comp transportation across the country, wherever people work, workers comp is especially big in the Southeast. Why it is so big down there, I honestly have no idea! But workers comp transportation can be so big that different insurance underwriters will host broker conferences. My advice is to work to find such conferences in your region and visit as a simple attendee so you can learn more about the workers comp industry and market. I guarantee you will walk away from such conferences with a ton of leads and names of comp companies.
c. Whatever you do, ABSOLUTELY AVOID a company called “Black Diamond.” Black Diamond has stiffed many Transportation Providers to the point where they filed for bankruptcy and Providers who were owed thousands of dollars received a few hundred dollars if anything at all. Do not go near anything regarding “Black Diamond” or anything company that could be an division or reformation of their company after they filed for bankruptcy.
3. I think it’s great that you’re working to try and build your workers comp business, but I strongly encourage you NOT to be one dimensional and relying exclusively one workers comp. Doing so can leave you very vulnerable. I definitely encourage you to work to diversify your sources of clientele and streams of income.
In regards to the companies I mentioned previously, please see the following:
I'm interested in a market analysis for the middle (Nashville) to eastern (Johnson City) Tennessee region. We are relocating to the area and would like to have the market analysis done quickly but would like to delay my one on one training until after we move so I can remain totally focused. Is this approach possible ? Thanks for your time and I am eager to get started.
Thank you very much for your great question and interest in enlisting our help. We can definitely start work on your Market Analysis as soon as possible, but honestly, we are currently running at approximately 10 weeks for development due to the volume of ongoing projects in our queue and, simply, the time it takes once we reach the call phase - when we start calling each facility to determine points of contact, level of transportation need, etc.
In regards to delaying the start of One-on-One training, that is not a problem. Just make sure you remain in contact so we can scheduled you when ready. Also, just prior to starting your One-on-One training, we will need you to complete a questionnaire of about 25 questions . This will help us learn more about you and your start point.