How To Start a Medical Transportation Business

Each year, almost four million Americans fail to arrive for their scheduled medical appointments. This huge number has serious consequences that ripple through the economy — patients' health suffers, productivity drops, doctor’s time is wasted and clinics lose money.

But it’s also an opportunity for ambitious entrepreneurs to start a business that helps people get to and from their medical appointments. A medical transportation company can be both profitable and rewarding, and gives you a way to offer a valuable service to vulnerable members of your community.

There’s money to be made in non-emergency medical transportation (NEMT). The US healthcare transportation services market was valued at $15.3 billion in 2021 and has significant growth potential, with the market expected to expand to $24.1 billion by 2028. The NEMT segment of that market is even more promising — forecasted to grow at a CAGR of 9%. 

So how do you launch your own NEMT startup business? In this article we’ll take you through the basics, including what you need to get started, how much you can expect to earn, and what the prospects are for future growth. 

Understanding emergency vs non-emergency transport

Let’s begin by defining what kind of medical transportation business we are talking about: 

1. Emergency medical services (EMS) systems are part of a city or country's public safety network. They are heavily regulated and involve various groups and government agencies working together to handle medical emergencies. 
2. On the other hand, non-emergency medical transportation providers are usually hired by individuals who need reliable transportation to get to and from their medical and other appointments safely and on time. These are important, but not life-threatening trips. 
3. A medical courier transports medications, medical supplies, lab samples for testing, blood products or even organs for transplant.

Starting your own NEMT small business has nothing to do with ambulances rushing to the scene of an accident or to the hospitals, and everything to do with helping people get the best treatment possible. 

What do you need to start a medical transportation business?

NEMT drivers aren't considered medical professionals. You don't need the same certifications as emergency responders, which can be expensive and time-consuming to acquire. 

NEMT drivers only need a valid driver's license and a clean driving record to be considered. 

Once you have those basics covered, then you need to line up this list of essentials: 

• Proper insurance coverage
• Access to medical equipment, such as a stretcher, wheelchair and oxygen tanks
• A wheelchair-accessible van
• A working smartphone
• A first aid certification

What kinds of customers does a medical transportation business serve? 

One of the biggest perks of this kind of business is meeting a wide variety of people. If you like people and want to be of service, you will love this work. 

No one type of person needs help with transport. You can expect to be serving any of the following:

• Elderly people who can't drive themselves
• People with disabilities who have trouble using regular transportation
• Patients recovering from surgery or illness who can't drive
• People without access to a car or public transportation
• Individuals who need special equipment like wheelchair lifts for transport
• People with intellectual and other disabilities, stroke survivors or people with brain injuries 
• People in long term care
• People with dementia 

Safe, reliable, dignified transportation services can provide an invaluable lifeline to many people. It’s a privilege and a responsibility.  

Can I do it alone, or do I need to employ people? 

Starting a non-emergency medical transportation business can be done alone or with a few employees — it all depends on how big and profitable you want your operation to be.

Our advice is to go solo when you’re starting out. A sole proprietorship is an easy business structure to begin with, and you will be the driver, scheduler, and business manager all rolled into one. That way, you can see first-hand the problems and opportunities and find out if you are passionate about this work. 

By taking this approach, you keep your costs low and set your hours. On the downside, it limits how many clients you can serve.

As your business grows, you'll likely need to hire employees. This could include:

• More drivers to handle multiple clients at once
• Office staff to manage schedules and paperwork
• Maintenance workers to keep your motor vehicles in good shape

Having employees allows you to serve more potential customers and make more money. However, it also means more responsibilities like background checks, payroll, training, worker’s compensation and everyday management.

One Reddit user with experience in the NEMT business summed it up this way:

“Finding the right drivers requires thorough interviews to ensure their goals and customer service skills match your company’s standards. The best candidates for NEMT drivers had experience with FedEx routes and Uber, showing the importance of previous relevant experience in the industry.”

The choice of how big you want to be depends on your goals, budget, and how much time you can commit. Many NEMT business owners start alone and gradually add employees as they expand.

But however big you decide to start, getting ahead in medical transportation services starts with a solid business plan. So that’s where we’ll turn in the next section. 

Writing your NEMT business plan

You may be tempted to rush out and start working straight away. But, like any other business, it’s worthwhile to take some time in the beginning to develop a strategy that works. There are plenty of online services to help you draft a business plan, so we won’t go into detail here — just cover the highlights that are specific to NEMT providers. 

Here’s a 10-point checklist for starting your medical transportation business:

1. Learn your local, state, and federal regulations. What you need in Texas may differ from what you need in South Carolina, so do your research about your area before you lay any money down. 
2. Learn about the Americans with Disabilities Act (ADA), especially how it will affect your choice of vehicles. 
3. Study all the ins and outs of billing to an insurance company and how to obtain the necessary licenses. 
4. Make sure you have a working smartphone and a data plan so you can get notifications. 
5. Research the market. You can start by speaking to local nursing homes, private facilities, hospitals, healthcare providers, and other users of medical transport within your proposed service area to determine the need.
6. Check out your competition. How much do they charge, and what do customers say about them? Consider how you will stand out. 
7. Do your homework around the costs of an approved vehicle, and how much it will cost to hire drivers. 
8. Find out how much it will cost to rent office space, and whether you can work from home when you’re starting out.  
9. Get quotes from a few insurance companies about rates for NEMT liability insurance.
10. Find a lawyer and an accountant to help you set things up properly. Ask around your friends and family for recommendations, and look for someone who has experience with similar businesses. 

Armed with this information and a team on your side, you’ve got a much better chance of creating a profitable business. 

Medical transportation business costs and earnings

The next obvious questions are: What does it cost to start, and what will I earn?

It’s hard to predict how much you’ll earn as a medical transportation provider. A lot depends on where you are, how hard you work and your business structure. For example, here are two quotes from contributors to a Reddit discussion who have directly opposing views:

“You know why there's a 'gap in the medical transport market'? The business is brutal, and nearly impossible to get a reasonable ROI.” — OK-Arm-362

“I made $200K with one van and private pay clients in California. Get your butt up and market your business.” — Sure_Philosopher3198

So as you can see, there is money to be made with an NEMT company — but nothing is guaranteed, and you need to do your homework. 

Here are some of the costs and pitfalls to think about:

• Fuel and vehicle maintenance are ongoing and unavoidable costs
• If you decide to hire people, factor in all your payroll costs — including benefits, if you want to hire and keep the best.
• Don’t neglect your marketing costs. 
• NEMT vehicle insurance is a legal requirement, to protect your customers, your employees and your business.

How do NEMT providers get paid?

At this stage, you’re probably wondering, “How does the money actually flow in this business?” It’s a good question. 

There are several ways to get paid as an NEMT business owner:

• Some customers may pay directly — but these are likely to be a minority. 
• Medicaid and Medicare programs often cover NEMT services for eligible patients, meaning you'd be reimbursed by these government healthcare programs. 
• Private insurance companies may also pay for their policyholders who require your services.
• Some hospitals, medical facilities, nursing homes, and assisted living centers may pay directly for transporting their patients or residents. 

Understanding these various payment streams is key to building a sustainable NEMT business and could help you identify which market segments to focus on as you grow your enterprise.

Let’s recap what you need to do

If you’ve read this far, you’re serious about this business.  Awesome! Let’s go over what you need to do.

To start your medical transportation business on the right track, follow these steps:

• Start with market research. 
• Pick a business name that suits the NEMT industry.
• Create a business plan that takes startup costs into account.
• Get all the required business licenses and permits.
• Acquire suitable vehicles and vehicle insurance. 
• Hire and train staff.
• Create a marketing strategy, including a professional website and a way to get referrals. 

Once you’ve done all that, you’re ready to start working. 

Use route planning to provide timely, reliable NEMT services 

Once you start researching NEMT business opportunities, you’ll see a lot of negative comments. Some parts of the industry have a really bad reputation: Drivers are notoriously late, or disinterested, or they arrive at a job high. Too often, NEMT services simply never show up at all! 

That’s awful, and it proves there’s a huge gap in the market for responsible, caring individuals to make money and do good. If you can get it right and provide a reliable, consistent service, you’re likely to win new business through referrals quite easily. 

Being on time is crucial in the NEMT business. Late arrivals can cause patients to miss important medical appointments, leading to health risks and unhappy customers. Route planning software like Routific is a no-brainer: it helps drivers find the quickest routes, avoid traffic jams, and manage multiple pickups efficiently. 

In a competitive market, the reliability that comes from good route planning can set your business apart and help you build a strong reputation. An app like Routific gives you accurate ETAs, and also sends automated notifications so your customers are kept informed. Ultimately, route planning software isn't just about being punctual – it's about providing better service and growing your business.

The rapid growth in non-emergency medical transportation (NEMT) service across the US proves that more and more people need these services. This might be because there are more older people who need help getting to medical appointments, doctors and hospitals are focusing more on preventing health problems, and there's a push to make healthcare easier for everyone to access. That all works in your favor. 

Starting your own business in healthcare transportation is a smart move. It gives you various ways to make money and helps your company take advantage of a growing, necessary sector that is beneficial to a lot of people.