So, you want to know what it takes to establish and run a successful non-emergency medical transportation (NEMT) business for the long term, but you’re not sure where to start.

In this first of our three-part series, “The Keys to Success,” one of the TP industry’s top performers—with more than 25 years of success and hard-fought experience—offers you some valuable insights into what it took, and takes, to grow a successful business. Our expert successfully navigated the business-building process to the point where he is managing a company with 75 vehicles that does about 1,500 trips a day and has 120 employees.

Here are some of his tips in five key areas:

Insurance
“You really can't afford to not be covered. That's one of the things that can really hurt your business,” he says. “There are two types of insurance: auto and general liability. If you have an accident and you have bodily injury or personal injury, the opposing attorney will always sue you for your max, whether you have a $300,000 or million-dollar policy.”

That’s why he advises to get lower coverage. “Your loss runs are a report on your claim activity,” he says, “and it's very important to understand that the loss run is going to dictate what you're going to pay for insurance next year, or even if you can get insurance.” He continues, “If you have a loss for $300,000, which is the max they can get from you because that's what your insurance covers, you'll still get insurance the next year. It'll be a little higher, but you’ll still get it. If you have a million-dollar loss, its far more difficult to get insurance.”

“Some general liability is cheap, but only covers up to where you drop the client off, right outside the car,” he warns. “It doesn't cover the lift or anything right outside the car. If your client falls by the door of the house, insurance will deny the claim resulting in a potential lawsuit. Be sure you have the correct general liability insurance that covers you from the vehicle all the way to the front door.”

Labor
“Right now it's a very tough market for labor,” he says. “Companies should be doing market research, finding out what the average hourly rate in the area is for drivers.” The danger in overpaying drivers is real, and can have serious implications.

“If you offer $15 an hour and the average is $12, you can’t just say ‘I’m going to change you from $15 to $12, but I'm going to give you more overtime,’ because you’ll be breaking the law.

How about salary? “It’s illegal to pay a driver a salary,” he says. “You must pay them straight time and overtime. If you pay a driver a salary, you open yourself up to a lawsuit.”

Payroll Security
“Your payroll needs to be spot on,” he says. “Let's say you’re paying for direct depositing on Friday. If you ever have to tell your drivers, ‘Something happened to our payroll, you’re not going to get your check until Monday or Tuesday,’ you’re going to lose a good portion of them. They’ll go to another company. I’ve been doing this for 25 years, and I don’t quite understand it, but drivers start thinking that your company is having problems, so they also start thinking they’re going to work for somebody else.” He warns, “Even if it's the payroll company’s fault, you have to have money to cover your payroll, always. That cannot be a problem; you will risk a mass exodus.”

Equipment and Vehicles
“You have to be very careful with the equipment you use: you need to have somebody certify your wheelchair lifts, your stretchers, and if you’re carrying wheelchairs in the vehicle, they have to be certified,” he says. “The equipment you use to tie down cannot be old or used equipment from eBay. All of that stuff has to be in good shape. And if it's not working well, you need to spend the money and replace it.”

Do your due diligence researching potential tax benefits when it is time to upgrade your vehicles. You may be surprised. In his experience… “Purchase, don't lease, your vehicles every three years,” he says. “It will lower your maintenance costs, ensure that you have good-looking vehicles that are clean and operating properly, and you can deduct the whole amount of that purchase from your taxes.”

And one more thing. “A lot of people don’t use Posey Belts, but I recommend them,” he says. “It will save patients from slipping out of their chair while you’re loading them in a vehicle.”


Customer Service
“Customer service has to be a huge thing with you,” says our expert. Not surprising, but what are some of his essential elements of great customer service?

• Good routing management: “Routing is key for you to be efficient and for your drivers to be able to get as many trips as possible in the most efficient way.”
  
  
• Very good dispatchers: “Make sure they have super good customer service skills. You need a person to call everybody that you take, especially the people you take on a regular basis, right before their trip. It helps with your missed trips, it helps with your relationship with the person, and it reduces complaints.”
  
  
• Really good software: “Everybody wants more trips, but if you don’t have the proper structure in place, then you’re not ready for that growth, and you’re setting yourself up for failure.”

Next month we’ll hear from another successful TP and the things that helped them become a top performer. As always, subscribe to the TP-only social channel of your choice to be the first to see the latest news specifically for transportation providers.