How to Reduce Costs in Your NEMT Business in 5 Easy Steps

Starting a non-emergency medical transportation (NEMT) business is a great opportunity for entrepreneurs.

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How to Reduce Costs in Your NEMT Business in 5 Easy Steps

Starting a non-emergency medical transportation (NEMT) business is a great opportunity for entrepreneurs looking to make a difference in their community by providing safe, reliable transportation for those in need. However, like any business, running an NEMT service can come with its own set of financial challenges. In this blog, we'll discuss some simple strategies for reducing costs and maximizing profits in your NEMT business.

1. Streamline & automate your operations through technology

One of the most effective ways to reduce costs and free up time to focus on other more time demanding tasks in your NEMT business is to streamline your operations. This can include:

  • Automating tasks through software, such as scheduling and dispatch, to save time and reduce the risk of errors.  
  • Implementing a GPS tracking system for your vehicles can help you optimize routes, have more visibility of your vehicles in real-time, reducing fuel costs and increasing efficiency.
  • Electronic billing can help you to invoice and speed up the payment process, which saves you time and money.  

2. Manage your vehicle fleet

Managing your vehicle fleet is a key aspect of running an NEMT business. Keeping your vehicles well-maintained can help you avoid costly repairs and breakdowns. Additionally, carefully monitoring fuel usage and implementing efficient routing can help you reduce fuel costs.  

  • Optimizing your routes through route optimizations software allows you to plan the most efficient routes for your vehicles, reducing unnecessary dead miles and fuel costs.  
  • Utilizing a fleet fuel card through different discount and reward programs allows you to receive direct rebates on all fuel charges and earn rewards towards future purchases/cashback. Find a program that best suits your fleet size and rewards offerings.

3. Economical ways to purchase vehicles/maintaining vendor relationships

There is no one answer when it comes to purchasing a vehicle for your business. Several factors need to come into consideration depending on the types of vehicles you need, size of your fleet, and your budget.

  • Buying used vehicles is more economical than purchasing brand new ones when considering the purchase price, insurance, and taxes. Be careful to inspect the vehicle and check maintenance history before making a used vehicle purchase.  
  • Leasing a vehicle can be cost-effective in the short, limited period. This can allow for demand to be met, while you grow your fleet with no long-term commitment.  
  • Fleet discounts are a great way to negotiate significant savings when looking into purchasing multiple vehicles at once.  
  • Maintain relationships with car dealerships and mechanic shops. Having this type of network can assist in cost-savings if you exclusively work with those vendors.  

4. Reduce insurance rates for drivers

Insurance is one of the biggest expenses in the NEMT industry. One of the ways to reduce costs is by reducing insurance rates for drivers. This can be done by implementing:

  • Safety measures
  • Driver training
  • Regular vehicle maintenance
  • Implementing a GPS tracking system
  • Ensuring that all drivers have a clean driving record

You may qualify for a better insurance rate when these safety measures are practiced.

5. Train your staff and implement incentives

A well-trained staff is more likely to be engaged and motivated, which can lead to lower absenteeism and turnover rates. In today’s gig economy, it can be tough to keep full time staff and cover the demand. By implementing training practices and incentives for drivers, you can increase performance.

  • Offering bonuses through a scoring system for drivers. These can be done weekly, monthly, or quarterly.  
  • Appreciate your team and gift the drivers a take-out dinner at the end of the week. There are plenty of apps that offer remote gifting options. Small gestures might feel undervalued in monetary terms, but they do well in feeling appreciated which boosts moral in the long run.  
  • Providing training for the drivers with best practices not only benefits the driver and their career, but directly benefits your NEMT business.  

Everyone wants to reduce wait times for patients, cut down on unnecessary expenses, optimize routes, lower turnover rates for drivers, and overall improve the experience of passengers who utilize services. By taking the time to carefully evaluate these 4 categories within your NEMT business, you can ensure long-term success. Look to utilize different offerings within the NEMT sphere that can help gain time and resources within your team. The NEMT industry is growing and so can you.  

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