is Home Care?
term "Home Care" is extremely broad and encompassing!
There are a wide variety of levels of care, all of which
require different levels of professional skill and licensing
and registration. Further, each level of care garners
various forms of reimbursement.
of these many variables, each type of home care is quite
literally a different business model! Although we discuss
the transition from one business model to another in
How to Build a Million Dollar Home Care Agency, the
primary strategy that I share is a "Private-Duty" home
care business model.
reason reason why I focus on this particular business
model is because it is strictly Non-Medical, much like
your transportation company. This specific strategy
is most convenient in terms of (1) licensing and registration,
(2) finding, training, and retaining your help, and
most importantly, (3) in aligning and complimenting
your transportation business!
discussed in my manual, there are only 28 states that
require state mandated licensing and registration for
Private-Duty, non-medical home care agencies. And of
these 28, in some states, it's literally harder to license
your dog than your home care agency! Needless to say,
I provide a list of these various states and contact
information from which to request appropriate applications
for license and certification.
How to Build a Million Dollar Home Care Agency offered
in ebook format?
resource is a physical manual that we will ship to your
door via certified mail with the US Postal Service.
What makes How to Build a Million Dollar
Home Care Agency different from other Home Care “How
How to Build
a Million Dollar Home Care Agency is different because
I prepared it with a medical transportation perspective.
Many, many of my clients started with a home care business
and then diversified into the medical transportation
industry and others have done just the opposite.
There is a great deal of synergy between
the two industries, the home care industry and the medical
transportation industry. Both compliment each other.
However, the two businesses have separate and distinct
missions. Therefore, how you meld these two ventures
together can significantly affect your “bottom line.”
When you successfully blend these two services you can
dramatically increase your efficiency and profitability,
strengthen strategic partnerships and opportunities,
and cross promote both services.
long does it take to start a home care agency?
Honestly, this is one of the most attractive
aspects of the home care agency! Because there are very
few barriers to entering this industry, you can literally
start relatively quickly! Especially if you already
own and operate a non-emergency medical transportation
business, you already have a HOT market that you will
be able to leverage for prospective clients. Likewise,
you probably already have a high degree of strategic
partnerships with doctors, hospitals, nursing facilities,
and more; people who can further refer and promote your
home care services.
Slightly more than 50% of the States
require licensing and registration for a non-medical
home care agency. And of these states, in some instances,
it is literally harder to get your pet licensed than
it is to become licensed and registered for your home
care agency! In those states that don’t require licensing,
you can literally start your business as soon as possible.
Just follow the steps for success that I share in How
to Build a Million Dollar Home Care Agency.
much does it cost to start a Home Care Agency?
This is a very good and common question.
Unfortunately, there is no fixed number to share. It
depends on your start point, how big you wish to start,
where you’re located, and more. There are a host of
variables. But the good news is that starting a home
care agency is incredibly cost effective because it
is relatively asset-free. In other words, you don’t
have vehicles or equipment to purchase as you do for
your medical transportation business or other business.
Especially if you already operate a
medical transportation business, starting a home care
agency is very cost effective. You already have an office,
resources, contacts, strategic partnerships and more.
Regardless of your circumstances, starting a home care
agency is relatively low in terms of required capital.
I already own and operate a medical transportation business,
why would I want to start a home care agency?
Well, first and foremost, it is NOT
difficult to start a home care agency – as long as you
know what you’re doing and you strategically diversify
into home care. The last thing you want to do is diversify
into a home care agency only to diminish or reduce the
effectiveness of your transportation business because
you’re not sure of what you’re doing.
Diversifying into the home care agency
can definitely increase the profitability because you’re
literally creating a new business in a growing niche
market. But also, by consolidating the two ventures,
you will increase the profitability of the two entities.
Further, with a home care agency, you can literally
generate money around the clock 24/7. You will have
clients that need help and assistance on the weekends,
in the evenings and throughout the night. Patients requiring
assistance don’t take weekends of holidays off! Rather,
your clients will regularly require your help and assistance.
This demand provides you with around-the-clock money-making
do I find caregivers?
business is only as good as your caregivers. In How
to Build a Million Dollar Home Care Agency I am going
to share with you how and where to find quality caregivers
and helpers as well as how to retain them. Your caregivers
are your most important asset. Needless to say, I’m
going to show you how to find, train, and retain your
staff so that they also become your best sales-reps
and so that they further increase your business.
What is the difference between How
to Build a Million Dollar Medical Transportation Company
and other NEMT resources being sold on the internet?
you’re serious about starting your own Non-Emergency
Medical Transportation Company, then there is no better
foundational resource than “How to Build a Million Dollar
Medical Transportation Company.”
by many as “The Bible” of the industry, since 2004 my
best-selling e-manual has been helping an untold number
of motivated entrepreneurs to start and achieve success
in the NEMT industry.
to Build a Million Dollar Medical Transportation Company”
has been revised several times and will continue to
be revised as new information, rules and regulations,
and opportunities become available.
unlike authors of competing resources eager to make
fast money online, you can rest assured that when you
invest in “How to Build a Million Dollar Medical Transportation
Company” you’re investing in the “right” information,
real information, with time-tested strategies that I’ve
personally used in my own NEMT business!
with a single used vehicle in 1999, I literally built
my NEMT business from the ground up! Within 2 ½ years
I secured my largest contract that sent my competitor’s
heads spinning! Additionally, on two separate occasions,
I secured a total of a 33% increase in Medicaid reimbursement!
rest assured, starting and NEMT business requires far
more than getting a vehicle and simple marketing. In
fact, building my NEMT business was not all successes.
Like any business, I made mistakes and suffered setbacks.
But the good news for you is that in my e-manual and
DVD’s you’re going to learn not only of my successes,
but you’re also going to learn of my failures. Why –
so you don’t have to!
you, I had no ebook or DVD’s. I had no road map or anyone
willing to help and show me the way. As a result, I
literally wasted hundred of thousands of dollars over
the first few years of my business!
I’m very proud to say that I also experienced great
success! But again, like any business, it wasn’t always
problem-free! And as a coach and mentor, I believe it’s
important that I share all aspects of this business,
“the good, the bad, and the ugly!” Doing otherwise would
be, in my opinion, disingenuous.
I am so blessed to continue partnering with, training,
educating, and coaching entrepreneurs both in and out
of the NEMT industry from all over the country, Canada,
and beyond! Just read and listen to some of the many
testimonials featured on many of my websites.
think that you too will be very proud of the continued
accomplishments that my staff, strategic partners and
I continue to create and develop for helping you and
others within our industry. Together, we are creating
a host of industry-related resources designed to help
you start, succeed, and sustain your business long-term!
as you wouldn’t step foot in a plane piloted by a less
than experienced pilot, nor would you take business
advice from someone lacking business sense and experience.
to say, in starting your NEMT business you can rest
assured that you’re learning from someone that has literally
“done it themselves” and is committed to preparing you
for long-term success in our industry.
founder of the United Medical Transportation Providers
Group, we are here to help you elevate your business
and empower you to success.
definitely take your time and read my e-manual “How
to Build a Million Dollar Medical Transportation Company”
several times over. And if you’d like to receive a FREE
copy of this resource, visit me at www.mdtseminar.com
to learn more.
the Medical Transportation Opportunity
we all know, we are currently enduring a struggling
economy that is accompanied by rising inflation and
an unemployment rate that is consistently holding close
to 10%. In such times, there is now, more so than ever
before, more and more people looking to pursue their
entrepreneurial dreams in an effort of creating additional
streams of income.
light of such economic uncertainty, there are two niche
markets that are not only continuing to rise, but are
literally facing an explosion. With the doubling of
the elderly population and the rapid growth of the medical
industry, the demand for transportation will continue
to increase for both niche markets.
and disabled people will be ever more in need of medical
attention and assistance as well as medical transportation
to and from treatments and appointments. Furthermore,
as hospitals continue to increase their outpatient procedures
and treatments, the need for more and more non-emergency
medical transportation services are on the rise all
across the United States and into related industrial
entrepreneurial opportunities in the medical transportation
industry are growing more and more unprecedented and
offering an increase in profitable solutions for many
motivated entrepreneurs. The reason for such profitability
is because the transportation needs of the elderly and
disabled are indeed wide and diverse.
seniors remain ambulatory and in need of only limited
transportation assistance. Although many seniors may
require more time in walking, sometimes with a cane
or walker, they do remain relatively independent in
terms of mobility. However, in time, more and more seniors
and disabled are finding the need for wheelchair and
non-emergency stretcher assistance warranted for both
safety and convenience concerns. Under such circumstances,
non-emergency medical transportation vehicles, also
known as ambulettes or medivans are used to meet the
diverse transportation needs of such clientele.
charged with taking clients to and from medical appointments,
medical transportation companies are finding flourishing
opportunities from both clients and facilities alike
because of their diverse capabilities.
are typically equipped to accommodate a combination
of wheelchair and ambulatory passengers as well as,
in many instances, stretcher transports. With the assistance
of hydraulic lifts mounted either in the rear or on
the side of the vehicle, wheelchair-bound patients are
safely lifted into and securely fastened via securing
devices and a seat belt. These medical transportation
vehicles are very much accommodating and comfortable
for all passengers regardless of physical needs and
transportation is not only limited to ambulettes and
medivans. In many instances, ambulances are also used
to meet the growing non-emergency transportation (NEMT)
typically thought of only in regards to emergency transportation,
are often enlisted to provide non-emergency transports
in areas where there is a lack of adequate medivan services
or areas where there is a failure in understanding of
the convenience and cost-savings abilities of using
many staff, facilities, and organizations fail to understand
the versatility and cost saving opportunities that exist
in using ambulettes versus using an ambulance. Typically,
a NEMT being performed by an ambulette is, on average,
70 - 90 percent cheaper and more cost effective as compared
to an ambulance performing the same transport of equal
distance and dynamics.
cause for this gross disparity in cost can be attributed
to the simple overhead economics. The cost of vehicle,
insurance, training, and equipment for an ambulance
is considerably more as compared to that of an ambulette.
Further an ambulance is always staffed by multiple certified
EMT's; further driving up labor and training costs.
Conversely, an ambulette can be staffed by a single
licensed driver trained only in state and local mandated
transportation requirements. But again, this is only
feasible for NEMT exclusively.
states, counties, facilities, and areas where more and
more ambulettes are being called upon to meet the non-emergency
transportation needs of the growing elderly and disabled,
there is a greater reduction in financial costs to insurance
companies, Medicaid and Social Services, brokers, hospitals,
non for profit organizations, and the like. At a time
when budgetary concerns are being critically tested,
such savings in using more ambulettes for non-emergency
transportation needs is not only sensible and practical,
but it's critical. Rather than reimbursing an ambulance
service thousands of dollars for a single non-emergency
transport, the cost to private-paying clients and facilities
alike for a comparable transport can literally be reduced
to a hundred or so dollars!
to say, as we move forward with ever growing medical
and transportation needs, coupled with changes in health
care practice and policies, the need for practical and
cost effective non-emergency transportation solutions
will become more apparent. The need for safe and adequate
services will increase with a continued attention on
overall cost of delivery of such services, hence, the
growing opportunity of non-emergency transportation
Medicaid and Brokers Influence Your Ability to Start
Your Medical Transportation Business
of the most common misconceptions regarding the non-emergency
medical transportation industry is that you need to
be Medicaid approved in order to operate. This could
not be further from the truth. There are many ambulette
services that only service Private-Pay and contracted
work. In fact, for the first two years of my business,
I was exclusively a Private-Pay transportation provider
until I figured out how to gain my Medicaid Provider
the Social Security Act, the Department of Social Services
is mandated to reimburse medivan services for the non-emergency
medical transportation of approved Medicaid recipients.
However, Medicaid reimbursements rates can vary significantly
not only between states, but between counties. There
is no one single universal rate of reimbursement.
in some counties and regions across the United States,
the Department of Social Services outsources their administrative
responsibility to brokers. Rather than work directly
with transportation providers themselves, the Department
of Social Services will contract with these "middle
men" to reduce the burden and hassle to Social Services.
In turn, these brokers are responsible for organizing,
contracting with, contacting, and coordinating essential
medical transportation for Medicaid recipients.
is typical with any form of brokerage system, the broker
makes money by taking a percentage of each transport.
For example, using fictitious easy numbers, if the Department
of Social Services pays $50 for a one-way wheelchair
transport, the money will go to the broker. The broker
will pay you, the transportation provider, $40 and the
broker keeps $10.
what you do with Medicaid transports, either working
through a broker or Social Services directly, has NO
bearing on what you do with Private-Pay or contracted
work. Once you've gained proper operating authority
within your state, you're technically in business. You
can begin soliciting facilities and customers alike
to meet the transportation needs of Private-Pay clients
as well as begin soliciting and negotiating contracted
or brokers have no ability to grant you operating authority
or have any influence in what you do with Private-Pay
or contracted work. Again, there are many transportation
providers across the country that performs no Medicaid
transports. For them, the Medicaid reimbursement rates
might be too low to make it profitable or they're simply
too busy meeting the needs of their Private-Pay and/or
typically use the analogy of bricks and mortar. Depending
on where you live, either Private-Pay or
will be the bricks of your foundation and the other
will serve as the mortar that keeps generating further
revenue and keeps your vehicles moving. Typically, Private-Pay
clients will yield a higher profit margin. Thus, you
will want to always focus on your Private-Pay clients
and use Medicaid transports to keep your vehicles and
drivers moving and generating additional sources of
Much Is Insurance for Starting Your Medical Transportation
of the most common questions I receive is how much vehicle
insurance costs for a medical transportation company.
Needless to say, there is no one single answer as there
is a host of variable that contribute to the cost of
where you're located does play a big part in the cost
of your premiums. Like all insurance policies, if you're
located in a higher crime area you are definitely subject
to higher premiums.
the amount of coverage you're seeking will have a direct
impact on the cost of premiums. If your medical transportation
company will be servicing Medicaid or Broker contracts
then they will typically insist that you carry a higher
rate of coverage. In such circumstances, you will typically
find yourself seeking greater liability limits as compared
to what you need to service Private Pay clients.
important variable that will determine how much you
pay for vehicle insurance is your level of experience.
Most insurance underwriters want to see your three year
Loss-Run (L/R) Ratio. Your LR Ration is like a financial
report card. It shows how much you paid in vehicle insurance
compared to how much the underwriters paid out in claims.
So, having a good LR Ratio is very important. The fewer
the incidents the more cost effect your insurance premiums!
in talking about Loss Run Ratios another common question
is regarding what if you're a newer business with less
than three years. Yes, you can still get insured but
typically, as can be expected, you can find yourself
paying a little more. I know that's not what any new
entrepreneur wants to hear. But it's the nature of the
beast and you have to look at it from the underwriter's
perspective. Until you've proven yourself to be reliable
in paying, you've proven to have a good safety program
that properly trains and educates your drivers so that
you limit your accidents, you really are a risk! Again,
I know that's not great news for new entrepreneurs just
starting out. But it goes with the territory.
obvious factor determining how much you pay in premiums
is the number of vehicles you are insuring. The more
vehicles you have, the greater the total volume you
pay. However, if you do have a good Loss-Run Ratio you
the more vehicles you are insuring the less you could
be paying per vehicle as compared to if you were insuring
a few vehicles.
the cost of vehicle insurance is a common question,
I am very pleased to share with all of you that there
is strength in numbers. More specifically, with the
United Medical Transportation Providers Group we have
the distinct ability to dramatically reduce member's
insurance premiums. Over the last several months the
UMTPG has been working closely with select brokers and
underwriters to develop a discounted plan exclusively
for UMTPG members. To say that this is a great opportunity
is an understatement. In fact, this is a ground-breaking
opportunity that is literally going to revolutionize
the "bottom line" for NEMT owners around the country!
you haven't yet joined the UMTPG Newsletter, I encourage
you to visit us at www.umtpg.org
and join so that you can stay abreast of the latest
news and info regarding this revolutionary insurance
opportunity among other opportunities.
Your Transportation Business
common mistake that I find with many entrepreneurs both
in the medical transportation industry and other industries
is that they allow others to "own" and dictate their
business. What I mean by this is that some business
owners allow other people or external sources to dictate
their prices and, thus, establish the perceived value
of their products or services.
so as to ensure that you do not misconstrue my message,
I am all for providing great deals and discounts to
your clients! In fact, as many of you have heard me
stress before, especially in the early stages of your
business, the best thing you can do to promote your
business is to literally "give" your business away in
the form of free or discounted transportation! Further,
I always stress that you work to increase the "added
value" to your customers. However, especially in service-based
businesses such as the medical transportation industry,
all too often I witness business owners allowing others
to establish their pricing structure and, thus, defining
the value of their business.
the NEMT industry, it is not uncommon for customers
to haggle prices and for contractors and brokers to
try and dictate your prices. Periodically, you encounter
customers that wish to talk you down in price. In shopping
around for the "best deal" they will call and ask your
prices in advance or they will wait until you have already
provided service and then they will attempt to talk
you down in price.
to say, we are all looking for great deals and we would
all like to spend less money in the process. So understanding
a customer's desire to save money is acceptable. But
our desire to deal with such haggling as business owners
can be bothersome. However, when you're business is
high in added value, reputation, and customer service
you should never be ashamed to stand firm in your pricing
- especially when it risks you not making a profit or
altogether risk losing money!
especially for clients that use your services frequently,
offering discounts is acceptable and even advisable.
However, I can assure you that clients who only base
their decision on price are not "regular" clients that
you wish to retain long-term. Why? Because the moment
they realize a cheaper opportunity, irregardless of
the level of value, they will abandon you without hesitation!
Trust me, it's true and will always be true!
of your business or industry, there is always someone
that has to be the cheapest in price - but that doesn't
mean that it has to be you! In fact, when I see a business
that focuses on being the cheapest in price I can typically
point to three key things such as (1) their clientele
is based exclusively on price and not on quality relationships
or added value, (2) they haven't established or defined
their value, and (3) they, in most instances, don't
understand how to determine or define their costs in
relation to profits.
of any popular name brand product versus generic. How
many times have you seen the same product side by side,
looking almost identical, accomplishing the same mission,
typically made of the same materials and ingredients.
Which one do you always instinctively prefer to go with
- the name brand product. Why? First, you recognize
and have a degree of trust in the name brand product.
Next, because of your recognition and the perceived
value you have in the name brand product, you're willing
to pay more - it "eases" your mind. You rest easier
because you have more confidence in the name brand!
The same holds true with your service. You need to become
the "name brand" service in the minds of your customers.
When you do, price is no longer the deciding factor.
can be notorious for trying to dictate prices to young
medical transportation providers. Some could argue that
their approach can even border on bullying tactics!
Brokers rarely hesitate to tell you what they "will"
pay for various transports. They will insist that you
accept these rates and that they are non-negotiable.
However, trust me, in working with clients from all
across the country I can assure you that when you position
yourself correctly, brokers WILL negotiate! Why, because
it's in their best interest to find and partner with
transportation providers that are going to be around
long-term. In many instances, brokers receive compensation
for every transport performed. Further, brokers do not
wish to waste their time with fly-by-night vendors.
And, in speaking with an inside source in a prominent
brokerage, brokers know which transportation providers
they can "walk over" and with whom they "work with!"
And trust me, they're not the same!
inexperienced entrepreneurs go into business thinking
that all they have to do is "build it and they will
come." Once they build it, they think that all they
have to do is be the cheapest in price and then their
success is guaranteed. In such instances, it typically
is not long before they realize that clients didn't
come and thus, their doors are in the process of closing.
This flawed strategy is common in all businesses regardless
of industry. Needless to say, there are many skills,
tactics, and strategies that need to be implemented
by you, the business owner, to ensure your viability
and success. To be successful, you need more than a
promising opportunity offered at cheap prices. You need
strategic implementation and methodology that ensures
Much Money Should Your Business Be Saving & Investing?
following is a great question that I recently received
regarding investing money and building the net worth
of your business. Because I think that this is a very
important topic that countless entrepreneurs overlook,
let me share with you the following:
Joel, I have some quick questions I am hoping you can
assist me with. My husband and I have been studying
your DVD Series for which we can't express our appreciation
more! They are an invaluable tool for educating and
helping us all in getting started in the industry….My
questions are (1) in saving money and building a portfolio
for our business, how much money should we be saving,
and (2) what are the tax ramifications of saving this
money in our business? Won't this mean that we are showing
a profit and, therefore, make us pay more in taxes?
Thank you again, Joel, for all you do and all of your
great information." Jennifer Holden
thank you very much for your great questions, Jennifer.
The obvious reason why I share them on this post is
because I know for a fact that others have similar thoughts,
questions, and concerns.
as you referenced, I do discuss the importance of saving
money in my DVD Series. There are several reasons why
you should be saving money as I discuss in my information.
But, in looking at the BIG picture, the reason why you
want to save money is because it literally builds the
net worth of your business. More specifically, should
you plan on selling your business in the future for
a nice profit you will literally be able to illustrate
to prospective buyers that you're a profitable business.
Nothing speaks more loudly and profound than cash money!
When you can literally illustrate that your net worth
has grown over the life of your business you just became
instantly "attractive" to prospective buyers. And yes,
you will definitely receive a higher sales price!
what method do you actually use to save money? There
are several. But honestly, I strongly suggest that you
work closely with and consult your financial advisor
and/or accountant. Sit down and discuss the kind of
financial "vehicle" you wish to use to invest money
over time. For my business, we started with a simple
mutual fund account in my company's name. Understanding
my exit strategy, we were aggressive for the first years
in terms of risk level and then we began to gradually
and purposefully become more conservative to limit potential
two primary benefits to saving money and building the
net worth of your business is that, again, you're able
to illustrate to prospective buyers that your business
is profitable. And next, when you actually leave the
business, you leave with a nice "pot of gold!"
terms of how much money you should save, that is a very
complicated answer that is unique to you. It's very
difficult and uncomfortable to offer you specific number
amounts as there is no right or wrong answer. Further,
I don't know the particular dynamics of your business,
your local market, and your financial circumstance.
what I can tell you is that saving money will most likely
be an incremental measure over time. As your business
grows and becomes for profitable you should gradually
and proportionately increase your amount of savings
and investments. Trust me. I know that it is very difficult
to save money while you're working to build your business.
But I can't stress to you enough the need to, once you're
generating positive cash flow, begin saving and investing
money on behalf of your business. Start with $100 a
week. As your business goes, work to gradually expand
and grow to $100 per day and so on and so forth.
are the tax consequences? Well, again, there is no one
single one-size-fits-all answer. There are many variable
and components associated with such a question to include
your type of legal structure, the amount and value of
your assets and much more. In short, yes, if you show
a profit you will be obligated to pay some degree of
tax. But the good news is that with a growing transportation
business you should have asset depreciations costs,
possible tax credits, and more that can help negate
some of your taxes. Again, this is why it's critical
that you align your business with a good financial adviser
and accountant or tax preparer. They can provide you
with much more targeted specifics unique to your business.
let's be realistic. Does paying taxes stink? Heck yeah!
I can assure you that to this day I have never grown
accustomed to it! But regardless, it is necessary and
goes with the territory. Further, showing profits and
paying taxes will actually help keep the IRS off your
back. If you keep showing losses after losses it is
probably only a matter of time before it raises suspicion
with the IRS which can lead to an audit. So is it an
inconvenience? Of course - paying taxes is always an
inconvenience. But conversely, it can actually help
to protect and preserve your business while you're increasing
your net worth.
about this. If you can save a daily average of ONLY
$100, that's roughly $36,000 per year! Over several
years with compounding interest and increasing investment
amounts you will literally walk away from your business
with a nice "pot of gold" in addition to your sales
my biased opinion, if you're business is at least two
years old and you're not able to save and invest at
least $100 per day then your business model IS definitely
broken! And if you do fall into this category, then
it's time for a business "overhaul." You need to study
my DVD's and you NEED to attend my upcoming MDT Boot
Camp Seminar. We will be discussing a great many topics
to include diversification, increasing revenue and opportunity,
and much, much more.
& Equip Your Medical Transportation Business to Deal
launching my "Boot
Camp Seminar DVD Series" I have been receiving
a flood of emails and questions regarding Medicaid and
the whole broker system. Needless to say, the broker
system is a very real "system" that is not going to
go away. Rather, if anything, it is going to continue
is stipulated in Article 1915 of the Social Security
Act, through the Department of Social Services, the
government will reimburse transportation providers for
Non-Emergency Transportation of Medicaid recipients.
However, the reimbursement process can vary significantly
by state, county, and even regional municipalities.
of growing logistical burden between recipients, facilities,
and providers and others, more and more of states and
municipalities are utilizing brokers. In serving as
a "middle-man," these national and regional-based brokers
offer the Department of Social Services a cost-cutting
process that will save the Department considerable money
while overtaking the daily obligations of coordinating
and managing suitable non-emergency transportation for
their Medical recipients. Although this process is well
intentioned, in many instances, for the transportation
providers, this broker system proves to be more harm
is without question that brokers are well funded! In
many instances, individual brokers receive hundreds
of millions of dollars in government sponsored grant
money and revenue. Logisticare, for example, the largest
of all national brokers, boasts annual revenue of half
a BILLION dollars and posted more than 40 million dollars
in performance and payment bonds for various Medicaid
and Managed Care programs. In addition to double digit
profit margins, some brokers such as MTM, Medical Transportation
Management, boast almost 40% return on invested capital.
with such high profits and revenues, overall, a disproportionate
percentage of reimbursement is awarded to transportation
providers. Now, trust me. I am NOT nor will I ever attempt
to play "class warfare" as do many politicians and social
groups. To the contrary, I am a true capitalist and
support everyone's ability to make money and high profits.
However, because I have the pleasure of working with
countless transportation providers across the country,
I witness first hand how brokers strategically and financially
mislead and shortchange providers by encouraging them
to commit to disadvantageous contractual agreements.
In turn, such Agreements lead to limited profit margins,
if any, for the transportation providers which further
leads to inadequate customer service.
please do not gather the impression that I am suggesting
that brokers are "the devil" and that there is some
grand conspiracy to prevent transportation providers
and entrepreneurs from succeeding. However, because
broker's first and foremost priorities are earning reports
and return on investments, as a result, they operate
with extremely "tight fisted" margins with regards transportation
providers reimbursements. However, when dealing with
and negotiating with brokers the old adage "the best
defense is a good offense" is very much appropriate.
And a "good offense" starts with proper education and
new transportation providers or when a new broker enters
the market, a common strategy that I continue to see
all over the country time and time again is brokers
contacting transportation providers with proposed rates
of reimbursement and then encourages the provider to
sign as soon as possible. The broker positions themselves
to appear as though they are doing the transportation
provider a great service. Brokers tell the providers
that they can "start immediately" once they have received
the signed contract.
I cannot tell you how many times I witness this "expeditious"
strategy in working with clients. The more I see it
the more I am beginning to think that all these brokers
operate off of the same "script" or that they maybe
even go to the same sales school or something!
reason why brokers appear to be your friend and act
as though they are doing you a favor by encouraging
you to sign as soon as possible is because they want
to lock you into your rates before you have the ability
to seriously evaluate and analyze the legitimacy of
their proposed rates! They don't want you to seriously
evaluate the profitability or lack thereof of their
proposal, hence, the reason they stress the expeditious
nature and the potential sales volume.
novice transportation providers jump at the first chance
to sign these proposals enticed by what they think are
possibilities! The broker, in typical fashion, will
promise providers that they will send them considerable
business. And many times, when brokers are able to get
these naive transportation providers, they will use
them and send them as much business as possible. Why
- because the proposed rates are always low-balled,
unprofitable transports that provide little to no profit
margin for the transportation providers but healthy
profits for the brokers.
assured, brokers are well experienced and well funded.
Further, brokers are NOT stupid. They are well versed
with the costs associated with supporting logistics
and transportation. And they know when and how to take
advantage of transportation providers. So you might
be asking yourself, why would brokers do this? Why wouldn't
they seek to provide greater, more reasonable rates
of reimbursement to transportation providers so that
providers can be more stable to provide greater, more
reliable and longer lasting service?
there are a few things that you have to consider. First,
when it comes to the brokers, it is all about the numbers.
This is big business and business is a numbers game.
To brokers, it makes more sense for them to low ball
naive transportation providers. It's easier to leverage
small time, mom-and-pop gypsy services. Brokers "gamble"
that those naive enough to accept such nominal rates
of reimbursement will not be around long. Brokers will,
in turn, give these gypsy services what I refer to as
"nickel and dime" transports - short, local transports
that are nominal in cost and reoccurrence yet still
profitable for the broker. When these gypsy services
go out of business because they are not profitable,
brokers have little invested, made a lot of money over
that period of time, and simply await the next gypsy
brokers always tell providers that they do not negotiate
their rates and that everyone is paid the same. Trust
me. This could not be further from the truth! I have
worked with providers in the same region on several
occassions and I can assure you that they are NOT all
receiving the same rates of reimbursement. Further,
yes, brokers do absolutely negotiate when you position
and force them to negotiate!
not only negotiate with legitimate and credible transportation
providers, but with all honesty, they will actually
respect you and treat you more like a legitimate strategic
partner when you reject their proposal and counter with
substantiated and realistic numbers. I stress the word
substantiated because it's important that you demonstrate
that you "know your numbers," the cost and expenses
associated with doing business.
when you engage in legitimate negotiations with brokers
and you demonstrate that you know your numbers not only
do they identify such transportation providers as more
legitimate but they also award such providers with more
regular and profitable transports such as dialysis patients
and distance transports.
you can imagine, negotiating on a serious and legitimate
level does require a great deal of skill and even "guts."
As the old saying goes, you need to "know when to hold
'em, know when to fold 'em, know when to walk away,
and know when to run." Negotiations do require an effective
"poker face." And, it can take serious time. You have
to use skill and be patient to allow things to develop.
I can't tell you how many times I have advised providers
to walk away, end communication, and await for the brokers
to return with a counter offer. With all sincerity,
I can't tell you how many times I have been right and
the broker returns and accepts our counter offers -
further illustrating that yes, brokers DO negotiate!
You just need to know how to position and package yourself
and know your points of leverage.
you are or you're planning on working for a broker,
I welcome the opportunity to assist you in your application
and negotiation process. If you would like to enlist
my help, One-on-One, then visit me at www.milliondollartransportation.com/exclusive_opportunity.html
if you would like to learn even more about the details
of positioning yourself, learning about the Medicaid/brokerage
system, then I would definitely encourage you to invest
in my "Boot
Camp Seminar" DVD Series. This is an outstanding
six (6) disc set that is definitely going to educate
and enlighten you while further teaching you about diversifying
and investing your business horizontally.
versus Low-Fare Subsidized Transportation Services
are a wide variety of government subsidized shuttle
programs servicing cities, communities and even some
rural areas all across the country that charge a very
modest amount of fare. One of the most common questions
I receive is “How can my transportation service compete
with such low fares?”
truth be told, you can’t! There is absolutely NO way
that you can compete with such low fares that can range
from a single to a few dollars per transport. But the
good news is, you don’t have to compete with these low-fare
services because they are NOT your target market!
following are some quick facts about such low-fare,
government subsidized transportation services:
operate shuttle-type minibuses that accommodate both
ambulatory and wheelchair bound passengers
low-fare services operate via fixed route systems,
similar to that of traditional bus lines
that do accommodate personalized pickup locations
require appointments to be made according to the schedule
of the serviced versus that of the client
- Such low-fare
services are strictly curb-to-curb services
passengers riding these low-fare services may receive
assistance getting in and out of the vehicle, no further
assistance is available beyond the vehicle
these services definitely help and service a niche need
within many of our communities, they are, however, very
limited, thus, the reason why these low-fare shuttle
services should not be perceived a competitor or threat
to your NEMT service.
following are just a few facts that demonstrate the
ever increasing need for your medical transportation
business in addition to the limitation of these low-fare
government subsidized shuttle services cannot accommodate
services cannot accommodate patients that require
assistance in regards to mobility and cognizant skills
- Many NEMT
services can accommodate 24-hour transportation needs
to include hospital and emergency room discharges
- NEMT are
typical through-the-door services versus curb-to-curb
like low-fare transportation services
- NEMT services
specialize in direct transportation to and from medical
appointments and destinations with little to no additional
drivers are trained and prepared to offer more individual
customer attention and accommodations as compared
to shuttle drivers
shuttle services typically accept cash or vouchers
only versus NEMT services which can accept various
forms of compensation
- NEMT services
can usually accommodate last minute reservations without
interruptions in service