NEMT Roll up?

January 15, 2025

by a searcher from INSEAD in Oakland, CA, USA

I'm getting interested in the NEMT (non emergency medical transportation) space. Dynamics appear favorable for a roll up strategy. Anyone have experience in this sector and willing to connect? Thanks in advance.

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Reply by a searcher
from University of Maryland at College Park in Havre De Grace, MD 21078, USA

^redacted‌ while you can put heavy mileage on the first line when initially placed in service, generally the operations leader would rotate the vehicles in a way where less mileage is placed on them on a per year basis as they age. The depreciation (unless you do bonus) is generally 5 years but the vehicles can be in service longer or even used as parts vehicles after that point. More mileage also should be indicative of better per trip revenue for ambulances as the loaded mileage usually is reimbursed.

Reply by a searcher
in Amagansett, NY, USA

I also have spent a lot of time here. Agreed, it is hard to find a solid business in the space. I'd look for diversity of revenue, both in payors (broker and private pay facilities) and services (ambulatory, wheelchair, stretcher). I would also look at the quality of revenue growth - I've noticed quite a few businesses in the market where the growth was driven mainly by an increase in payment rates vs. growth in ride volume. Finally, be very cautious on the insurance front. Liability insurance is insanely expensive in a lot of states ($5-10K+ per vehicle annually). You'll want to talk to insurance providers and make sure the go-forward insurance is going to be comparable, and if higher, making sure to capture that additional cost in your CF model. Feel free to shoot me an email if you want to chat further. redacted

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