March 24, 2012

NEMT: Investing in the Non-Emergency Medical Transportation Industry

INVESTING IN NEMT - For anyone looking into possible investment in the Non-Emergency Medical Transportation (NEMT), some of the unique aspects of the industry should be taken into consideration. Specifically, the size and make up of the companies that provide the actual service. NEMT service providers are typically small, independent, privately owned companies that operate within a local market. Take a look through my NEMT Services Directory to see for yourself. One exception to this has been the involvement of EMS/Ambulance companies in the provision of NEMT services in the United States, but that industry itself is going through some major changes.

Two of that industries biggest players, American Medical Response (AMR) and Rural/Metro Corp. have recently been acquired by private equity firms. As a consequence, Rural/Metro is no longer publicly traded, and the same is planned for AMR. One area for public investment in the NEMT Industry that is available, and not only that but growing, is the brokerage part of the industry. NEMT is expensive to operate. There are now, and will continue to be enormous pressures put upon programs such as Medicaid to cut transportation costs. One such development has been the trend towards state Medicaid programs handing over management of NEMT coordination to private companies such as LogistiCare (see below).

Over the next 20 years, as the aging baby boomers enter retirement, the demand for healthcare and other services responding to this changing demographic will greatly increase. NEMT is one of those services poised to benefit from this. Although, what exactly the NEMT industry will be like 20 years from now is uncertain, one thing that is certain is that an increasing number of people will still need some form of specialty transport service to access health and medical services. Other publicly traded companies that service the NEMT industry, such as Stryker and Wabtec, both shown below, are strategically positioned to benefit from these changes.

Providence Service Corporation - Parent company of LogistiCare Solutions, LLC, it provides transportation network management for state Medicaid programs. Founded in 1996, it pioneered the Medicaid brokerage model and remains the biggest player in the NEMT Management industry. LogistiCare was acquired by Providence Service Corporation in 2007. Providence has similar expertise in providing outsourced service of government social service programs. Providence Service Corporation is traded on the NASDAQ (Symbol: PRSC). Read More...

Stryker - Stryker Stretchers are considered by EMS professionals to be among the best in the medical transport industry. Their General Purpose Transport Stretchers are commonly used by NEMT service providers in their ambulettes. From it's beginnings in 1941, Michigan based Stryker has grown into one of the world's leading medical technology companies. They produce a wide variety of health and medical products and operate world wide. Stryker (SYK) is listed on the New York Stock Exchange.

Wabtec Corporation - Parent company of Ricon Corporation, California manufacturer of one of the most commonly used wheelchair lifts in the transportation industry including Personal Mobility, Commercial (such as NEMT), Transit, School Bus, and Rail. There is also a Ricon Europe division. Through Ricon and it's other subsidiaries, Wabtec is involved in a number "value-added, technology based products for Railroad, Transit, and other Global Industies." Wabtec was formed in 1999 from a merger between Westinghouse Air Brake Company and MotivePower Industries, Inc. Wabtec is based in Pennsylvania. It is listed on both the New York Stock Exchange (Symbol: WAB) and on the Berlin Stock Exchange (Symbol: WB2).

See NEMT Business Opportunities to learn more about the NEMT Industry.

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