Transportation’s Role in Saving Health Care Dollars

Transportation's Role in Saving Health Care Dollars

The United States has initiated sustained efforts to contain health care costs over the last several decades. In understanding what is driving those costs, researchers have identified two activities that make up 58% of health care costs nationwide: hospital-based care (33%) and office-based care (25%). Making an impact in these two cost categories can help drive down health care costs as a whole.

While a complex set of factors play into the cost of hospital- and office-based medical services, three scenarios can be isolated that have a transportation component:

  1. Patients who miss health care appointments because of a lack of transportation
  2. Patients being re-hospitalized because they did not have transportation to their post-hospitalization appointments, during which health care issues could be addressed before they reach the level of requring readmission to the hospital.
  3. Patients using more expensive emergency services (ambulances, emergency departments) for non-emergency conditions because they did not have transportation to less costly primary/preventive care provided in an office setting

Reducing the number of missed appointments

Missing screening, regular, and follow-up medical appointments can lead to many consequences for patients, such as the worsening of one’s illness or condition, the missed opportunity to communicate new symptoms to a health care provider, and limiting options for learning strategies to promote better health. In fact, one study found that missing appointments in the past is a predictor for also missing appointments in the future.

When health care providers do not regularly see patients, especially those with chronic illnesses, they are prevented from gaining a full picture of their patient’s health. In addition, it inhibits them from making an early diagnosis of any new, emerging illnesses or the onset of complications related to the existing illness. 

There are financial consequences for the health care provider and the health care system as a whole as well: missed appointments and the consequent worsening of a patient’s condition may lead to the need for more costly interventions that might have been avoided. 

Although several studies have reported no-show rates from 3 to 80%, they vary broadly among providers and even within an institution’s own departments.  

Health care providers lose revenue for every missed appointment because they are no longer able to provide what would be a billable service to that patient.  While it is difficult to determine the economic repercussions, one estimate suggests that no-shows or last-minute cancellations result in an industry loss of $150 billion per year, compounding at an average rate of $200 per unused timeslot.  In short, if patients are unable to see their health care providers, it creates a domino effect which can create short- and long-term impacts on their health, and health care professionals’ ability to provide care. 

Lowering the rate of re-hospitalizations

In 2011, 3.3 million hospital readmissions cost the U.S. health care system $41.3 billion. The Hospital Readmissions Reduction Program (HRRP), established by the Affordable Care Act, was designed to combat excessive and costly readmissions. As part of the HRRP, the Centers for Medicare and Medicaid bean imposing penalties on hospitals for re-hospitalizations of Medicare patients discharged less than 30 days prior for the same condition. This strategy seemed to show some results from 2010 to 2017, as the readmission rate decreased 7 percent for Medicare patients, from 16.7% in 2010 to 15.7% in 2017.  Based on 2020 readmission rates, 2,545 — or 83% — will face penalties under HRRP in FY 2021 payment penalties, costing hospitals $553 million. [The Advisory Board annually updates the hospital readmission penalties, listed by state and then by hospital system. Kaiser Health News also tracks readmission rates, and has a look-up feature for hospitals.]

The following strategies have been identified as impacting readmission rates; nos. 2 and 4 below have a clear transportation component:

  1. Coaching patients on discharge instructions and self-management
  2. Providing care coordination and care setting transition planning with inpatient and outpatient providers, family  members, follow-up appointments, and transportation to appointments.
  3. Performing medication reconciliation
  4. Tackling the social determinants of health, working with community partners who can provide social, emotional, financial, nutritional, and logistical/transportation support to low-income and socially isolated patients.
  5. Leveraging data identifying higher-risk patients to effectively allocate resources by using demographic, psychographic, and geographic data along with hospital and payer data to detect and manage social, behavioral, and location-based risk factors.

Hopelink Care Mobility Concierge. This video, from a NCMM Health Care Access Grantee, shows how ideas such as a concierge can make a system run more smoothly. 

Transportation Navigators Supporting Patients Post-Hospitalization. This short video from another NCMM Grantee shows how navigator programs can help reduce missed visits. 

Decreasing usage of emergency services for non-emergent conditions

Unnecessary emergency department (ED) visits are costly and consume resources that other individuals with more acute needs may need. In 2017, an estimated $8.3 billion was spent on ED care that could be provided in another location, a significant increase from the $4.4 billion annual cost of such care as identified in a 2010 study. A more recent study correlated patients who miss primary care appointments with increase usage of ED services and hospitalizations.

Unnecessary ED visits generally include visits that could have been handled in a different setting as well as visits that could have been avoided through more appropriate preventive or chronic care. The most common reasons patients may go to the ED relate to access: lack of a relationship with a primary care provider or care team, lack of after-hours or timely access to a provider, or barriers to access such as transportation. Other reasons may be more complex, including inadequate chronic care management or gaps in care coordination among multiple locations of care.

For further investigation . . .

Transportation to Healthcare Destinations

This NCMM white paper outlines the connections between transportation and healthcare, providing context and suggestions that will enable transportation providers to engage in conversations with healthcare agencies and make the case for more collaboration between the two sectors.

Reducing Preventable Emergency Department Utilization and Costs by Using Community Health Workers as Patient Navigators

This study found that the patient navigation intervention was associated with decreased odds of returning to the ED among less frequent PCR-ED users. The savings associated with reduced PCR-ED visits were greater than the cost to implement the navigation program.

Additional resources


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