Transportation Brokerage Services Lower Health Care Costs

Transportation issues can create significant barriers to accessing quality health care.  If you do not have a car, physically cannot drive, or do not have public transportation where you live, getting to the doctor’s office can be difficult.  Although the federal government mandates that state Medicaid programs provide nonemergency medical transportation services to vulnerable populations, providing this service has been costly and inefficient. 

Kim, Norton and Stearns (2009) examine 2 of the 21 states who have begun using transportation brokerage services to cut down on costs and improve quality.  The authors use a difference-in-difference estimation technique, identified through difference in the timing of the transportation brokerage implementation in Georgia and Kentucky.  The authors find the following results after the implementation of transportation brokerage services:

For asthmatic children and diabetic adults, “the increased use of any health care services accompanied with decreased expenditures conditional on any use led to a decrease in total expenditures by $18 per person per month. Compared with average monthly total health care expenditures by study populations, these results imply a 13 percent decrease in total health care expenditures for children with asthma and 4 percent decrease for adults with diabetes.”

Transportation brokerage services increased the probability patients would use outpatient care, but decreased the probability that they would be so sick that they had to be hospitalized. Although these findings are only for two subpopulations, transportation brokerage services may be an attractive means to reduce hospitalizations and health care costs.

  • Kim, Norton and Stearns (2009) “Transportation Brokerage Services and Medicaid Beneficiaries’ Access to Care,” Health Services Research, v44(1):145-161.

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