NEMT Experts Podcast Episode 5: How to Negotiate with your NEMT Broker
Bambi CEO Nirav Chheda interviews NEMT expert Matt Murphy on how to negotiate with your NEMT broker. Matt was a co-founder of Circulation (tech-enable broker acquired by Modivcare) and former VP at Modivcare, the largest NEMT broker company.
See the full interview at: https://youtu.be/0sAUYpnKgGY
Please don't forget to subscribe and like NEMT Experts Podcast: https://www.youtube.com/@bambihealth
Podcast Show Notes:
Key Takeaways
- 1. Preparation
- Understand your costs: Analyze all costs associated with running your NEMT company (insurance, labor, fuel, vehicle costs, etc.). This is absolutely foundational to profitable negotiation.
- Know the market: Identify trip characteristics in your market (distance, urban/rural density, locations of major medical centers). Understand your local or regional broker's knowledge of these details.
- Assess the competition: How many other NEMT companies are competing for the same contracts as you? How does this factor into bargaining power?
- Stage your approach: Don't try to negotiate everything at once. Focus the first meeting on understanding the broker's needs, trip volume, and typical trip characteristics. Don't discuss rates initially.
- Inside vs. Outside the contract: Understand what can be formally negotiated (rates, SLAs) vs. what can only be informally agreed upon (desired trip types).
- Where to compromise: Negotiate the rates most important to you, and be willing to cede on less-profitable trip types if you have the leverage to do so.
- Avoid frequent re-negotiations: Set your rates correctly the first time. Re-negotiations within the first year may make you seem unprofessional or unreliable. Annual reviews or re-negotiations prompted by major market changes in your cost structure are appropriate.
- Software is key: Utilize software to track your trip types and compare them to your negotiated targets.
- Be the squeaky wheel: Stay in close contact with your broker's dispatchers to ensure you receive the agreed-upon mix of trips.
- Hold the broker accountable: Review your trip volume data monthly with the Regional Operations Manager to ensure promises are being kept.
Important Quotes
- "Know how much it costs for you to do business and bring that into every negotiation with your broker." – Matt Murphy
- The biggest reason I see transportation providers fail...is they don't understand the cost structure, and they don't have a good accountant." – Matt Murphy
- "Be aggressive but polite and continue to call the broker day after day." – Matt Murphy
Here are some time-stamped show notes:
00:00 Introduction
01:18 Preparing to negotiate
05:18 Actually negotiating
11:03 Launching after negotiating
13:35 Conclusion
