Uber is partnering with American Logistics Company in a play for the Medicare Advantage market (UBER)

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Uber Health’s partnership with California-based transportation management company American Logistics Company (ALC) — which Uber says will improve the health outcomes of millions of patients — is the latest sign that the ride-hailing giant’s invigorated healthcare efforts are paying off since bulking up its health team: Uber made several high-profile talent acquisitions as it’s built out its healthcare arm, including poaching its head of Uber Health Dan Trigub from rival Lyft.

Here’s what it means: Uber Health is revving up in its race against Lyft to secure big payer partnerships in the nonemergency medical transport (NEMT) space.

Uber Health’s tie-up with ALC marks its first national partnership with a healthcare transportation firm. ALC provides transportation management services to CareMore Health, an Anthem subsidiary that manages Medicare Advantage (MA) and Medicaid populations in select states and covers approximately 150,000 patients. Its relationship with ALC and CareMore could pave the way for a greater number of similar healthcare deals in the future.
But Uber will need to chase down more insurance partnerships if it wants to keep up with Lyft’s healthcare efforts. Uber has yet to ink a direct partnership with a major insurer, despite big moves from its competitor, Lyft. Earlier this year, we covered Lyft’s partnerships with two massive US insurers, Blue Cross Blue Shield and Humana, to offer NEMT to MA members. As part of its big insurance play, Lyft also announced that it would provide automated phone calls for users without a smart phone: At the time, we predicted this could help the company curry favor with MA payers and their enrollees, who are over the age of 65 and may not have access to smartphones.

The bigger picture: The growth of MA plans offers an appealing entry point for transportation companies looking to stake a claim in the lucrative healthcare transportation market.

MA plans tend to cover more nonclinical health services than traditional insurance plans — making the space a prime target for nontraditional entrants like Uber. Insurers have a vested interest in providing better NEMT services to members: Gaps in transportation access lead to approximately 6 million missed medical appointments in the US each year and disproportionately affects seniors, per PwC. And ensuring older consumers make it to their regularly scheduled appointments could help improve payers’ bottom lines, considering US consumers over 65 are 15% of the population, but they account for 34% of healthcare costs.
But the transportation company that lands partnerships with one of the top three MA payers — Aetna, Humana, and UnitedHealthcare — will likely come to dominate the NEMT space. MA plans have grown steadily by about 7% per year since 2014 — and the market isn’t expected to slow down anytime soon: 70% of all Medicare beneficiaries are expected to be covered under MA plans by 2030 — up from 35% in 2018, per LEK Consulting. This translates to a market with a projected value over $31 billion by 2026, according to Zion Market Research. And because new MA enrollees are largely going to Aetna, Humana, and UnitedHealthcare, this could become somewhat of a winner-takes-all scenario for the transportation firm that’s best able to secure and maintain big insurer partnerships.

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