Uber and rival Lyft have set their sights on a not-so-hip crowd — elderly passengers needing a ride to a medical appointment.

The ride-hailing companies popular with millennials are making deeper inroads into the healthcare industry with promises to cut costs for providers and trim the amount of missed appointments on the part of patients.

The companies have paired with insurance companies, hospital systems and clinics, after the Centers for Medicare & Medicaid Services last year agreed to cover non-emergency rides for Medicare Advantage plans and promised to further widen the scope of supplemental benefits in 2020.  

The companies are seeing financial benefits as they face bumpy roads to profitability. Enrollment in MA plans, private health insurance for the elderly sold as an alternative to Medicare, may rise to $35 million by 2025 from $22 million last year, according to LEK Consulting.  

“We can drive costs and inefficiencies out of the healthcare system while supporting better health outcomes for patients and health plan members,” Dan Trigub, head of Uber Health, who was hired last year to lead the fast-growing business, told Karma by email.

Over 3.5 million people can’t get to their medical appointments each year due to lack of reliable transportation, with older patients, low-income patients and those with multiple medical conditions being particularly vulnerable. These no-shows can cost a typical hospital an estimated $3 million per year, while an average physician loses $200 per missed appointment.

Closing the medical transportation gap for patients is a key factor to lowering those costs, the ride-sharing companies say.  Still, it’s not a given that insurance companies will be willing to cover the costs of the rides.

With the expansion of MA benefits, insurance companies will have to test whether providing non-emergency rides is necessary for the majority of patients who receive it, says Krisda Chaiyachati, an assistant professor of medicine at the Perelman School of Medicine at the University of Pennsylvania. Measure the overall impact of non-emergency transportation isn’t an exact science.

“The challenge will be identifying who benefits the most, and how long should they be covering these services,” Chaiyachati said. “Ultimately it boils down to value. And from the vantage point of insurers, it will be the benefits to health and long-term costs that matter.”

Launched last year, the Uber Health platform enables care providers to book transportation on behalf of patients up to 30 days in advance, and has more than 1,000 clients so far. The riders don’t need Uber App or a smartphone to use Uber Health, just a phone to receive a text message when the ride arrives.   
This week, the company also announced new partnerships with venture-backed healthtech startup Grand Rounds, which matches patients with specialists and other providers, and Carisk Partners, a specialty risk transfer and coordination company, that will deploy Uber Health’s non-emergency transportation dashboard to schedule medical trips.

The partnership offers “a level of convenience, comfort and reduced stress” for both clients and claims staff who must reschedule missed appointments or make alternate transportation arrangements, Alana Letourneau, senior vice president of clinical strategy at Carisk, said in a statement.

Lyft also is rapidly expanding its services, “reimagining the way healthcare organizations and their patients get around.” Similar to Uber, Lyft’s web-based Concierge feature enables members without smartphones to book rides.  

In the past three years, the company struck deals with nine healthcare systems, including the 141-hospital system Ascension and Denver Health and has partnered with Medicare Advantage plans from BlueCross, BlueShield and Humana. Megan Callahan, Lyft’s vice president of healthcare, last month said the company plans to be working “with the majority of the largest MA plans” by next year.

Uber and Lyft are facing challenges to profitability amid intense competition that puts pressure on prices. Combined, the companies lost $3.8 billion so far this year.

The expansion of the Medicare benefits “clearly opens up an opportunity for these firms to work with healthcare providers as a kind of preferred transportation option that is lower cost than traditional ambulance services for non-emergencies,” said Shauna Brail, an urban studies professor at the University of Toronto.

The companies say savings for providers may be significant. A year-long pilot program, conducted by Lyft at Hennepin Healthcare internal medicine clinics in Minneapolis, reduced no-shows by 27% and increased revenue by an estimated $270,000.  Similarly, Uber helped Boston Medical Center boost patient satisfaction and save $500,000 by replacing shuttle buses between campuses and clinics with Uber Health.