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OCR for page 199
OATS, INC.
COLUMBIA, MISSOIJBI
CASE STUDY
OCR for page 200
OCR for page 201
OATS, INC.
COLUMBIA, MISSOURI
INTRODUCTION
Since 1971, OATS, Inc. has been providing transportation for rural
Missourians, serving 87 of Missouri's 114 counties. The mission of OATS, Inc. is
to "provide reliable transportation for transportation disadvantaged Missourians
so they can live independently in their own communities.") According to the
transit administrator at the Missouri Department of Transportation, "The state
doesn't have any particular formal mandate to get out there and provide
transportation to everybody. So, it's OATS that fills that gap."
MIGHT IGHTS
· Transit synergy of federal, state, and private funding = more
and better service.
· New transit partners provide broad base of support.
· 76,000 volunteer hours worth $534,000 per year.
· 36% local funding with over 200 contracts.
· Entrepreneurial management finds "w~n-win" situations.
With a fleet of more than 300 vehicles, over 400 full- and part-time
employees and paid drivers and more than 1,000 volunteers, it provides public
transportation services and special contract services to 26,298 individuals, and 1.1
million annual one-way trips. Figure 1 is a map of the OATS service area.
The extensive use of volunteers and the creative blending of a wide array of
funding sources have been particularly important contributing factors that have
reduced the level of immobility in rural portions of the state.
LEVERAGING VOLUNTEER RESOURCES
In STY 1996, 1,861 volunteers donated almost 76,000 hours of work devoted
to OATS, an equivalent of 36 full-time employees. OATS maces a substantial
value of $522,576 to its volunteer efforts.2
Each month, all OATS volunteers record time on a form for the following
activities:
Receiving calls from people wanting to ride the bus
Recording ride requests
Reminding people of their rides
1
OCR for page 202
Northwest
\
~h0DAWAY
_ ~
' ~Y
-u ~
~ BULl
~ con
~ - . ~
tern
~ _
West ~ ^~
....
Midwest
Southwest
. , ~
`=o' r
L
r
.
~1
,
"rES
r
YE111~111 ~
"RTON
"SP~
\.
NEWTON
=
Pi
C8UN01
unit .
Figure 1
State of Missouri
OATS Service Area
Northeast
I. Silo cub\
~ ~Home Office
~oAiii If/
aced- , ~ ~ /
i-~ 6 ~ ~
' ~ ~ ~7~ 1 UNCUT ~
AFAR
JQH=ON
HENRY
SAUNE /HOWA~ / / I
~1~ ~1
Fans
. ~
l=ON
ST. CUIR
_
HICKORY
Mar raw ~=
CEDAR
DADE
hWIOCE
"MY
FcW~-( '"=WAY 1:
H~ ~ ~ ~
- ALA _ ~
~ -
CANDY ,
D ~aid
1 _
6R£~E ~1
~ 1 1
.
rare
1 ~
1
2
Mid-Mo
Not included in OATS service area
OCR for page 203
FRANKLIN COUNTY
TRANSPORTATION
COUNCIL (FCTC) - This
is a private not-for-profit
corporation established
in Franklin County
primarily to serve the
transportation needs of
persons with disabilities
in that county, although
services are also open to
the general public. This
corporation has its own
Board, its own
employees, equipment,
and personnel policies
and other policies.
OATS contracts with
FCTC to manage its
operation, employing a
project coordinator who
oversees day-to-day
operations with
management assistance
from the East Area
Manager and home office
staff.
Relaying information to a driver
Attending OATS meetings, including travel time.
Fund raising
· Publicity/Awareness
The service delivery method of providing OATS
door-to-door demand responsive service is fairly
conventional; the means of organizing, scheduling
and dispatching trips is not. OATS volunteers
are responsible for scheduling the trips in their
county.
The backbone of the OATS operation is the
county committees. The members and officers
are volunteers and typically use OATS service
themselves on a regular basis. The committee
members are responsible for preparing monthly
OATS bus schedules, promoting ridership, and
fund raising for matching funds for each vehicle
operating in a cogency. Membership in the county
committee ranges from 10 to 30 members and
committee meetings are open to the general
public.
County committees were established so all local
communities within a county have
representation. They meet monthly, and
interviews with a local committee revealed that
such meetings provide a very important social
function. Members were all senior women,
typical of most county committees and of overall
OATS ridership. Riders regularly promote the
service to other community members and friends.
Because many live in dispersed rural areas, the county committee, and riding the
bus, itself provides important social interaction. Without OATS, several indicated
they would be totally isolated and would not have any independence.
OATS schedules are published quarterly in "The Wheel," the quarterly
newspaper that lists the schedule for a rural county. Figure 2 includes a
representative schedule of a "one-bus" county in rural Morgan County in mid-
Missouri. Each town or area of the county has one or more contact persons, who
schedule trips for riders. The level of service of this schedule is typical, with
intercounty trips between destination points provided once or twice a month. In
town local service is offered once a week. In general, from one to three small
buses or vans operate in a particular county.
There is not a set fare for most OATS services, but OATS passengers can
contribute part or all of the suggested amount posted on the bus.
3
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FIGURE 2
SAMPLE OATS BUS SCEII]:DULE
l MORGAN COINED ll
i
OATS transportation is available to anyone regardless of age or income. To
schedule a ride, call your local contact:
1 1
Town
Contact
Barnett
M. Miller
xxx-~xxx
Gravois M.
J. Balding
Cora Rother
B. Burnam
xxx-xxxx
xxx-~xxx
Stover
xxx-xxxx
Versailles
Peggy Bohlen
E. Harding
L. Loewer
xxx-xxxx
xxx-~x
xxx-xxxx
.
Driver Dyne Akin
Veh. No. 725
1st Mon., 4th Thurs.
Laurie and Gravois to Versailles
2nd Monday
4th Monday
,
Morgan County to Tipton
Morgan County in country
i
1st Tuesday
~ b~ _~S
Florence and Stover to Versailles
Morgan County to Jefferson City
Morgan County to Jefferson City
(includes nutrition)
Morgan County to Columbia
Morgan County to Eldon
Morgan County to Osage Beach
.
Morgan County to Laurie
Morgan County to Sedalia
Versailles in town
2nd Tuesday
_
1st Wed., 3rd Tuesday
2nd Wed., 4th Tuesday
3rd Wednesday
1st Thursday
2nd Thurs., 4th Wed.
3rd Thursday
last Thursday
Friday
Committee Meeting: 3rd Thurs. (odd months) Hunter Civic Center, Versailles
1:00
.
4
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County committees have guidelines such that there must be minimum load
requirements before a trip is made. In general, there must be at least 3 medical
riders or at least 7 shoppers before a trip is made. Table ~ is a summary of the
trip purposes of OATS trips. Essential shopping trips for groceries and other
necessities is the largest trip purpose of OATS riders. According to the OATS
schedule, transportation is provided to and from the senior centers, Monday
through Friday, in a number of areas. The highlight is the daily luncheon meal
served five days a week. Such nutrition trips are the second highest priority.
TABLE 1
OATS TRIP PURPOSE
%of
Trip PurposeOne-Way Trips Total
Essential Shopping ~33S,130 ~ ~:
Nutrition 234,281 20%
Employment 192,333 17%
Medical 18S,393 16%
Business 76,195 7%
Education 61,617 5%
Recreation 34,694 3%
Meal Delivery 26,069 2%
Other ~13,015 ~1%
~ TOTAL ~1,164,727 ~100% ~
Because OATS volunteers raise matching monies for the OATS vehicles in
their area and schedule how the buses will be utilized, there is a strong sense of
ownership over the vehicle and its use. According to a few observers, some
volunteers/riders view the OATS program more like a club, with a desire to serve
-
its own members. OATS management is very clear that OATS is a public
transportation provider, and a diverse set of transportation needs must be met.
The introduction of Medicaid transportation last year is one example of how new
types of riders are changing the fabric of OATS ridership. Many of the Medicaid
passengers are younger with small children and most of the older OATS riders
enjoy having them aboard "their" bus. OATS is addressing the service image issue
as part of the strategic planning effort. One of the objectives of their recently
adopted plan is to "improve OATS' image as a multi-purpose, multi-generational
transportation provider." Another initiative is to recruit volunteers to enhance
diversity
.
5
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The volunteer activities of the county committees are coordinated through
seven area offices. OATS has professional staff who provide support to the volunteer
county committees, direct vehicle use, supervise and train drivers, resolve
complaints, approve schedules, and coordinate information dissemination. Area
Managers are involved in every facet of service delivery in their area, with a real
focus on ensuring that as many transportation needs are met as possible with
available resources.
COORDINATED
TRANSPORTATION
SERVICES (CTS) -
This system operates
within OATS'
Midwest Area and
results from a joint
effort of District Ill
Area Agency on
Aging, OATS and
many t;ransportation
Sunders in a 13-
counly area to
enhance coordination
of transportation
services and maximize
vehicle utilization.
Under this arrange-
ment, a separate nof-
for-profit was
established. OATS'
role in this effort is
one of assisting in
service development
by its involvement on
the Board as well as
being the service
provider for these
services.
1-- 1
1
OATS is governed by a volunteer Board of
Directors who make policy decisions. The Board
consists of two members elected from the service
areas of each of the eight Area Agencies on Aging
served by OATS. A small administrative staff
including the Executive Director, Administrative
Service Director, and Comptroller provide manage-
ment leadership in all facets of the operation.
OATS' unique organizational structure and mode
of operations is a product of its historical
development and funding sources. Founded in
1971 with a small group of volunteers interested
in addressing rural transportation issues, they
received a $30,000 grant from the State Office of
Aging. Open to persons 60 years of age or more,
OATS was first named the Older Adults
Transportation Service. In 1980, they began to
receive Section 18 monies, and opened their doors
to the general public. As its funding base
continued to broaden, so did its scope of services.
Today, OATS has still retained its corporate name,
and its volunteer orientation packet explicitly
states that "OATS is no longer an acronym for
anything." OATS has been very proactive in
responding to transportation needs in order to
fulfill its mission. Its collaborative efforts have
resulted in a very broad funding base, with
literally hundreds of contracts for service. They
are truly the provider of choice for both
individuals and mlmerous social service agencies
in rural Missouri.
OATS' BROAD FUNDING SOURCES AND CONTRACTING ROLES
OATS has done an exemplary job of effectively coordinating a wide variety of
funding sources to meet diverse community transportation needs in a very cost-
effective manner. Several examples of different contracting roles are included as
sidebars throughout the text of this case study. Table 2 provides OATS' revenue
budget for FY 199S, broken down by funding source.
6
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Local Funding Sources
Local funding provides 35.7% of the total budget. OATS has been able to
draw from a wide array of service contracts, local donations, rider contributions
and group travel excursions.
TABLE 2
REVENUE BUDGET FY 1998
. ~
Local Funding Sources Budget Percent
,
Special Billings $1,616,735 24.~%
l
Rider Contributions 369,500 5.7%
Group Travel IS0,500 2.~%
Local Cash 132,375 2.~%
Non-Transit Resource 20,350 0.3%
SUBTOTAL 2,319,460 35.7%
State Funding Sources
Department of Mental Health 205,599 3.2%
MEHTAP'i' 30,012 0.4%
SUBTOTAL 235,611 3.6%
Federal Funding Sources
Area Agency on Agings' 2,643,825 40.6%
.
Section 5311 (Section i8~3) ~i,312,884 ~20.2%
SUBTOTAL 3,956,709 60.8%
,
| TOTAL ~$6,511,740 ~100.0%
`1' Missouri Elderly and Handicapped Transportation Assistance Program
(2) Older Americans Act
(3) Department of Transportation
Service Contracts (Special Billings)
Of particular note is the $~.6 million in "special billings," which represents
almost one-quarter of OATS' total budget. These are funds generated from
contract services provided to groups, organizations, and guaranteed service to
individuals. In general, a simple one-page contract as shown in Appendix A has
been executed between OATS and the group or individual needing transportation
7
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services. Contracts have been executed with a wide variety of different entities
including:
cities and counties for special and general public services
medical centers and HMOs
dialysis clinics
retirement housing
· · .
un~versliles
chambers of commerce
local school districts
· ~ · ~
social service agencies
Medicaid transportation
OATS' contracts all follow a general framework. But a key to their success
has been their ability to be flexible on the terms of services to meet the specific
needs of various groups and individuals. Table 3 provides samples of the type of
different Ems that OATS has negotiated.
TABLE 3
OATS SPECIAL BILLING TERMS
Per hour
Per hour of waiting time
Per hour plus per mile
Per one-way rural trip
Per one-way urban trip
Per one-way in-town trip
Per one-way nutrition trip
Per one-way areawide trip
Per one-way ambulatory trip
Other Local Funding Sources
Per one-way wheelchair trip
Per one-way adjacent county trip
Per one-way beyond adjacent county trip
Per day
Per mile
Per month
Per zone
Coordination cost per vehicle per day
Direct expense reimbursement
Rider contributions are voluntary and account for about 5.6% of the total
operating budget. Local cash is derived from local organizations to help offset
operating expenses. United Way and county commissions are two of the type of
organizations that provide operating assistance. OATS also generates funds from
group travel or recreation trips. These trips are based on the fully allocated costs.
As mentioned previously, volunteers raise matching funds for vehicle
procurements through bake sales, raffles, and other community fund raising
activities. In FY 1996, a total of $64,540 was raised by county committees and
other organizations to provide the matching portion for the vehicles. This was
about one-half of the amount required for local match for vehicle procurements in
1996.
In addition, OATS administers a long-distance recreational charter tour
service. A recent WHEEL insert described five tours to such places as Southern
8
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California and Florida. OATS acts as an agent in arranging the trip itineraries,
meals and accommodations. A tour bus company provides the tour transportation.
In FY 1996, OATS had a net income of $49,132 from the charter tours. The Board
of Directors has designated that charter tour net income be used for financing
OATS' portion of the bus match. Net income from this activity is taxable as
unrelated business income.
State Funding
Direct state funding sources provide just 3.6% of the total OATS budget.
Missouri Elderly and Handicapped Transportation Assistance Program (MEHTAP)
provides state financial assistance for local nonprofit organizations offering
transportation service to the elderly and persons with disabilities at below-cost
rates. OATS receives about $30,012 of this funding. OATS also accesses this
Finding program indirectly through other grantees who contract with OATS.
Contracts with the State Department of Mental Health totalling another
$205,000 annually have been negotiated with the Department of Mental Health to
provide services for primarily developmentally disabled individuals. Separate
contracts have been negotiated with an array of different regional centers.
Federal Funding
CITY OF
CHILLICOTHE, CITY
OF SEDALIA - Both of
these cities established
transportation systems
shortly after federal
funding became available
to provide 50% of the
operating funds for
community transporta-
tion. The City of SedaZia
negotiated with OATS to
take over all phases of
the operation, including
applying for funding and
vehicles. The City of
Sedalia provides local
cash match for opera-
tions as well as
assistance with local
vehicle acquisition
match. The City of
Chillicothe still applies
for its own funding but
contracts with OATS to
deliver the services.
1 1
Slightly over 60% of OATS funding is derived
from federal funding sources. The foundation of
the OATS service is transportation for seniors.
OATS has separate contracts with eight different
Area Agencies on Aging (AAA), which account for
$2.6 million or 42% of OATS total budget. The
contracts for service are with the eight Area
Agencies on Aging, but the primary funding
source is the Older Americans Act, with other
funding for AAA services from Social Services
Block Grants, U.S. Department of Agriculture
Cash and Commodities, and state general
revenue. The only eligibility requirement for
AAA-funded senior transportation is that the
person is 60 years of age or more or between the
ages of 18 and 59 and disabled. For each Area
Agency on Aging, OATS has negotiated different
rates for different type of trips. There are
separate contract rates for nutrition, urban, rural
and areawide trips. In some cases there is a
blended rate, with a hourly rate plus a per mile
charge. In other cases, a specific rate has been
negotiated for a lift ramp vehicle and reserved
trips.
9
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Substitute Auto Trips
If OATS service were not available, approximately 24% of trips would still
be made by automobile, mostly provided by friends and relatives of the OATS
rider. The 276,300 auto trips are estimated to have a value of $2.5 million. This
is based on an average of $9.20 per one-way trip, which includes the allowable {RS
per mileage cost of $0.31 per mile and value of travel time of $10.00 per hour for
the friend and neighbor providing a ride, and includes one hour of waiting time
per round-trip while the OATS rider conducts her business.
Substitute Paratransit Tries
For trips to such destinations as dialysis appointments, trips would be still
ne provided by another transportation provider. It is estimated that
approximately 36% of OATS trips would be made by a substitute transportation
provider and would have a value of $6.6 million. If OATS did not exist, it is likely
that some of OATS' contract services would be provided by other operators. OATS
currently provides transportation at the cost of $5.29 for group transportation. If
OATS did not exist, many of the substitute paratransit trips would be single rider
trips; this has been the case with Medicaid transportation in rural Missouri. For
example, in Springfield, the cost of a one-way trip within town is $19-$40,
depending on whether ambulatory or wheelchair service is provided. Within
Columbia, Medicaid rates are $10-$28 per one-way trip. Service to remote rural
areas is more expensive, an example being $54 to $128 per trip in rural
southeastern Missouri. An average of $19 per one-way trip would appear to be a
reasonable assumption for most substitute paratransit trips in the OATS service
area. Education, employment, and nutrition trips would probably continue to be
group trips; a rate of $~.25 is utilized.
Benefit/Cost Ratio
For every dollar invested in the OATS program, there is an economic benefit
of $2.32. This is deters ined by adding the missing trip value, the auto trip value,
the substitute paratransit trip value, and the value of lost volunteer services,
totaling $13.9 million, and dividing it by OATS' net costs of $6.0 million. Net
costs are OATS total costs minus rider contributions and local cash raised to offset
OATS' costs. A benefit/cost ratio of 2.3 is quite favorable, compared with the
usual criterion of at least a ratio of 1.0 for economically viable projects.
ELEMENTS OF SUCCESS
OATS has demonstrated an entrepreneurial ability to effectively blend a
wide array of different human and monetary resources into an elective and
comprehensive transportation delivery system. Several factors appear to play
important roles in OATS' success:
12
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An entrepreneurial management style within a flexible framework.
Volunteer spirit.
Local control and ownership of scarce resources.
TABLE 5
SUMMARY OF OATS' BENEFITS AND COSTS
1 1 11
Annual value of missing trips$5,286,304
Annual value of auto trips$2,642,118
Annual value of other paratransit$6,68S,331
trips
Annual value of lost volunteer$622,676
services
| Total Annual Benefits | $13,939,330 ||
Costs
Annual operating costs of OATS $6,611,700
Less rider contributions and
local cash 601,876
Total Annual Costs $6,009,916
Ratio of Benefits to Costs 2.32
.
Entrepreneurial and Flexible Management StYle
OATS headquarters staff and the Board of Directors seek every opportunity
to fulfill their mission of providing reliable transportation for transportation
disadvantaged Missourians. Staff is particularly adept at understanding the
transportation needs of individuals and agencies, and working with the entity to
find an approach that will work. There is no "one size fits all" at OATS.
Management is particularly adept at finding "win-win" situations for agencies that
have transportation needs but are not sure how to provide it. OATS is very
flexible on what its role will be and how services will be provided to meet the
needs of a particular agency or individual. Its diverse array of contracts is a
testament to this flexibility and entrepreneurial spirit. This exemplary
management philosophy is very transferrable to other transit agencies in both
rural and urban settings.
Part of this entrepreneurial spirit is a willingness to take risks and to adapt
to changing circumstances. OATS is currently looking at the Welfare to Work
opportunities with the Missouri Department of Transportation. OATS is
13
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evaluating whether or not vanpools might better serve some employment
transportation needs.
Because of their flexibility and consistent and reliable service delivery,
OATS has developed a very positive reputation in Missouri.
MEDICAL
TRANSPORTATION
MANAGEMENT, INC.
(MTM) - MTM is a
management company /
transportation broker for
managed care non-
emergency medical
transportation. OATS is
a transportation service
provider for MTM in all
seven service areas as
we,! as the entity which
brokers such trips in five
of the areas.
the OATS organizational culture.
Volunteer Spirit
The volunteer legacy of OATS is critical to its
success. OATS was founded by volunteers and
the tradition continues. Volunteers from board
members to contact persons all have a pervasive
pride in the community service that OATS
provides. It is quite obvious that the volunteers
give a lot of their time and resources, but receive
back a strong sense of accomplishment. OATS
management engenders this spirit through
specific efforts to enhance volunteer motivation
and recognition, including the sponsorship of
annual areawide meetings to recognize volunteer
efforts. Because of OATS' reputation, it has been
able to attract excellent leadership that continues
the volunteer spirit which is so much a part of
This volunteer spirit also provides political support to keep OATS and its
services moving forward. Every year hundreds of volunteers go to Jefferson City,
the state capital, on their own time and expense to attend a legislative advocacy
day. Volunteers meet with their state representatives and let them know how
important OATS is to them. According to the volunteers, they really look forward
to this annual event and apparently are quite successful in engendering strong
political support for OATS.
Local Control of Scarce Resources
The decentralized decision-making process for the utilization of scarce
resources is very important to OATS' success. The volunteer county committees
and the county contacts play a very important role in operating local services
tailored to local needs while professional transit staff at OATS assure safety and
quality of the service. As OATS broadens its ridership base to a more diverse
population, the challenge will be to broaden the sense of ownership beyond its
traditional senior heritage.
14
OCR for page 215
REFERENCES
1.
2.
OATS, Inc., 1996 Annual Report, Columbia, Missouri (19971.
OATS bases this valuation of most volunteer effort on the salary rates of
office workers, which range from $6.45 to $6.90 per hour depending on the
location. Members of the Board of Directors are valued at the rate of the
Executive Director's salary.
16
.
OCR for page 216
OCR for page 217
APPENDIX A
QUANTIFYING TO BENEFITS OF OATS OPERATIONS
In order to estimate the economic benefits of OATS, the research team asked
the question: What costs would be incurred by OATS users in the absence of the
OATS system? If OATS did not exist, OATS users would either:
1. Not make a desired trip at all because a viable and affordable transportation
alternative is not available or affordable to the user. These "missing trips" have
an economic value because the user is not able to receive a desired or needed
service due to a lack of transportation. A value has been put on these missing
trip based on different trip purposes.
2. Substitute an auto trip for the OATS trip. Most of these trips would be provided
by family members or friends, since most OATS users cannot drive or do not
have access to an automobile. These "auto trips" include the cost of operating
the automobile and the value of the driver's time to make the trip. If OATS were
not available, the OATS user or family/friend would incur the full cost of the
trip. The value of this trip is the sum of these costs.
Utilize another transportation provider to make the desired trip. The
"substitute paratr~nsit trip" is likely, on average to be significantly more
expensive to provide by another transportation provider, given the efficient
means that OATS provides service with volunteer trip scheduling. The value
assigned to OATS services is the cost of the alternative transportation service.
In order to estimate the economic benefits of OATS service, the first step was
to make reasonable estimates of how many of the existing OATS trips would fall
into each of the above three categories. A thorough search of the transportation
literature has revealed no empirical data of follow-up on the travel behavior of
former public transportation riders for any comparable situation of a large transit
service being suddenly discontinued. Therefore, the research team has relied on the
development of a reasonable scenario based on estimates by trip purposes. In order
to recognize the uncertainty of the estimates, a sensitivity analysis has been added
to the end of the Appendix to illustrate the impact of changes of basic assumptions
on the analyses.
Table A provides the key calculations and assumptions made in the analyses.
For missing trips, auto trips, and substitute paratransit trips, an estimate is made
of the percent of trips that might be included by trip purpose. Column a includes
the 1996 one-way trips made by OATS.
A-!
OCR for page 218
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OCR for page 219
Missing Trips
Column b includes an estimate of the percentage of trips that might not be
made if OATS service was not provided. Depending on trip purpose, from 25% to
50% of the trips would be made. For discretionary trips, such as recreation and
business trips, approximately 50% of the trips would not be made. Because many of
the OATS contracts for employment and training trips are for developmentally
disabled individuals, there is a higher probability that family member of alternative
transportation contract arrangements would be made, such that only 25% of these
trips are estimated to be missing trips. Experience with other rural transportation
services has shown that friends, relatives, and volunteers are more likely to
substitute medical trips than for other trip purposes. However, many preventive
care and wellness trips would probably not be made. For medical trips, it was
estimated that 40% of the trips would be missing. The overall average of about 41%
missing trips was far less than the range of 63% to 71% potentially missing trips in
the SEPTA and PDRTA case studies, respectively, where riders were surveyed
about their alternatives to transit.
Column d of Table 4 shows the estimated average cost per trip incurred by
travelers for the trips they would no longer take. For medical trips, the estimate of
$84 per round trip missed is based on an analysis of Medicare claims and payments
in 1993 by Dr. Gregg Meyer of the Uniformed Services Universitv of the Health
~ . . _% . . ~ ~ ~ .
Sciences in ~etnescla, lolls, reported December 18, 1997, by the New England
Journal of Medicine. The resulting value of missed medical trips, $3.2 million, is a
significant fraction of the total value in Column e of Table 4, which highlights the
financial importance of these trips.
For employment trips, assigning an S-hour working day per round trip
multiplied by a low average wage rate of $6/hour gives $48 per round trip. The high
value of missed employment trips, $1. 1 million, marks these trips as next to
medical trips in financial importance. For education trills. the interruption in skill
and Job tramping IS assumed to ctelay getting work or cause interruptions in work
averaging one Year for a fob of $20 000/year which over a 15 rear period at 4%
___= ~ ,~ ~ ,~ ~ T - - 7
. ~ . . ~ . . ~ ~ . · . Me 1 · ~ ~ ~ ~ ~ ~ ~ ~ 1 1
interest (the long-range cost ot capital, neglecting lntlat~on) WOULD oe Ecu ./montn or
$40 per round trip for 2 one-way education trips a day for 20 days per month.
For shopping trips missed, an average value of $4 per round trip in missed
sales or higher prices in shopping is estimated. Similarly for nutrition, restriction
of choice for eating places was estimated to cost $2 per round trip to choose places
more expensive but closer. For missed business trips that would have to be handled
less efficiently by phone or mail, or caused delayed or missed opportunities, an
average cost of $10 per round trip was estimated. The other three categories were
estimated at nominal costs of $2 per round trip, for higher costs of alternatives to
meal delivery, recreational trips, and other trips. The total value for all missing
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OCR for page 220
trips, found by the sum of each trip purpose in column c x column d divided by 2 (to
convert from one-way trips to round trips) is $6,286,306.
Auto Trips
If OATS service were not available, approximately 24% would still be made
by automobile, mostly by friends and relatives of the OATS rider. The average cost
of one-way trips is estimated at $9.20, calculated as follows: an average OATS trin
teng~n or o.u ~ miles x ¢.~ cost per mile for operating a motor vehicle x 1.2 to allow
for the extra mileage involved in pickup and delivery = $2.20/trip; the value of the
driver's time = 5.91 miles/29.5 mph estimated average speed x $10.00 for the
average value of time for a family member or friend taking off work equals $2.00;
one-half hour of wait time for the round-trip for the friend or relative while the
OATS rider conducts her business equals $5.00 for a one-way trip, for a total of
$9.20 per trip. The projected 276,300 auto trips is estimated to have a total
· ~
economic value of $2,542,118.
Substitute Paratransit Trips
For trips to such destinations as dialysis appointments, trips would be still be
provided by another transportation provider. Column j in Table A provides an
estimate of the percentage of substitute paratransit trips by trip purpose and
ranges from 20% for meal delivery trips to 45% for employment trips, heavily
dominated by trips by the developmentally disabled. As shown in column 1, $19 and
$~.25 per trip are utilized per substitute paratransit trip. OATS currently provides
transportation at the cost of $5.29 for group transportation. If OATS did not exist,
many of the substitute paratransit trips would be single rider trips; this has been
the case with Medicaid transportation in rural Missouri. For example, in
Springfield, the cost of a one-way trip within town is $19-$40, depending on
whether ambulator or wheelchair service is provided. Within Columbia, Medicaid
rates are $10-$28 per one-way trip. Service to remote rural areas is more
expensive; an example being $28 per trip in rural southeastern Missouri. An
average of $19 per one-way trip would appear to be a reasonable assumption for
most substitute paratransit trips in the OATS service area. Education,
employment, and nutrition trips would probably continue to be group trips; a rate of
$~.25 is utilized.
Overall, it is estimated that approximately 36% of OATS trips would be made
by a substitute transportation provider and would have a value of $5,58S,331. It is
assumed that OATS is currently charging market rates for its contract services.
Summary of Benefits and Costs
Table B summarizes the estimated benefits and costs for the OATS service.
For every dollar invested in the OATS program, there is an economic benefit of
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OCR for page 221
$2.32. This is determined by adding the missing trip value, the auto trip value, the
substitute paratransit trip value, and the value of lost volunteer services, totaling
$13.9 million, and dividing it by OATS' net costs of $6.0 million. Net costs are
OATS total costs minus rider contributions and local cash raised to offset OATS'
costs. A benefi~/cost ratio of 2.3 is quite favorable, compared with the usual
criterion of at least a ratio of 1.0 for economically viable projects.
~,
TABLE B
SUMMARY OF OATS' BENEFITS AND COSTS
Annual value of missing trips
Annual value of auto trips
Annual value of other paratransit trips
Annual value of lost volunteer services
Total Annual Benefits
Costs
Annual operating costs of OATS
:Less rider contributions and local cash
Total Annual Costs
Ratio of Benefits to Costs
Sensitivity Analysis
$5,286,304
2,542,118
5,588,331
522,576
$13,939,330
$6,511,700
501,875
$6,009,915
2.32
The principle source of uncertainty in the foregoing analysis is the proportion
of missing tried auto tries and substitute caratransit that would occur without
~ · ~ ~ ~ ~ ~ ~ · rat ~ ~ ~ ~ ~ me ~ ~ · I ~ A anew ~ ~
OA1~ "columns a, I,, anal or lame A). the numbers user aPoroxlmate QA1~ scan
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estimates that about ball the services currently provided would be lost if OATS
services were not provided, except that Table A uses less than a 50% missing trips
factor for three urgent types of trip purposes, medical, employment, and education.
Here are three variations of the missing trips factor estimates and their eject on
the benefit/cost ratio:
I. If the missing percentage distribution in column b were cut in half for all trip
purposes (for example, medical trips went from 40% to 20%), and all missing
trips were, instead, provided by substitute paratransit service, the benefit/cost
ratio would increase from 2.32 to 2.41.
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OCR for page 222
2. If the percentage across all trip purposes were equally divided among missing
trips, auto trips, and substitute paratransit trips, the benefit/cost ratio would
only increase from 2.32 to 2.37.
3. If the value of substitute paratransit service were 25% higher at $23.75 per trip,
the benefit/cost ratio increases to 2.39.
The sensitivity analyses indicate that the economic analysis results are not
particularly sensitive to the distribution of trips among the missing trip, auto trip,
and substitute paratransit trip categories. The analysis is also not particularly
sensitive to reasonable (+/- 25%) changes in the value of trips.
A-6
Representative terms from entire chapter:
substitute paratransit
