According to the National Highway Traffic Safety Administration there were just over 6.1 million traffic accidents in the U.S. in 2022, of which 42.8k were fatal. These accidents led to 2.1 million emergency room visits. Globally, the World Health Organization estimates that 1.35 million people are killed on roadways each year, which is approximately 3.7k people every day, making this the leading cause of death for those aged between 5 – 29 years old, and the eighth leading cause of death overall. In 2019, the Lancet tallied the global costs associated with traffic injuries to be $1.8 trillion or 0.12% of global GDP.
With nearly 17k traffic accidents every day in the U.S., the odds that you will be in an accident are estimated to be one in 366 for every 1,000 miles driven according to data from Esurance. In 2018, the Centers for Disease Control and Prevention (CDC) concluded that traffic deaths caused $55 billion in medical and work loss costs.
While there is a debate about the overall benefits (and risks) of autonomous vehicles (AV), it is the potential for meaningful improvement in medical costs and outcomes that the excitement for AVs is building. Ironically, the New York Times last week published research revealing the extent to which “smart cars” are disclosing driver behavior data to insurance companies which is causing unexpected changes to premiums as actual drivers’ risks are better understood.
First, a sense of what is coming. The AV market is simply exploding. According to Market.US, the global AV market will be more than $280 billion in 2024 and assume that fully autonomous vehicles will account for less than 50% of the AV market, suggesting that the driving public will not completely surrender to fully AVs.
Source: Market.US
A comparison with an analysis from Precedence Research suggests that the U.S. market will represent a clear majority of the global marketplace, upwards of ~75%. Interestingly, while estimates vary considerably, the U.S. is thought to have approximately 4.2 million miles of roadway according to research from Statisa. The Smithsonian estimates that there are 40 million miles of roadway globally and that it will increase by 60% by 2050, making for even more traffic chaos and increasing the urgency to address inadequate and unsafe transportation infrastructure.
This is against a broader context that the U.S. population is rapidly aging and is presumably less safe as a driving public…and arguably even more dependent on reliable transportation services. By 2030, roughly 50% of the Medicare-eligible population will be 75 or older. Pressure to move care services to the home coupled with dramatic issues with labor shortages, AVs offer potentially a more elegant alternative to affordably connect patients with providers. Additionally, significant operational efficiencies may be realized with broad adoption of AVs, particularly with delivery drones and robots.
The impact of AVs will be multi-faceted and complex, likely with both positive and negative unintended consequences (hopefully, far fewer animals will be hit by cars which is estimated to be a staggering one to two million every year according to the National Highway Traffic Safety Administration (NHTSA)). Numerous unanswered questions abound: who owns the liability for those presumably rare accidents, how is the algorithm going to pick between two bad choices (hit the parked school bus or the person who stepped into the crosswalk?), what happens to the $350 billion U.S. auto insurance market, will those decisions be uniform across manufacturers, will there be more or less emissions, etc.
Arguably, there are at least several dimensions to be considered when looking at the impact on healthcare such as more intelligent transportation infrastructure, overall access and safety, public land use, and general environmental impact. This is an important theme for our firm as Flare Capital invested in Circulation, which partnered with Uber and Lyft to provide non-emergent medical transportation services.
With broad adoption of AVs, one might expect fewer traffic fatalities but that could be offset with increased miles driven associated with greater ease of use and lower overall costs of ownership (moving from a fully owned vehicle to an as needed, per trip basis). This is to say nothing about improved access to the healthcare system with an intelligent, always-on transportation ecosystem.
A clear public health benefit will be more effective use of public spaces as infrastructure such as roadways and parking garages will be better utilized and less critical in an always-on, shared AV marketplace. The Parking Reform Network estimates that cars in the U.S. are used less than 5% of the time, suggesting shared AVs would dramatically reduce the need for each of us to have dedicated owned vehicles. The Earth Institute at Columbia University concluded that automobile usage will increase to 75% with board AV adoption. This also suggests much of the urban parking infrastructure could be repurposed for more appropriate uses such as public housing and open spaces.
Less clear are the environmental impacts. Broad deployment of AVs may cannibalize traditional mass transit systems, therefore increasing the amount of travel activity and emissions, which would have an obvious impact on overall public health.
There is a rather morbid implication with broader AV adoption: reduction in organ donations. According to the NHTSA, nearly 95% of all traffic accidents are caused by human error, including drunk driving, being otherwise distracted or tired, and just plain reckless. Per data from the National Foundation for Transplants, in 2021 there were 34.8k organ transplants – nearly equivalent to fatal traffic accidents – with sadly 106.6k people on various organ waiting lists. Wait times for a heart is estimated to be 191 days, which will materially stretch out with far fewer traffic accidents.
The most broken law in the U.S. is speeding. The NHTSA determined that there were 112k speeding violations issued every day, with the highest percentage being those in Virginia at 17.7% getting at least one ticket in 2020. On average, 10.5% of Americans have received at least one speeding ticket, while 78% of those in a NHTSA survey confessed to “occasionally” speeding.
A clear benefit to AV adoption will be (hopefully) a dramatic reduction in roadside billboards advertising for lawyers to assist you in the event of traffic accidents. That will most definitely be an improvement to public health.
On the Flying Bridge 