How air ambulances got so expensive
Air ambulances have become a lucrative business over the last few decades, at patients' expense, fueled by private equity and aided by the industry's relationships with providers, John Hopkins' Marty Makary writes in a new book out today.
Why it matters: The rise of the air ambulance industry has resulted in massive surprise medical bills and a spike in unnecessary use.
- Congress has included air ambulances in its effort to crack down on surprise medical bills, and the industry is fighting to avoid this regulation.
Background: Air ambulances used to be owned and operated by hospitals, which sometimes took financial losses on their helicopter programs.
- But that changed when investors saw a profit opportunity and began buying the ambulance services from hospitals. They then billed patients directly for rides.
By the numbers: Between 2007 and 2016, the average price charged by one air ambulance company for a transport rose from $13,000 to $50,000.
- With this kind of money on the table, the number of air ambulance companies rose by 1,000% between the 1980s and 2017.
People in rural areas are hit the hardest. While some of these transports are necessary and life-saving, many others could be avoided, Makary writes.
- Of the more than half a million ambulance flights a year, 80% aren't emergencies, but rather more like routine transfers.
- To grow their business, companies began paying paramedics, nurses and doctors to become advisers with "informal agreements" to promote the company to emergency personnel and other providers.
The other side: Air ambulances say that they have to charge higher rates to commercially insured patients to make up for lower government rates.
The bottom line: "The air ambulance industry has become big business in America," Makary writes.