The United States is a country that takes pride in its capitalistic foundations and private equity is a big part of it. Making America great are the enterprising individuals who have found new business avenues and turned their fortunes. In this context, one questions whether the same outlook must be adopted towards the air ambulance industry. Today, the industry is mostly run by firms that leverage private equity to keep floating. However, that comes as no surprise. The medical flight industry is one that sees high demand. It is natural that businessmen want to invest in it.
Air Ambulance Industry and Rising Costs
While the country has not seen high inflation, air ambulance industry has witnessed a steep rise in its costs – thanks to the ever-evolving safety measures and cost a good deal. In addition, there is the need to keep the staff well trained to tackle new equipments. On top of all that, maintaining high standards is not enough, accreditations that stand as evidence to the quality is essential, which again is a cost. Factors such as these are pushing the prices of medical flight services quite high today, to the extent that – without insurance coverage – they are almost impossible to afford.
Prevalence of Too Many Players in the Air Ambulance Industry
The air ambulance industry today witnesses several new entrants. The existing ones too are expanding at a tremendous pace. All this could be leading to an oversupply. However, oversupply is a two-edged sword. It increases the cost that ‘idle time’ attracts. In turn, this pushes the cost of each unit (read cost of each flight) higher as each unit now has to cover higher costs. This could be compelling the air ambulance industry to charge its customers high prices, something that the insurance industry has not been willing to foot lately.
The expectation is that the oversupply balances itself out eventually as the unprofitable ventures close down, and ultimately, a perfect market condition prevails.
The air ambulance industry has often cited the Airline Deregulation Act whenever questions have been raised against its billing practices. It is obvious that most people are curious about this act that precludes the states from interfering in the matters of the medical flight industry.
The law was originally passed in the year 1978 with the intent of keeping the prices of commercial flights low and to promote a healthy capitalistic competition. Prior to that, the commercial airline industry was seeing a lot of monopolistic moves and the prices were quite high. The Act was quite successful and the primary reason why we see highly competitive prices in the commercial airline market even today.
How did it Affect Air Ambulance Industry?
The credit goes to the air ambulance industry that has successfully argued they too are in the business of commercial flights and, therefore, the states cannot interfere in the matters of their pricing. However, like all industries, there are bad players in the air ambulance industry too. They have leveraged this act to charge incredibly high amounts to the customers. The issue has now catapulted to the extent that it has caught national attention. Some experts believe that strong lobbying of the industry is even influencing federal decision makers.
The Argument against the Air Ambulance Industry
Many believe that air ambulance industry must not be treated as commercial airlines. Instead, medical flights must be treated as public health utilities. Part of the argument is also that the congress – while formulating the act – would not have imagined that the air ambulance industry would interpret it the way it has been at this point. Also, the main intent was to keep the prices competitive and not soaring as is the case today. The air ambulance industry too, on the other hand, has a valid point. It points fingers at the insurance industry, which is known to deny out-of-network coverage.
The huge air ambulance bills are a matter of concern no doubt for citizens of the United States. We present a few options through which this burden can be contained.
Community Partnership with Air Ambulance Companies
It was recently seen that Gulf Shores residents now have access to free air ambulance services. Thanks to the partnership between the county and a large medical flight service provider, they will not have to pay any balance bills going forward. It is an idea that is worth emulation for the rest of the country.
Individual Memberships for Air Ambulance Services
Almost all big air ambulance companies offer membership plans that insulate their customers from balance bills. However, not many people avail this as it is an addition to their medical insurance cost. More importantly, there are not many medical flight provider groups that come together and offer comprehensive coverage.
What can Air Ambulance Companies Do?
There is a part that air ambulance companies too can play. For instance, REVA which is an international air ambulance company recently has increased its affiliations with private insurance companies. This will, in turn, rid the users of the worry of air ambulance costs. Even other providers now are veering this way, and as the web of coverage increases, the end users will benefit hugely.
Federal Intervention is an Option
The federal government has the authority to regulate the air ambulance industry. However, there is stiff opposition to any such move as it lays a huge financial pressure on the industry. It is the move that most state governments like Wyoming are pushing for, but so far, the move has borne no fruits. It is also unlikely that this route is going to be effective in the future.
Any move that brings insurance providers as well as air ambulance industry together is bound to be a success. Unfortunately, however, this is not happening at the present.
Blockchain has been largely associated with cryptocurrencies but what a sizeable number of people do not know is that it has several applications, especially when it comes to security of data and operations. The air ambulance industry can benefit hugely from this technology. It is taking the world by a storm cutting across sectors today.
Cross border transactions, data security, and international regulatory compliance are just some of the areas that blockchain technology can prove of value. In a business world where digital transformation is making big waves, the air ambulance industry cannot afford to remain isolated today. It must actively look towards adopting this technology.
Blockchain makes Cross-Border Air Ambulance Transactions Seamless
Transactions usually take place through a centralized ledger. In other words, the monitoring of financial transactions is done from one central point. The nature of air ambulance business is contrary to this. It is dispersed and depending on one central point is often a hindrance.
Blockchain transforms this process through a decentralized ledger where an immutable record of every change made in the system is maintained. It is unchangeable and transparent. Every time even a small change is made to the ledger, it is immediately recorded. This gives a clear picture of who is responsible for what.
Data Security Made Easy
The inability to make any changes without recording who did it and not being able to change this ‘log’ later is blockchain technology’s biggest strength. Any sensitive data pertaining to business or patients simply cannot be stolen without being noticed. This feature acts as a deterrent to both internal and external parties. Unscrupulous elements would simply not attempt to steal or modify data for their advantage owing to the risk of being recognized.
Features like these and more make blockchain technology one that must be adopted by the air ambulance industry today.