Every year, over 400,000 medical flight evacuations and rescues take place in the United States and each ride can cost up to $25,000. Going by these figures, it is obvious that the market potential is huge. This is a fact that has not gone unnoticed by private equity investors. It is, therefore, no surprise that the country has over 75 medical flight companies that have about 1,500 air ambulances. A big number no doubt but it also means that the market is competed out by these numbers. Now, add the burden of increasing security standards and the profit margins begin thinning significantly.
Medical Safety Standards Constantly Evolve
When you look at the number of medical flight accidents that take place, it is certainly much smaller than the road accidents that we witness every day. That’s because the safety standards of the industry are quite high. The reason behind this is the constantly evolving safety benchmarks laid down by institutions like the Federal Aviation Administration of the country. These agencies make it impossible for medical flight companies to adopt a lax attitude towards safety. They simply cannot fly without following the specified safety standards and defying them or trying to break the rules can result in license suspension, financial penalties and more.
Regulations are an Incentive for Safety
Regulations not only govern safety surrounding the customers, but they also cover the crew members. For instance, any medical flight taking to the skies in the evenings or in a bad light must equip its pilots with night vision technology. Coming to the cost of safety, this is one area where the medical flight industry is left in the lurch. The increasing costs are not given due consideration by the insurance companies forcing the medical flight companies to put the burden of payment on the end consumers.
This week has seen some important developments in the air ambulance industry. However, the news has been a mixed bag of both good and bad. One thing though is for certain, the developments are quite interesting and noteworthy. Here, we have chosen the top three.
The US Government Agrees to Compensate for Destroyed Air Ambulance Helipad
Recently, a helicopter belonging to the United States Defence had destroyed a domestic helipad in the UK. The helipad belonged to Cambridge University Hospitals. The destruction was an inadvertent incident, wherein the structures within the air ambulance helipad were ripped off as the defense helicopter took off. It had left the site not worthy of landing air ambulance vehicles. However, it has now been reported that the United States Government has offered to repair the structures. Most of the air ambulance industry in the UK is charity-based and the steep cost of repairs is certainly a burden.
The US Supreme Court Ruling About Air Ambulance Bills
Texas Supreme Court had ruled that insurance companies were only liable to pay air ambulance service providers a sum that is deemed fair and reasonable when it comes to worker’s compensation cases. The issue had long been a bone of contention in the state. The decision was appealed against and had reached the US Supreme Court. The state’s ruling has now been held up by the top court of the country. The case was primarily fought by PHI Air Medical.
An International Surge in Demand Owing to Rising Pandemic in India
It is a well-known fact that India is struggling to cope up with the rising COVID-19 cases. At the same time, foreign nationals living in the country are looking for an exit. While some of them have already left, the unfortunate few who have contracted the virus are looking at the air ambulance industry to exit the country, leading to high demand.
There have been a lot of developments when it comes to the air ambulance industry in recent times. The most predominant of these changes has been the attempt by the Federal Government of the United States to bring down the surprise billing practices. While the attempt is sure to help the patients, enabling them to use air ambulance services without the worry of payments, there are several issues that will bother the industry in the coming days. With insurance coverage being felt inadequate, the margins of the industry are going to dwindle down drastically. How can the industry adapt? This is the question we try to answer.
Air Ambulance Companies Need the Right Perspective
Most of the air ambulance services in the United States are funded by private equity and the organizations are obviously for-profit. A drastic dip in revenues can mean that a lot of the players will start looking at an exit strategy. However, this can impact the nation adversely as it directly affects the coverage, especially for rural America where healthcare infrastructure is less than adequate. This inadequacy necessitates air ambulance services during emergencies. If air ambulance companies shut down, it could be a fatal problem for this population.
The Need to Work Cohesively by Industry Players
It is time that the major players in the air ambulance industry look at cutting down the costs. One effective way of achieving this is a collaboration between companies. This will necessitate fewer resources as they can be shared. Consequently, the cost burden will be significantly reduced. It is also a time to look at acquiring smaller players who were anyway reeling under competitive pressure. Also, lesser competition means that each player will have a greater piece of the market pie. Profits will, therefore, remain optimum as the economy of scale will kick in.
Countries like the United Kingdom and India are already reeling under the second wave of COVID-19 infections. Nations like Australia and New Zealand are making it tough for people to enter their countries, protecting themselves against a potential spike in virus cases. Whatever said and done, it seems increasingly inevitable that the world, including the United States, will see the second wave of the pandemic. Instead of denying this fact, prudence lies in preparing for it. Air ambulance services are again going to be a big part of tackling this problem.
The Air Ambulance Industry is Better Prepared
The world knows a lot about protecting itself against the Coronavirus today. From the perspective of air ambulance services, the industry as a whole has adopted a sanitization protocol to protect the frontline workers like paramedics and pilots, apart from the patients. In the days to come, the heartlands of the United States are again going to need air ambulance services to get adequate treatment. In this context, it must be noted that the infection hits the older generation the hardest. Much of the rural population in the United States falls under this category.
Children May Be More Vulnerable in the Next Wave
There are at least three new variants of the virus present in the world today. Sadly, it has been witnessed that, in rare cases, even the vaccinated individuals are contracting the virus. Moreover, people do not fear the virus today as much as they did earlier. This has resulted in lax self-sanitization measures. All this could snowball into a huge spike and the air ambulance industry needs to be prepared in case the caseload is very high, especially in the rural United States where the number of hospital beds is still considered inadequate to handle a huge spike in numbers.
The air ambulance industry saw quite a few developments in the recent past. From making the services affordable to ushering in new technology, the space was rife with exciting developments. We take a look at a few of the advances that caught our attention. Read on, to keep up with the latest happenings in the air ambulance industry.
Cost-Effectiveness Becomes the New Mantra of the Air Ambulance Industry
More and more states are allowing air ambulance memberships now. With the pressure on the air ambulance industry to contain costs and the new curbs on surprise billing around the corner, many service providers are now offering membership programs at a very reasonable price. It will be no surprise if the service providers soon start offering privileged services through membership programs to stay competitive and gain customer loyalty.
Norwegian Air Ambulance Acquires New Technology
Technology has been at the forefront of the air ambulance industry. Keeping with the trend, Norway’s national air ambulance service has acquired IV fluid and blood warming devices. The new facility will increase the chances of patient survival and recovery. The device will allow the fluids to be warmed to body temperature before infusion. In essence, people will now be able to get better care en route to hospitals. The national air ambulance of Norway will have this equipment fitted to all its choppers and fixed-wing aircraft.
Military and Air Ambulance Industry May Work Together to Fight COVID-19
Militaries across the globe have a sizeable lineup of helicopters. The air ambulance industry is well equipped to turn them into make-shift medical flights with no structural modifications. An example of this was seen recently in Austria where a military chopper was fitted with a medical kit and a COVID-19 patient was transported using its services. Governments around the world can take a leaf from this effort to fight the pandemic more effectively.
The air ambulance industry, for the most part, had been opposed to the recently passed bill by Congress that seeks to put an end to surprise billing practices. The state governments in the United States have been on a long and hard-fought quest to curb surprise billing practices. However, since the air ambulance industry is protected by federal law, states were helpless in controlling their billing practices. This fact has now changed and brought along new challenges for the air ambulance industry. Most of the players in the medical flight industry are private-equity based and have largely remained out of insurance networks. The new bill can hit them hard.
Effect on the Air Ambulance Industry
Maintaining air ambulance services is no small task. From maintaining the aircraft and hangars to paying off highly experienced and qualified personnel, the costs are high. So far, the costs were covered well as the discretion to bill their services had no curbs. Now, with the new bill, the air ambulance companies will have to make do with what the insurance companies approve. Failing to agree on the pricing will only lead them to an arbitrator whose decision will be final.
What Can the Air Ambulance Industry do?
It goes without saying that profits will dwindle down. However, as most air ambulance companies have already begun doing, it makes sense to join insurance networks. This will ease the payment process. Also, it is time that the industry looks at quality services wherein patients voluntarily opt for their services, even if it means that they will need to pay an out-of-pocket premium. The air ambulance industry now needs to veer its attention towards brand building activities. In this context, it must be noted that the service providers are still not compelled to limit their bills. The only change is that patients will no longer be liable to pay balance bills unless they opt to do so.
A bill concerning the surprise billing practices of the medical flight industry might bring a solution soon. The insurance companies and the medical flight industry have been in the midst of a heavily fought battle around this. Both parties have time and again blamed each other for the high air ambulance bills that patients receive. Such developments have also resulted in bad press for both the players. However, bringing the air ambulance industry to compromise on its billing practices has so far seemed impossible. This is mainly because the states have little control over them and the Federal Government has been sitting over it for quite some time.
The COVID-19 Situation and the Medical Flight Bill
The COVID-19 pandemic had definitely delayed the passage of any bill related to surprise billing practices of the medical flight industry. However, it now seems that it may be passed along with the COVID-19 relief bill. Politicians have intervened to get both parties to find a middle ground, but it has largely been unsuccessful. Both the industries have not budged from their stand but it must be noted that most medical flight service providers have tried to get into insurance networks in recent times.
What Will the Bill Do?
The Federal bill will prohibit medical flight service providers from charging the patients directly for their services in the event that they are out of the patient’s insurance network. This is mainly being done as any patient, during critical times, has no time to contemplate the choices. On the question as to what would happen when a patient wilfully chooses an out-of-network medical flight, he or she might have to pay out of pocket, but there are restrictions. The medical flight service provider can only charge the patient if the patient is given 72 hours to analyze the costs. The patient’s consent to use the services in such instances is also important. If the bill goes through, it could change the landscape of the medical flight industry.
Medical flight maintenance is a systematic process and is guided by the industry best practices and rules that govern the air ambulance industry itself. Then, there is a multitude of aircraft models that demand the maintenance of different degrees. The main difference is rotor-wing and fixed-wing medical flight vehicles. The rotor-wing medical flight services are usually deployed in hard-to-reach situations like rescuing a stranded adventure seeker or a victim of a motor vehicle accident on the highways. The fixed-wing medical flight services, on the other hand, come in handy in long haul flights were the patients need to be carried for hundreds or even a thousand miles. Most medical flight companies maintain a mix of both.
Each Medical Flight Demands a Different Kind of Maintenance
Bell, Airbus, Hawker Jets, King Airs, Cessnas, Lear Jets – the list of aircraft that medical flight service providers maintain is quite huge and each comes with a different need. On top of that, there is a myriad of medical equipment that goes into each of these medical flights such as ventilators, intravenous fluid infusion equipment, ventilators, oxygen cylinders, defibrillators, and many more. Added to this is the decontamination and sanitization protocol over the existing ones due to the COVID-19 pandemic. All this translates to a huge amount of maintenance.
Allied Maintenance is Also a Factor
The hangars, training, and accreditations are just a few of the allied maintenances that come along with medical flight services. Each aspect demands specialized skills. In addition, emergency professionals need to be trained on an ongoing basis to keep up with the latest development in the industry.
All these aspects lead to better care and improved outcomes; however, they come at a cost. This is one of the reasons why medical flight charges are pretty steep, and without insurance, affording such care can be quite difficult.
We have, for long, maintained that the air ambulance industry is extremely vital for the rural communities spread across the length and breadth of the United States. Now, with the flu season right around the corner, the importance of medical flights is even more. Besides, it looks like the COVID-19 pandemic is making a comeback with an increasing number of cases being reported throughout the country. There is no doubt that the population in the rural communities of the country will need special care in the days to come and the air ambulance industry will be the focus.
Air Ambulance Industry is the Bridge Rural America Needs
The onset of flu season may result in a flood of patients surging towards rural hospitals. The problem, however, is that there are not many health care facilities in these areas. Also, the capacity of these facilities to handle the pandemic could be less adequate than what the situation demands. Just think of the demands that a situation like this can place on the already stretched medical staff and resources. The situation can quickly turn chaotic and ultimately, lead to unprecedented tragedies. The time is right to pave way for the air ambulance industry to remain on standby.
How Can the Industry Prepare?
There are two aspects to this question. The first is under the control of the air ambulance industry. This includes setting up isolation pods, keeping resources such as PPEs handy, training the medical staff, etc. In fact, much of the air ambulance industry is already prepared due to the previous surge in COVID-19 cases.
The second part, however, is completely out of the air ambulance industry’s control. It involves money. With the insurance companies continuing to deny coverage for much of what the air ambulance companies quote, the problem is sure to bite the raw wound again.
Sounds a little odd that medical flights are a part of F1 racing, right? Not when you look at it closely. The safety rules surrounding F1 necessitate that any injured driver receives treatment within 20 minutes. However, it is impossible to get treatment at that speed without the involvement of medical flights. In fact, air ambulances are always on standby during the races. Not just that, they are kept ready even during practice sessions. Any time the medical flights are not able to function due to one reason or the other, the race itself is canceled. Such is the importance attached to the availability of quick reach to treatment and air ambulances are a big part of it.
The Recent Unavailability of Medical Flights during Practice Sessions
The practice session was recently canceled at the Nurburgring track. The reason was the inability of medical flights to function due to adverse weather conditions. The track is prone to thick fog during certain times of the year, and this is an obstacle to operate air ambulances. Recently, two practice sessions were abandoned due to this reason. The fans that were there to watch their favorite sports stars were in for a disappointment.
Change in Protocols to Maintain Safety
The third session of the F1 practice session was held with a few changes in the protocol without compromising safety. Land ambulances were kept handy in case of emergencies. They would transport the injured to a certain distance where an air ambulance would be stationed and ready to go to the nearest appropriate facility. The medical flight was parked in a location where the weather conditions were congenial. The entire protocol was designed such that the evacuation would still be possible within 20 minutes. Of course, if the weather clears up, there would not be a need for the new protocol at all.