From reading (Why Red Wyoming Seeks The Regulatory Approach To Air Ambulance Costs) it appears that the laws of economics have been repealed and that the state’s rugged individuals have gone soft on us. But really, it’s just another take on the absurdity of the air ambulance business.
I had to laugh at this passage:
The air ambulance industry has grown steadily in the U.S. from about 1,100 aircraft in 2007 to more than 1,400 in 2018. During that same time, the fleet in Wyoming has grown from three aircraft to 14. [A]n oversupply of helicopters and planes is driving up prices because air bases have high fixed overhead costs. [C]ompanies must pay for aircraft, staffing and technology… before they fly a single patient.
But with the supply of aircraft outpacing demand, each air ambulance is flying fewer patients… So, companies have raised their prices to cover their fixed costs and to seek healthy returns for their investors.
Imagine if there were three gas stations in a town and then there were 14. Would prices go up or down? [Hint: Down.]
But healthcare doesn’t work like that, somehow. Ambulances in general and air ambulances in particular are great examples of why not. In particular, you can’t really refuse to be transported by ambulance and if you have private insurance the ambulance companies can stay out of network and stick you –the consumer– with the bill.
In this case, Wyoming is doing the right thing in trying to socialize the industry by pushing everything into Medicaid. The legislature would be wise to use this as an opportunity to reconsider its opposition to Medicaid expansion, which it has rejected in the past, even it added a hard hearted and counterproductive work requirement.
I first covered the topic in March 2005, the first week I started writing this blog. What I wrote then (Air ambulances: costly, dangerous, slow?) is still worth recalling:
According to today’s Wall St. Journal, not only are air ambulances liable to crash (a crew member who worked 20 hours/week for 20 years would have a 40% chance of being killed), they are often slower than ground ambulances, and are used to transport patients who aren’t that sick.
Of course, there are situations where air ambulances make sense, such as in rural areas. On the other hand, even speedy air ambulances can’t do much about the 10-20 hours waits I mentioned in yesterday’s post on Mass General.
- After 9-year-old Tyler Herman fell and broke his jaw in the wilds of Arizona, doctors at a community hospital decided the boy should fly to Phoenix to undergo plastic surgery for a gash on his face. During the flight he was well enough to sit up and remark on the scenery. Upon arriving in Phoenix, he waited nearly 20 hours to undergo surgery. “We could have driven him there in four hours,” says Sharon Herman, the boy’s mother. Her insurance didn’t cover air transport, leaving the Hermans with a bill for $25,000.
Wyoming is a rural state, and the picture that air ambulances conjure up is people being rescued from car crashes or heart attacks in remote areas. Of course that’s the story the owners of air ambulance services want you to believe. Here’s what the lobbyist in Wyoming says about it:
“How many of these 4,000 people a year [flown by air ambulance] are you willing to tell, ‘Sorry, we decided as a legislature you’re going to have to take ground ambulance?’” Mincer said during a June hearing on the proposal.
Sure enough, in Wyoming the situation now is like it was in Arizona a decade and a half ago. “On-scene trauma responses,” represent just a small portion of the flights. In this case, supply creates its own demand and in many cases a ground ambulance would be a better option.
It’s tempting –but too easy– to place all the blame on private equity investors for the problem. State and federal government, health plans, physicians and even consumers have the power to make it stop.