It’s a release secret among Americans that calling for an ambulance is a financial risk. According to one study, 71 percent of all ambulance providers do not take the patient’s insurance. That same study found that 79 percent of patients who took an ambulance could get a surprise bill with an average total, around 450 dollars. And when nearly four in 10 Americans would have to borrow money to cover a surprise 1000 dollar emergency, these surprise bills can be a huge problem. The Covid-19 pandemic has exposed wide inequities throughout the American healthcare system and like the rest of the health care industry. Ambulance operators are feeling intense financial pressure from the crisis. So why are ambulance services so expensive in the United States and what’s being done to solve the problem? There’s abroad price range for emergency medical services in the United States.

The U.S. Government Accountability Office, or the GAO, found that in 2010, the median cost per ground ambulance transport was 429dollars, ranging from 224 dollars to 2,204dollars per transport. And that price cans vary lot by state. In 2016, the average price of an emergency ground ambulance in Georgia was 824. Twenty four dollars in New York. It was 752 dollars, 930dollars, in Texas and 557 dollars in Florida. Even within the same state, the charges can vary widely. Take Florida, for example, in Lake City, Florida. The average charge for an emergency ground transport with basic life support services was 463 dollars in Tallahassee, two hours west of Lake City, the average charge was more than 200 dollars higher at680 dollars. In Miami, the average charge was 630 dollars and Tampa’s average was590 dollars.

A variety of factors contribute to this disparity in price, including the type of ambulance used, the medical services rendered, how far the patient was transported, the state and city the ride was taken and whether the ambulance service was publicly or privately funded. There are many types of organizational structures when it comes to running an emergency medical service. They could be privately run or funded by the municipality and working conjunction with other entities such as the fire department. They can also bee volunteer organization that’s funded through private donations and grants. Art Cooke and David Sloan work at Westfield Volunteer Rescue Squad in Westfield, New Jersey. The rescue squad is funded completely by grants and donations from residents and businesses in the town, so there’s no out-of-pocket charge at the point of use.

We’re lucky that we live-in a very generous and affluent community, so we don’t generally have difficulty raising the funds. Because all of the rescue squads, dispatchers and EMT are volunteers, the organization can operate without high staffing costs. As with any labor-intensive of organization, your highest cost is going to be payroll. Supporting a non-profit ambulance provider through donations can be tough for less affluent areas, as well as dense urban areas with high call volumes. If a less affluent town were not able to meet the fund requirements for that individual rescue squad to be able to supply their ambulances, or if they have a problem getting volunteers to be able to operate that system, each town, we would look for an alternative to be able to ride the ambulance service. More often than not, that either becomes contracting with a private ambulance service, which is a castor hiring E.M.S. personnel under the auspices of air, police, or fire department.

Many patients who get surprise ambulance bills can trace them back to for-profit profit companies. My name is Karan Chabra. I’m a resident in the Department of Surgery at Brigham and Women’s Hospital. Surprise medical bills happen when you get medical care from somebody who you were unable to choose and that person or that provider doesn’t take your insurance. So in those situations, if they don’t participate in your insurance plan, they can charge you whatever they want to be paid. Dr. Chabra and his colleagues recently released a study that evaluated insurance claims from a large national insurance plan focusing on the year’s between2013 and 2017.

The data couldn’t tell them how many patients actually received surprise bills. Just how many could have if the ambulance provider decided to bill them for what the insurance company didn’t pay. They found the average patient could be charged 450 dollars per ground ambulance ride after the average insurance payout. Contrast that to the potential surprise bill for an air ambulance, which came in at a staggering $21,700fifty-five dollars per ride. Ground ambulances usually get the focus when it comes to surprise billing, even though they cost less than air ambulances. That’s likely because ground ambulance rides are 55 times more common than air ambulances. Chabra’s analysis found that potential surprise bills for ground ambulances over the four year period he studied would add up to more out-of-pocket costs overall than air ambulances.

Despite being less common, air ambulance billings are trending upward. Chabra’s study notes that potential out of pocket air ambulance fees are catching up with a 15 percent annual increase in potential surprise billings for air ambulances between 2013 and 2017. One of the arguments about why there is more air transport these days for medical reasons is that rural hospitals are closing. But we found, in fact, that there’s a lot in metropolitan areas. Some would say the traffic has gotten bad and so we need to even transport people locally in a highly concentrated, populated area. So whatever reasons, there’s a lot of work going on all over and all kinds of areas.

One reason for this spike could be the air ambulance industry shifting more toward a for-profit model. Between 2012 and 2017, more than 100 new helicopter bases were added, some of those in areas where there already were services. So they are duplicating services, not responding to higher demand. When air ambulances first started to be used in New Jersey, they were run by the state police and didn’t charge frothier services. Now there are also competing private air ambulance services that are generally affiliated with hospitals. And in a non-malfunctioning market, this would work if there were more suppliers present in the market than prices should go down. But the problem is that people in medical emergencies don’t get to choose their ambulance provider. The ambulance providers dispatch by 911 operators. And since they don’t have to declare insurance by law, they can charge you whatever they want. So there is no price competition.

There’s no pressure driving down prices. In some cases, there’s been an argument over whether patients’ medical issues were urgent enough to warrant the use of air transport. Some of the consumers that we interviewed felt that they had been unnecessarily transported by helicopter when they really didn’t need to be. It was an urgent situation, but they felt that by the time the copter landed and picked them up and got them to the hospital, they could have even more quickly gotten thereby ground transport. So it’s very hard for consumers to know was it really necessary or not? And often that’s a fight with insurance companies. Was it medically necessary?

There is a big problem outside emergency medical services which are so expensive to operate. The amount of revenue that’s generated from even the most efficient ambulance systems is limited by the fact that if you want that ambulance in your community to be available for you when you need it, that means they can only really be doing ambulance calls about half the time at best. But not much data is available about how much ambulance services cost to operate. Asbel Montes is the senior vice president of strategic initiatives for Acadian Ambulance Service, as well as the chairman of the Payment Reform Committee for the American Ambulance Association. We are one of the last industries to do any type of cost data collection or what most people refer to as cost reporting, and that is something that we have advocated for as an industry.

We do not have mechanism like hospitals and any others that actually have to do cost reports to validate the Medicare payment system, which is not we do not have that data yet. The GAO and the nonpartisan Medicare Payment Advisory Commission, or Med PAC, do collect some data regarding reimbursement rates for E.M.S. providers. But those within the industry say the reports do not accurately estimate costs of service. The lack of comprehensive data also leaves some consumer advocates. The question is what is the real cost of providing this service? And are people price gouging? Are some of these companies price gouging? Because of the private equity control of many of these companies? We really don’t have the data on what it really costs. How much is profit? How much is surplus? How much are unnecessary rides? They’re just building up more and more supply than they really need to. So there’s a lot of information lacking s till. So in-network many private insurance companies consider most E.M.S. providers out of network.

This means the two entities do not have a predetermined agreement about how much the service costs. The way reimbursement set up right now, it’s often more profitable to these ambulance companies to avoid contracting with the insurance companies. It’s more profitable to stay out-of-network. So why would they bother, you know, writing a contract? The American Ambulance Association does not believe the concept of in-network or out-of-network should apply to emergency medical services. There’s really no such thing as an out of network 911 provider. You might be the city of – and I’m just going to throw out a name here – the city of Houston, who provides their own E.M.S. services.

If you as a citizen do not have a choice in whom, your 911provider that is set by the mayor of that city and the city council saying we, the City of Houston is the one that provides 911 services. How is that out of network? So the issue there that we’ve got going on is the insurance company is denying it wrong, saying the city of Houston does not want to be in our network. And so they’re out of network. No, the issue is you don’t like the rate that the City of Houston is charging. In addition to private insurers not paying the entire cost of the bill, government-funded insurance plans such as Medicare and Medicaid don’t cover the entire cost of the service either. A report conducted by the Moran Company contracted by the American Ambulance Association concluded that E.M.S. providers lost money from Medicare and Medicaid rides. That did conclude that we were being reimbursed below costs for Medicare and then Medicaid, remember, actually reimburses less than Medicare does.

We often hear that. That there’s cost-shifting, that much more has tube charged as private pay or even uninsured people, because the reimbursements either from insurers, Medicare or Medicaid are insufficient. And we haven’t really found the evidence for that to be valid. So how much should ambulances cost patients out of pocket? The main reason we have out-of-pocket costs for any health care is that we don’t use health care without some rationale.

So we want to discourage things like calling an ambulance for routine stomachache. So the out-of-pocket costs for anything should be just enough to discourage people from overusing ambulance services. But not so high that they discourage appropriate use or they make people go broke. And the problem is, as you balance this out so that the patients don’t get hit with a three thousand dollar bill. But at the same time, you want to also have some controls overutilization. So while you don’t want bills that are going to bankrupt people, preferably some kind of payment at the point of service, which discourages people from utilizing an ambulance when they don’t really need one. There are some countries that do maintain low out-of-pocket costs for ambulance services. Take Australia, for example. Ambulance fees do vary in Australia from no out-of-pocket costs to more than 1000 Australian dollars in certain regions.

In some of the Australian states and territories where there are no out-of-pocket costs, many residents call for ambulances without actually having an emergency. Because this puts a strain on the system Australia runs a public education campaign urging people not to call an ambulance if it isn’t an emergency. Triple zero ambulance emergencies. I think I’ve sprained my wrist I’ve had a cold for three days now last year. Ambulance Tasmania received too many trivial triple zero colds that could take us away from real emergencies. Save triple zero for saving lives. Rational people behave in rational ways. If you’re poor and you can either have to call an Uber and pay for the Uber at the point service or you call the ambulance not to pay at all, people call the ambulance because that’s perfectly rational. Despite there being agreement on both sides of the aisle that this is an issue, it’s been difficult to make progression legislation.

It’s been a completely bipartisan issue. There have been proposals that have been agreed upon by both Democrats and Republicans in both the Senate and the House. Remarkably, the Congress and the president agreed on this as well. Congress has taken some steps toward collecting more cost data for the industry in order to better understand reimbursement rates. The Bipartisan Budget Act of 2018 did actually mandate a cost data collection provision to start this calendar year for the ambulance industry over a four year period. They will basically mandate every ambulance provider and supplier that bills the Medicaid program will have to, at a minimum of one time report their data. And they will do an analysis all on this system from all of the rates that we get paid based upon the different organizational types to understand where are we being paid inappropriately.

The legislation authorizes what is known as extended payments for ambulance services. These are Medicare add-ons that increase the payments depending on the area the providers are servicing. Basically, Congress this time said we want data from your industry. You keep telling guys based upon the GAO reports, themed PAC reports that we are underfunded and our you’re reimbursing it under cost. Well, in order for us to give any more money in here, we’ll extend these for five years. But we’re going to mandate cost data collection. Some states have also been working to pass laws to fill the holes of federal regulations, but they can be met with legal challenges.

There are many states that have tried to intervene to protect consumers on this. But generally, the industry comes right in and takes them to court and challenges the law. Under the CARES Act, one of the corona virus relief packages any provider, they got federal funding through the relief package is actually banned for balance billing anyone with suspected corona virus.

You can’t help but think about our big health care system in the middle of this pandemic kind of crisis. And people are recognizing the importance of having available, affordable, quality services for us and certainly in the emergency context, as we rethink the health care system, I hope that as a nation, we will just really think hard about whether we want to leave emergency services on a catch as catch can basis with unbridled for -profit companies without any great regulation, or whether we really want to think this through carefully and have a system that ensures that every American can get the care they need without going bankrupt.