Thursday, October 14, 2010

Following the Money in Air Ambulance Services

I have more news on the underpinnings of the helicopter ambulance industry. Over the past five years I’ve been focused on the aviation side, the operational stresses that cause emergency medical aviation to be the most dangerous kind of commercial transport in America. You can read more about my work with Patrick Veillette on that subject here.

But as the esteemed investigator John Fawcett always says, you never go wrong when you follow the money and I was lax in not paying more attention to the business side - how the for-profit air ambulance companies like PHI, Air Methods and Air Evac chase the dollars to make it all work.

Sure, I’d been told how some of these companies parked their helicopters in shopping center parking lots, using the considerable sex appeal of a gussied up medivac to convince Walmart shoppers they’d be wise to plunk down $50 a year in exchange for a guarantee they'd never have to fork over a dime if they ever needed to be moved by air. So the pitch is relatively simple, fifty bucks against a $20,000 bill in the event of an emergency.

Wait a minute, did I just write $20,000? Yes, loyal readers,that's what I wrote, and you know I've never pegged the cost that high before. But today I learned that's the figure being tossed around in Alfalfa County, Oklahoma where efforts are underway to sign up county workers for memberships with Air Evac and county commissioners are being urged to help make it happen by auto deducting the Air Evac membership fee from employee paychecks.

Now $20,000 is a scary figure and Phoebe Engle signed right up. She works for Alfalfa County and not only that, both her mother-in-law and father-in-law needed to be moved by air to big city hospitals some distance away from Alfalfa County, population 6,000. Medicare paid in both cases, but still, that $20,000 figure got her worried because her insurance only pays 80% she told me.

I was busy blogging about Life Evac's sale of helicopter ambulance services to the athletes at San Marcos Baptist Academy in Texas, while Air Evac salesman Doug Little was selling this product to Phoebe and others in Oklahoma.

“We need to get some more information on this,” Chad Roach told me by phone this afternoon. He's the chairman of the County Commission and he came right out and said he knows zip about Air Evac and less about helicopter medical services. He's not ready to put the touch on employee paychecks without first finding out more.

"We get so many offers, some are great and some..that’s not the case.”

Roach may want to reach out to nearby Woods County, Oklahoma where I’m told county executives have already approved a program to process the payments for county employees who wish to enroll in the Air Evac membership program. Or he can talk to the executives of Alfalfa Electric, who also opened their doors to the medivac salesman.

But he might also want to find out more about an industry operating in such crisis that the National Transportation Safety Board has held three separate special hearings, the most recent in 2009 after 28 people were killed in a series of helicopter ambulance accidents the year prior. Or he could take a look at the list of 15 Air Evac accidents over the past 12 years that I posted on an earlier blog.

“That’s the first I’ve heard about that," Roach said, sounding genuinely surprised. "Like I said, I haven’t had a chance to do the research."

I am dazzled by the sheer moxie of Air Evac's business plan to involve government executives in processing payments for a profit-making company with a questionable safety record, selling a service of questionable value.

And here's the kicker. According to what the folks in Alfalfa County were told by Little, one million people have already purchased Air Evac memberships, providing the company with a $50 million annual revenue stream. Little claims some 10 to12 percent will actually have need of an air ambulance in the future. I think this  figure is inflated. But if its true and insurance pays at a reimbursement rate conservatively estimated at $5,000, that's another $550 million in revenue. And we haven't even touched on transports of patients not in the program, the $20,000 kind.

John Fawcett is right. To understand what's really going on in this industry, you have to follow the money.


Anonymous said...

Thank you for bringing this to light. The general public has no idea about the poor safety record of Air Evac Lifeteam. The public believes that all medical helicopters are the same and do not know the difference between a 1979 Bell 206 with minimal safety equipment and new twin engine, IFR aircraft with the latest NTSB recommendations. Not to mention the minimal experience levels of the medical crews on many Air Evac aircraft.

Anonymous said...

Hello, It is a tragedy when anyone dies. However, out of the vast numbers of people flown on Air Evac every year they have 1.25 accidents per year. The entire Air Ambulance community, PHI, Vanderbilt, Life Flight etc. etc. etc. there is the poorest safety record in aviation, which mind you is still safer than driving 10 minutes down the road. You hear about these people that call a helicopter for a band-aid call, not needing a helicopter. But, most people that require an air ambulance are going to die if they don't get to a hospital within minutes. Let's look at the twin engine helicopters that you mentioned. Not any safer, most accidents are not due to engine failure. The nature of HEMS (Helicopter Emergency Medical Service) is generally the most dangerous flying that a pilot can do. People call you and expect you to land in the middle of the woods on this back road at 3:23 in the morning when its pitch black or in an intersection of some busy highway with power lines on every side. You need to pull your head out from where it is and stop looking at the negative side only. Believe me the positives far outweigh the negatives. Ground ambulances have more accidents. Why don't you start writing about that? Stop with your fear mongering smear tactics.

Christine Negroni said...

Air ambulances provide a valuable service, agreed. But your statement, "Most people that require an air ambulance are going to die if they don't get to a hospital within minutes." is just not supported by the facts. The opposite is true. The majority of HEMS flights are inter-hospital transfers, meaning the patient is already at a medical facility.

Because so much of what you do, landing at 3:23 in the morning near power-lines or by a busy highway involves increased risk, it is even more important that only the most critical cases get transported by air.

Studies and anecdotal reports indicate that HEMS is overused and that is what makes the industry's appalling safety record even tragic.

Anonymous said...

Statistically speaking, HEMS is no more overused than ground EMS, fire departments or law enforcement. Ground EMS has become more of a taxi than not in many parts of the departments waste a needless amount of time doing "lift assists" and responding to other false alarms....and law enforcement in general is used and abused beyond measurement. People needlessly die in these professions as well.
Not sure your comparison of the safety record of HEMS to other areas in the aviation industry is a reasonable one.

Anonymous said...

Where are you getting your information that the majority of HEMS is used for transfer? This may be true, MAY, but the majority of those flights might be someone who was taken to a hospital that cannot support the seriousness of their injuries and instead need to be taken to a place such as a level 1 trauma center, or they will die within minutes. I agree that HEMS should only be used for the most critical cases, and that there are instances of misuse. However, it seems that all you want to do is create a sense of fear in the people. 1.25 accidents per year from AEL. Your more likely to die getting in your bathtub than getting transported by AEL.

Anonymous said...

"Christine Negroni said...
Air ambulances provide a valuable service, agreed. But your statement, "Most people that require an air ambulance are going to die if they don't get to a hospital within minutes." is just not supported by the facts. The opposite is true. The majority of HEMS flights are inter-hospital transfers, meaning the patient is already at a medical facility."

Absolutely untrue!!! Lots of patients immediately need life-saving services that are not available at each and every medical facility. Cardiac cath lab, Stroke team, Extracorporeal Membrane Oxygenation, sub-specialized surgeons and the specialized equipment - trauma, vascular plastics, neonatal, pediatric, etc.

Anonymous said...


Why would a self-proclaimed expert in aviation and safety focus on the "questionable safety record" of one company when this is obviously an industry-wide problem?

If the only tool you have is a hammer, then all of your problems begin to resemble a nail. The cost of health care in general is outrageous, not just the aviation EMS industry. Some facilities charge you $2500.00 per night to stay in a critical care bed alone (not to include any treatment, tests, or procedures). Is it your "non-technical perspective" that keeps you from blogging about the other failing aspects of healthcare or just an overall lack of understanding?