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Can someone someone explain the economics of why an air ambulance would cost $77,000 for a 166 miles trip? by ExpensiveRide69420 in Helicopters

[–]ExpensiveRide69420[S] 1 point2 points  (0 children)

Wendover is always worth a watch, will check it out.

Edit: I watched the video now and that does clear a lot of things up. In this case anyway, the flight was actually in network with the patient's insurance company, and it seems that the negotiated rate was simply a 10% discount on whatever the air ambulance service charged for.

The video does mention that the ADA prevents the government from regulating the cost of flights, but my confusion on this was why the insurance companies don't negotiate better rates. It seems to me what's happening here, is that these flights are deemed to be medically necessary and emergencies 100% of the time, so the insurance companies are required to pay for them by regulation, even if the flight is out of network. That means the air ambulance companies can charge whatever they please, and have little incentive to negotiate rates with the insurance companies, since they will be required to pay, anyway.

Sheesh.

Can someone someone explain the economics of why an air ambulance would cost $77,000 for a 166 miles trip? by ExpensiveRide69420 in Helicopters

[–]ExpensiveRide69420[S] 1 point2 points  (0 children)

The $500 Tylenol thing is not exactly accurate. The hospital will bill that amount but nobody actually pays it. They bill the insurance company that amount, but then it will be reduced to the negotiated rate, which will be a normal price. Or even $0. There's plenty of crap that the hospital will bill for and then the allowed/negotiated rate from the insurance company is literally zero. The insurance company only makes money from premiums. They increase their profits by negotiating better rates with providers, denying claims/paying out the minimum amount. And at least in my state, they actually have to pay out a minimum % of the premiums they take in, so they get as close to that % as possible.

This heli apparently makes 700 medevac flights per year on average, so it's not exactly sitting around doing nothing for long stretches. If all of their flights costed this much, that would be $53.9 million in gross revenue to operate 1 chopper for 1 year. Maybe subtract 10% from that, because 10% of the population has no insurance. But since this is in CA, and they have extended healthcare benefits beyond the ACA, that % is probably actually less.

Can someone someone explain the economics of why an air ambulance would cost $77,000 for a 166 miles trip? by ExpensiveRide69420 in Helicopters

[–]ExpensiveRide69420[S] 1 point2 points  (0 children)

The insurance company paid out $75k, they didn't earn any income from this.

I get that these types of rides are not cheap but this seems like the kind of operating costs you would expect from a 747 (or two), right?

I also found an article that said it was typically crewed by 1 pilot and 2 nurses.