Air ambulance pricing

Air ambulance pricing
ITIC Global 2019

Three industry experts convened at ITIC Global 2019 to share their thoughts on air ambulance pricing, accreditation and cost drivers

NAAMTA’s Roylen ‘Griff’ Griffin, who is Executive Director of the company, discussed accreditation in the air ambulance industry.
He touched upon what an insurance company assumes is happening at an air ambulance company, in terms of accreditation and costings. He explained that if an insurance company sees that an air ambulance company is accredited, then this ups the value of the service that the insurer believes the company is providing, as well as the resources available. Referencing the cost of accreditation for air ambulance companies, Griff revealed that more often than not, these providers would put the bill under ‘Marketing’. But Griff disputed this, arguing that accreditation should be accounted for under ‘Training’, due to the demanding process involved in gaining said award. “You’d be surprised how often we walk into an organisation and they don’t have any policies and procedures,” he said, referring to NAAMTA’s common gripe when reviewing air ambulance companies.

Accreditation should be accounted for under ‘Training’, due to the demanding process involved in gaining said award

Griff also noted that, often, little value is placed upon safety management within these organisations. “When a company is trying to save money, the first thing they cut is training and the second thing they cut is safety,” he cautioned. 
He then detailed the value of gaining accreditation for both insurers and air ambulance providers, explaining that accreditation is a recognised set of safety standards, and that third-party vetting also evaluates training materials and markets a company’s new accreditation to the insurance industry. “You can’t manage what you don’t measure,” he professed, before relaying the importance of partnerships in air ambulance pricing, concluding that these helped ensure patient safety was always at optimum levels.
 

Roylen 'Griff' Griffin
Roylen ‘Griff’ Griffin, Executive Director, NAAMTA

Dr Cai Glushak, International Medical Director of AXA Partners, began his presentation on air ambulance pricing by looking at drivers of cost in the air ambulance industry. He cited key drivers as being improved medical care; consolidation in the industry; changes in the commercial air ambulance industry; weak currencies; and increased medical costs.

There is a limit to what you can do when pushing prices down

Dr Glushak then explored how costs could be affected within areas of limited availability when air ambulance shopping; he noted that exploited pricing, reduced motivation, resource limitation and limited choices can result in high pricing, as well as resource uncertainty. 
To be a responsible shopper, Dr Glushak advised to go for the best price, the best quality and the best availability. Another very important factor to consider when shopping is the reliability of the provider, he added. He encouraged comparison shopping to help find options that meet all of these needs. That being said, Dr Glushak did discourage overly competitive bidding on these factors. “If you push it too far, you will be pushing price over safety,” he said. “There is a limit to what you can do when pushing prices down.”
Ultimately, he argued that proper vetting is critical within the air ambulance shopping process, as foregoing this could put your company’s reputation at risk, as well as its operations. So, to conclude, is the cost related to the request (when it comes to air ambulance shopping) absolutely necessary? Yes, insisted Dr Glushak. “Ethical business practices are key to implementing and maintaining quality aviation and medical standards,” he said.
 

Dr Cai Glushak
Dr Cai Glushak, International Medical Director, AXA Partners

AMREF CEO Dr Bettina Vadera delivered the final presentation of the session on air ambulance pricing, identifying the key components of a quality air ambulance service. She cited state-of-the-art medical equipment, a specialised medical crew, 24/7 operations and call centres, and ground ambulance support as the factors that reflected quality in an air ambulance provider.

High-quality air ambulance services come at a hefty price

Similarly to Dr Glushak’s, Dr Vadera’s presentation also looked at cost drivers in the air ambulance industry. She explained that aviation direct operating costs (such as aircraft maintenance and fuel) and aviation fixed costs (such as salaries, training and aircraft financing and depreciation) were two of the top cost drivers, both accounting for about 90 per cent of evacuation costs. She also noted that medical direct costs, such as stretchers, equipment and drugs; medical fixed costs, such as medical crew training and professional indemnity; and other costs, such as call centres, accreditation, crew transport and positioning costs, were all cost drivers. 
High-quality air ambulance services come at a hefty price, Dr Vadera said. She noted that price competition can impact the standard of the service, just as Dr Glushak alluded to. And she warned that a price war in the air ambulance industry would inevitably affect patient care. 
As a resolution, Dr Vadera reasoned that contract work or related business lines can help providers to keep prices down through cost sharing. And rounding the session off nicely, she asserted that accreditation provides a systematic and independent evaluation of your own quality of air ambulance services. 

Dr Bettina Vadera
Dr Bettina Vadera, CEO, AMREF