Breaking down air ambulance billing – where does the money go?
Air ambulance flight bills can be expensive and difficult for insurers to understand. They are often drawn up quickly right before the flight and can vary hugely between different missions – difficult routes, complicated missions and Covid-19 measures all impact the price. But, generally, how do air ambulance companies decide what to charge for? Clara Bullock dives deeper into the factors that influence the price of an air ambulance flight.
Between paying the people involved in an air ambulance mission, paying for fuel and aircraft use, as well as medical equipment and take-off fees, the bill that covers a mission can be broken down into several factors. Bryce Nelson, Business Development Director at AirCARE1, told ITIJ “A few of the factors might include the lift-off fee, per patient loaded mile, crews remain overnight, specialty medical crew, international fees/permits etc. I have also seen an additional fee for being launched between the hours of 6 p.m. and 8 a.m. Here at AirCARE1, we do have a standard process while putting together a quote, to keep a consistent and ethical price for all parties involved. We work with many insurance companies that have guided us in the direction of building the majority of the price off of the Current Procedural Terminology Codes.”
Dr Joseph Lelo, Medical Director at AMREF Flying Doctors, added: “The pricing includes the aircraft operating cost per hour (fuel, maintenance, insurance, pilot costs) as well as overflight, landing and handling fees. The medical costs are made up of the professional fees per hour and a flat rate for equipment and medication. We also charge for the ground ambulance cost if using our ambulance. Accommodation costs and taxi transfers, if needed, are also built in.”
However, an exact breakdown of what’s included in prices is difficult to provide, as they vary so drastically between different missions, and are reactive to mission profile. Speed is also of the essence, as Eva Kluge, Chief Commercial Officer at Air Alliance Medflight, explained: “Quotes are provided to the client as quickly as possible, due to the time sensitive nature of the business, our target being within an hour of the initial request.”
A quote from Air Alliance would include the following as standard: the initial flight routing with timings, the number and location of technical stops, the time to patient and time to final destination, the medical configuration, the potential extra services if requested (e.g. ground ambulances) and the price.
Kluge added: “Air ambulance flights are ‘handcrafted’ services, individually designed for a particular patient. Most clients compare quotes with several other providers and prefer an all-inclusive quote. There are also models of hourly or monthly rates or a mix of both.” Would insurers even look at a complete breakdown of costs if an air ambulance quote came in an itemised manner? It has been suggested in the past that for some insurers, the only part of the bill that matters is the final line anyway.
What services go into the launch of an air ambulance?
An air ambulance quotes typically consists of fixed and variable cost. Fixed costs are those for providing the needed infrastructure to be able to provide air ambulance services at short notice. Examples for fixed costs are those related specifically aircraft (maintenance, depreciation, insurance), employed personnel, permanent standby fees for contractors, mandatory training, and medical equipment. Variable costs are those incurred in association with a mission, for example, fuel, overflight and landing permits, de-icing, medical consumables and per diems for contractors. Co-ordinating and carrying out air ambulance flights are complex and sophisticated services, which require the input of several different people, all of whom need paying.
Value of expertise
The process of launching an air ambulance is complicated and there are several people involved. First, the operations team will check the duty roster for appropriate flight crew. On every flight, there needs to be a captain (pilot in command) and a first officer (co-pilot, second in command) onboard. On certain occasions, they may need a third pilot for a heavy crew – for example, if the mission is very long. During Covid-19, this scenario has occured more frequently, as air ambulances have very limited possibilities to change flight crews by commercial flight.
Meanwhile, the medical co-ordinators will assess the medical report and will select an appropriate medical crew who are suitable for the respective patient and their condition. For example, they need to deploy a paediatric medical team if the patient is a prematurely born baby or a child. Kluge said they have a daily roster for medical crew, plus standby crews. “In case we have several flights on one day and, we also have an on-call text message system to bring in additional staff. The medical team will prepare the required medical kit, medication and consumables for the flight.”
The maintenance department and the ramp agents prepare the aircraft to be fully equipped for the respective transport. For example, it may be necessary to build in an extra stretcher or to remove one, or to replenish oxygen. The operations and dispatch teams will prepare a flight schedule, checking the routings and airports (opening hours, length of runways, international airport, etc.). They will also obtain permits where needed. Likewise, they will order fuel at the respective airports, organise all overnight accommodation for pilots and medical crew, and order catering.
Complicated routes are more expensive
Another factor that influences the bill is the route taken. On its website, IAS Medical lists an estimate of the prices for different routes: US to UK air ambulance – £50,000, Caribbean to UK air ambulance – £60,000, South America to UK air ambulance – £75,000, etc. Underneath, the company adds: “The cost of an air ambulance will depend on your individual circumstances, with prices depending on the following factors: the aircraft type, the distance flown, the number of medical personnel required, the airport landing fees and the distance ground ambulances need to travel.”
missions are usually more expensive if they are very long and if heavy jets are used. Further costs can be added if the mission has very complex medical or logistical needs
Kluge added: “A mission from Venice to Cologne, depending on the type of aircraft and the patient (e.g. Covid-19 or not), would be in the region of €8,000-€25,000, with a longer-range mission from Accra to Cologne being in the range of €50,000-€90,000. Obviously, rates are changing regularly, depending also on the fuel prices, overnight restrictions etc.”
But what about the medical cost? Kluge said: “We are like a flying hospital and clients are usually more focused on medical needs, but at least 75 per cent of all air ambulance costs are caused by the aircraft and everything related to it. The medical cost is substantially lower.”
What makes missions expensive, more than medical costs, is if they are very long: the more flight hours, the more expensive. The use of a larger aircraft also adds to the cost, Kluge explains, but often has the benefit that there is a much longer range and more space: for example, a Learjet 35 has a nonstop range of some 2,500nm (nautical miles, approx. 4,630km) before a fuel stop, whereas a Challenger 604 covers some 3,850nm (or 6,900km) nonstop. A Challenger 604 can carry up to three stretchers or, for example, a larger mobile isolation unit for infectious patients and potentially more luggage and crews.
Kluge concluded: “Overall, missions are usually more expensive if they are very long and if heavy jets are used. Further costs can be added if the mission has very complex medical or logistical needs; out of hours charges, specialist medical teams and equipment needs, for example, ECMO (extracorporeal membrane oxygenation) transports, but these costs are generally not as impactful as the factors of distance and aircraft.”
Jet fuel impact
Operators, and their insurer clients, may have benefitted in 2020 from the plunge in jet fuel prices that resulted from the first global lockdown in April, when the cost of fuel fell due to the lack of demand from commercial carriers. Since then, however, the cost has been gradually, and predictably, working its way back up again. Albeit not to the same levels as seen in 2019 quite yet, but once travel confidence returns and the commercial carriers can raise their revenues per passenger kilometer back up again, that price will inevitably continue its upwards trajectory. And with that upwards trajectory will come increasing air ambulance costs.