ITIC Global 2023 | Air ambulances – what does the future hold for payers and providers?
In our second session, Brandon Bates, Lisa Humphries, and Julie Remmington discuss the various challenges and possibilities facing air ambulance providers in the near future
The ITIJ team have been reporting live from ITIC Global in Barcelona this week (November 2023) sharing the discussions that took place at the conference. Read all reports
Julie Remmington, Director, Real Travel Assistance
Remmington began by summarising the state of the UK health situation – noting that since the Covid-19 pandemic there has been a rapid increase in waiting times for health treatment. She noted that while there are numerous specialist providers in the country, they typically provide cover to older people or those with pre-existing conditions. Additionally, premiums have increased by between seven per cent and 30 per cent depending on provider.
“Customers are a lot more demanding now, and are much more informed about what they want,” she said, adding that in some cases, this dissonance between expectation and reality can lead to confrontational situations between providers and customers if not rectified early on. “It is really important that we set their expectations as soon as possible,” she said.
She argued that modern methods of communication between assistance firms and their network – such as a heavy reliance on online communication – can be somewhat opaque, and can cause challenges.
“One of the quoting issues I see is whether providers know their suppliers. When I started in assistance, you would regularly visit the air ambulance provider so you could know that they were an air ambulance.”
Remmington said that it was important to rigorously assess whether suppliers offered value for money, rather than just being the cheapest option, and whether the service offered the ‘best option for the patient and provider’.
Lisa Humphries, Business Development Director, Capital Air Ambulance
Humphries explained that when putting together a quote for a medical repatriation, there were a number of factors to consider. While the costs of each individual factor involved can be estimated in advance to some extent, perfect accuracy is not always possible.
“Quoting is not an exact science,” she explained, adding that while quotes are based on the information provided about the patient’s condition prior to the transfer, this information is often basic. If a patient’s condition is better or worse than their initial diagnosis assumed, this can affect the cost of providing a medical team.
Likewise, other new developments can occur after the initial quote is submitted which can affect the availability – and therefore cost – of securing an aircraft for the transfer. The patient may not yet be fit to fly, or there may not yet be a bed secured at a suitable healthcare facility at the patient’s destination.
Humphries explained that repatriations can be delayed substantially by such challenges – potentially by days, or even occasionally weeks – with the end result that the initial estimates given by aircraft providers may be outdated.
Additionally, Humphries also noted that the cost of aircraft maintenance has grown 15 per cent in recent years, while fuel costs rose 43 per cent in the wake of the war in Ukraine. Meanwhile, both medical staffing costs and landing and handling fees have risen 20 per cent, while ‘insurances, such as aircraft insurance … have gone up 80 per cent’, she added.
Echoing Remmington, Humphries also questioned the efficacy of online quoting tools, arguing that the shift to digitised communication had led to air ambulance providers and clients being more distant with each other.
“I feel that whilst online quoting tools are good in one sense, we’ve lost direct contact, and there are opportunities for a better service,” she said, noting that for approximately 90 per cent of quotes, Capital gets no feedback from clients. This, she said, offers limited opportunities for improvement in the event that a flight is cancelled. “How can we improve if we’re not told what the problem is?” she asked.
Brandon Bates, Director Global Strategy and Partner Relations, AirMed International
Bates began by noting that: “What we’re facing as an industry is a tremendous amount of inflation taking place not just across our space, but in general,” he explained. “But in our industry, travel costs for airlines, hotels, and rental cars have risen by about 50 per cent.”
He added that on top of this, there have been over 100 per cent increases in costs for things such as landing or handling fees, aircraft parts, ground ambulances, and fuel.”
“Touching on the travel cost side of things – one of the main reasons driving inflation is pilot shortages.” He noted that global pilot demand is going to reach beyond 400,000 pilots by 2029, with an estimated 60,000 pilot shortage by this date. “This is a major issue that is not going to get better any time soon,” he added.
Maintenance costs have also increased. Bates explained: “The labour force for mechanics is almost as dire as it is on the pilot side,” he explained, adding that since the Covid-19 pandemic ‘we lost a lot of good mechanics, and what we’re seeing is that they’re not coming back’.
Consequently, what maintenance provision is available is being prioritised towards newer aircraft, with operators of older aircraft feeling the strain as a result due to the lack of provision, and higher costs as a consequence.
He noted also that fuel costs have spiked immensely in recent years, in part due to the ongoing war in Ukraine.
“It’s not a pretty picture for the payers,” he concluded. “At some point, those costs have to flow through to them.” He added, however, that ‘some of these costs increases are so high that you can’t pass all of it on to the payer, so in some cases.”