Ambulance Services
Description
Companies in this industry transport patients by ground or air and provide emergency or other medical care. Major companies include Acadian Ambulance Service, American Medical Response, and ModivCare (all based in the US), as well as Falck (Denmark), Harmonie Ambulance (France), and Lufftransport (Norway).
The majority of the world's population does not have access to ambulance transport or prehospital trauma care. Global groups such as the World Health Organization (WHO), as well as smaller entities like Trek Medics International, are working to improve or establish emergency medical service (EMS) systems in developing countries, where prehospital care could reduce fatality rates.
The US ambulance services industry includes about 6,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $15 billion.
COMPETITIVE LANDSCAPE
Increases in immigration, birth rates, morbidity rates, and life expectancies, as well as emergency medical events, drive demand for ambulance services. The profitability of individual companies depends on quick and effective response and operational efficiency. Large companies have advantages of scale in contract negotiations, service capabilities, technology, and geographic coverage. Small companies can compete effectively by providing superior service in specific locales. The US industry is concentrated: the 50 largest companies generate about 60% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
The industry's major service is medical transport of patients, which includes surface ambulance emergency services (65% of industry revenue), surface ambulance non-emergency services (about 20%), and air ambulance emergency services and rotary wing air ambulance emergency services (each accounting 10%). Emergency calls often require medical assistance, while nonemergency services include transportation for medically unstable patients and transfers between health care facilities. More than one-third of ambulance establishments are not-for-profit entities.
Ambulance service companies respond to emergency (911) calls by dispatching vehicles and personnel to attend to patients at their location and en route to a hospital. A dispatched ambulance usually has a driver with first-aid skills and may have a nonmedical attendant, an emergency medical technician (EMT), or a more highly trained paramedic, who can administer life-saving procedures and medicine. Ambulance firms generally receive emergency calls from the local 911 center, but some may operate the service. Firms use their own dispatch systems to communicate with their vehicles and other facilities in the public emergency medical system, such as hospitals, police, and fire departments. Firms handle nonemergency calls by request or on a schedule.
Ambulance companies provide services to clients such as towns, counties, and fire departments either on a master contract or on standby. Contracts generally range from three to five years with renewal options and require the ambulance service provider to meet certain performance criteria, such as response times, types of vehicles and equipment, staffing levels, quality assurance, indemnity, and insurance coverage. Contracts usually are obtained through a competitive bidding process, and sometimes require response to a request for proposal (RFP). Standby support is provided for such events as concerts, athletic games, parades, and conventions. In determining whether to contract with an ambulance company, government entities assess the costs and benefits of providing emergency medical services themselves instead.
The key industry metric is response time, which is typically covered in a contract. For emergency ground ambulance service, the industry standard response time is within eight minutes (from the first call to arrival on scene), 90% of the time. For emergency aircraft, the response metric is the number of minutes from call receipt to liftoff. Some air medical firms maintain strict launch times; 10 minutes for rotor and 20 minutes for fixed wing aircraft. Quick response is crucial for patients with life-threatening conditions; many in the industry refer to the first 60 minutes from illness onset or injury as the "golden hour" within which to save lives. For nonemergencies, the response metric reflects reliability in picking up patients on time. Internal operational metrics include transport volume, amount of revenue collected per transport, and cost per transport.
Payment for services comes mainly from third-party payers, such as Medicare, Medicaid, and commercial insurance companies. Bills also go directly to self-pay patients, typically those who don't have private insurance or government benefits. Third-party payers don't always pay the entire bill and self-pay patients have a high rate of nonpayment; partial or nonpayment often results in write-offs. Some companies, in an effort to offset the cost of uncompensated care, negotiate subsidies with communities whose payer mix includes a high level of self-pay individuals. Accurate documentation of patients, services, and processes is extremely important to comply with government, insurance, and financial requirements; to get paid; and to avoid or address complaints.
Equipment and supplies are generally bought through distributors. Emergency vehicles include ground, helicopter, and fixed-wing ambulances; critical care trucks; and supervisory vehicles. Medical equipment and supplies for emergency patient care include heart monitors, automatic blood pressure cuffs, head immobilizers, stretchers, and gurneys. Ambulance service companies maintain vehicles and equipment in-house or outsource it.
The majority of the world's population does not have access to ambulance transport or prehospital trauma care. Global groups such as the World Health Organization (WHO), as well as smaller entities like Trek Medics International, are working to improve or establish emergency medical service (EMS) systems in developing countries, where prehospital care could reduce fatality rates.
The US ambulance services industry includes about 6,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $15 billion.
COMPETITIVE LANDSCAPE
Increases in immigration, birth rates, morbidity rates, and life expectancies, as well as emergency medical events, drive demand for ambulance services. The profitability of individual companies depends on quick and effective response and operational efficiency. Large companies have advantages of scale in contract negotiations, service capabilities, technology, and geographic coverage. Small companies can compete effectively by providing superior service in specific locales. The US industry is concentrated: the 50 largest companies generate about 60% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
The industry's major service is medical transport of patients, which includes surface ambulance emergency services (65% of industry revenue), surface ambulance non-emergency services (about 20%), and air ambulance emergency services and rotary wing air ambulance emergency services (each accounting 10%). Emergency calls often require medical assistance, while nonemergency services include transportation for medically unstable patients and transfers between health care facilities. More than one-third of ambulance establishments are not-for-profit entities.
Ambulance service companies respond to emergency (911) calls by dispatching vehicles and personnel to attend to patients at their location and en route to a hospital. A dispatched ambulance usually has a driver with first-aid skills and may have a nonmedical attendant, an emergency medical technician (EMT), or a more highly trained paramedic, who can administer life-saving procedures and medicine. Ambulance firms generally receive emergency calls from the local 911 center, but some may operate the service. Firms use their own dispatch systems to communicate with their vehicles and other facilities in the public emergency medical system, such as hospitals, police, and fire departments. Firms handle nonemergency calls by request or on a schedule.
Ambulance companies provide services to clients such as towns, counties, and fire departments either on a master contract or on standby. Contracts generally range from three to five years with renewal options and require the ambulance service provider to meet certain performance criteria, such as response times, types of vehicles and equipment, staffing levels, quality assurance, indemnity, and insurance coverage. Contracts usually are obtained through a competitive bidding process, and sometimes require response to a request for proposal (RFP). Standby support is provided for such events as concerts, athletic games, parades, and conventions. In determining whether to contract with an ambulance company, government entities assess the costs and benefits of providing emergency medical services themselves instead.
The key industry metric is response time, which is typically covered in a contract. For emergency ground ambulance service, the industry standard response time is within eight minutes (from the first call to arrival on scene), 90% of the time. For emergency aircraft, the response metric is the number of minutes from call receipt to liftoff. Some air medical firms maintain strict launch times; 10 minutes for rotor and 20 minutes for fixed wing aircraft. Quick response is crucial for patients with life-threatening conditions; many in the industry refer to the first 60 minutes from illness onset or injury as the "golden hour" within which to save lives. For nonemergencies, the response metric reflects reliability in picking up patients on time. Internal operational metrics include transport volume, amount of revenue collected per transport, and cost per transport.
Payment for services comes mainly from third-party payers, such as Medicare, Medicaid, and commercial insurance companies. Bills also go directly to self-pay patients, typically those who don't have private insurance or government benefits. Third-party payers don't always pay the entire bill and self-pay patients have a high rate of nonpayment; partial or nonpayment often results in write-offs. Some companies, in an effort to offset the cost of uncompensated care, negotiate subsidies with communities whose payer mix includes a high level of self-pay individuals. Accurate documentation of patients, services, and processes is extremely important to comply with government, insurance, and financial requirements; to get paid; and to avoid or address complaints.
Equipment and supplies are generally bought through distributors. Emergency vehicles include ground, helicopter, and fixed-wing ambulances; critical care trucks; and supervisory vehicles. Medical equipment and supplies for emergency patient care include heart monitors, automatic blood pressure cuffs, head immobilizers, stretchers, and gurneys. Ambulance service companies maintain vehicles and equipment in-house or outsource it.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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