The Real Cost Behind Your 911 Ambulance Trip

Please read disclaimer before reading.

I happened across an article by consumer advocate Bob Sullivan about an $800.00 ambulance trip to go 5 miles. At first blush, this seemed rather costly. I thought is this yet another healthcare expense with which the public should concern themselves? We all know consumers are under a constant barrage of services brashly or subtly competing for their hard-earned dollars. I decided I would investigate.

Some consumer expenditures are not as planned in advance as a new car or fancy dinner. Ambulance transports are services purchased while the patient is at his or her most vulnerable. It’s easy to see why so-called “horror stories” of convalescing patients blindsided with large ambulance bills set off the justice-seeking side of the internet. These well-intentioned bloggers may be trying to protect these consumers of health care and ensure no predatory pricing of a captive market occurs, but there is another side to this story.
Large ambulance companies have as thin a margin as you can have and still stay in business. Mr. Sullivan’s characterization of profit-hungry ambulance companies is a bit of a stretch. Even though the companies he describes are publically traded, they may not stay in business for that much longer. Giving him the benefit of the doubt, and assuming their profit margins ARE in fact 30 cents on the dollar, that isn’t the sort of income Large EMS providers like these need to stay in business for very long. Also, these large providers are usually contracted out by larger cities, with big needs. If they go away, who will serve the community? And by the way, your local community ambulance service is struggling, too, with just as thin, if not a shrinking margin.

For each story of these “egregiously priced” rides, there are just as many EMTs and paramedics with tales of uninformed or uncaring callers requesting an ambulance for non-emergency blisters, hangnails or paper cuts. So how do we find the happy medium? Love it or hate it, the current system is what it is, and the best way for patients to not feel cheated is to educate themselves on what is and is not a 911-appropriate emergency, to look behind the driving costs that make up the ambulance bill, and to understand the other “shock” factors that add to the impression of unjustified costs.

Preparation is Key

Keeping in mind that there are always exceptions to every rule, what follows are suggested guidelines and not actual medical advice. One way consumers can protect themselves from unnecessary ambulance fees is to first determine whether the injury warrants the initial 911 call. Believe it or not, many patients use an ambulance more as a “medical taxi” to the hospital, and not for a life-saving transport. Also, familiarize yourself ahead of time with your preferred hospital’s urgent care entrance and phone number. Enlist the help of a friend or loved one that is able to drive you to the hospital in the event of a non-emergency incident, such as a broken toe. If nobody is around, taxis and ride-share services like Uber are willing and suited for transporting people with non-emergency conditions. Yes, things do get a bit haywire in the moment, but if you have prepared ahead of time, you might just save yourself well over $1000 in the end. IMPORTANT – at your time of need, if you have any doubt or can’t even think about these types of things due to your medical emergency or physical condition, never hesitate to call 911. NEVER HESITATE. Chances are that your ambulance transport is going to be medically justified, but your health, safety and well-being are paramount.

The Cost of Doing Business
Should you wind up in an ambulance, you should know how the bill for this service is being tabulated. Up until a few decades ago, ambulance rides were often free of charge and funded with taxpayer dollars or membership fees. The relative operating costs of this era are still there and have actually increased as the vehicles have gradually transformed into mobile ER units. In addition to the technology and training that goes into outfitting and operating these units, one must also consider secondary and tertiary costs.
Ambulance providers are some of the most difficult entities to keep financially afloat. They are both capital and labor intensive to the extreme. Patients expect immediate response with top-flight health care. This presents quite a challenge – even for the most clever business school graduate. The cost of operating one fully-stocked and staffed ambulance on the road can run upwards of $300,000 plus, depending on geographic location.

In Pinellas County, Florida, for example, it runs about $182,731 for supplies, equipment and ambulance personnel. Then, there is another $122,939 for the ambulance vehicle, gas and other related costs. Although many EMTs are volunteers, most are not. They must be paid 24x7x365 together with employer payroll taxes associated with round-the-clock wages. Moreover, these companies are highly regulated by local, state and federal entities. Adherence to these cumbersome administrative and legal requirements – such as licensure, HIPAA compliance, and employee training – can drain even the most fiscally prudent ambulance services. And if that weren’t enough, the cost of insuring an ambulance service (volunteer, government or private/for profit) is generally in the highest risk category. This includes workers compensation, auto, business liability and data breach insurance to name a few. So, while at first blush, it might seem that $800 is overpriced for a five-mile trip to the emergency room and a couple of pain relievers along the way, this pricing model follows the same economic principles that cause your hand-made meal at home cost much less than that which you would purchase at a restaurant when dining out.

Other “Shock” Factors
Adding to the shock value of ambulance (or other health care) bills is the ever-increasing patient payment responsibility. Government is looking for ways to reduce its costs, and, therefore, its payment of claims due to shrinking Medicare and Medicaid funds. Medicare’s requirements for payment of ambulance services have dramatically increased making it easier to deny claims, and harder for our nation’s elderly to get their ambulance claims paid. Therefore, the burden of payment shifts from the government to the patient. As if this weren’t enough, the Medicare post-payment review specialists are out in full force to pull back money on previously paid claims for any technical billing error they can find. This dilemma is not limited to Medicare and Medicaid insureds. Patients currently covered by commercial insurance will likely find themselves responsible for ambulance and other medical expenses due to high-deductible/high co-pay plans.

Also, uninsured patients can and do often feel the shock more than insured patients, faced with paying the full “face value” of the bill. What they don’t realize is that if they can demonstrate financial hardship, most EMS providers will work with them, sometimes allowing smaller installment payments or even discounting the total amount of a bill. This post won’t be solving the problems within the insurance industry. It’s just another factor to consider when facing the initial sticker shock of that bill.
Finally, the recent economic downturn has left more and more of the uninsured without the means to fully – or even partially – pay their ambulance bills. As noted above, EMS providers traditionally did not employ a cash-up-front business model. The decreased likelihood of these EMS providers receiving full payment from patients or insurers has some intrepid companies accepting debit or credit card payments up front for co-pay, deductibles or even the full balance. However, as more and more patients are without the means to pay, these providers are left with a growing deficit that needs to be filled. Unfortunately, that cost is passed on to the patients who do and will pay.

The halcyon days of hospitals donating equipment and bake sales to shore up funds seem long gone for ambulance companies. The public demand for immediate ambulance response, expertly performed and executed by EMS providers is a huge cost driver. The other is omnipresent government regulations always on the rise to serve the ever-increasing public consumption of 911 services. There’s hurt on both sides of the equation. Hopefully, you will never receive an ambulance bill, but if you do, try to consider that it is not just another faceless corporation trying to rip you off.