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COVER STORY - June
2005 The Medical Sky Wars The helicopter flight from Somerset to Lexington took 30 minutes. “I don’t know if I would have made it in a ground ambulance,” Sanford said. Sanford has been air transported for medical care three times in the past five years. His history is indicative of the burgeoning market for rapid medical transport – so-called “air ambulance” services – across Kentucky, one that has grown to include 13 companies flying to nearly every part of the state. Private companies have largely replaced what used to be hospital-operated aircraft, rushing patients from accident scenes and shuffling them between hospitals. A decade ago, there were four air EMS aircraft flying in Kentucky. They were hospital-based and centered around urban areas like Louisville, Lexington and Knoxville, Tenn. Now private companies operate nearly 40 aircraft based in and outside Kentucky that serve the state. “Ten years ago, if I was involved in an accident in Laurel County and I needed air transport to a trauma center, I would have had only two choices: University of Kentucky and University of Tennessee,” said Letch Day, regional director for the Kentucky Board of Emergency Medical Services, which regulates EMS services statewide. “Now there are 37 aircraft serving the state. We’ve got 120 counties in Kentucky – that’s one aircraft for every three counties.” But as the number of such services has ballooned in the state and around the country, so has the competition for clients. But air EMS companies with in-state bases are not the only ones flying here. Some aircraft make runs into Kentucky from bases in Indiana, Ohio, Tennessee, Virginia and Missouri. Each operator, whether or not it has a Kentucky base, must be licensed by the Kentucky Board of Emergency Medical Services to do business here and must abide by local laws and regulations, Day said. Such competition has its cost. An airlift can range anywhere from $5,000 to $10,000 in price, five to 10 times that of a ground ambulance. In 2002, Medicare increased its rate of reimbursements for airlifts and also raised the rate for patient pickups in rural areas like much of Kentucky. Nationwide, spending by Medicare on medical flights last year, about $103 million, was twice what it was in 2001. “We get the national standard insurance payment,” Smith said. “That means if a flight costs $7,500, we usually get $5,000.” The difference is paid by Medicare supplement policies or out-of-pocket by the patient. Englewood, Co.-based LifeNet has the largest air medical presence in the state, operating seven helicopters from six bases in Kentucky. But some companies like Air Evac take a different tack. While the West Plains, Mo.-based company services hospitals and bills insurance companies for covered patients, it also sells its own coverage options to individuals or families. For $45 a year, a card-carrying couple can call a helicopter – instead of, say, 911 – in a medical emergency, and the cost is covered. Family coverage costs $50 a year. Tom Sanford and his wife, Barbara, are both Air Evac “members.” A packet with their personal medical information and particulars about their Air Evac membership is affixed to a wall in their refrigerator, a spot where all members are asked to keep their information. Knowing they’re covered comes with a certain peace of mind. That they don’t have to spend thousands of dollars to get the service is a significant benefit. “We could never have afforded Tom’s flights,” Barbara said. “Our health insurance doesn’t cover it. As far as I’m concerned, $45 a year is not much to spend to save your life.” Air Evac only covers members in situations requiring air transport, and the company has said it does not transport patients when their situation isn’t critical enough to merit it. But membership-based services have been criticized because policyholders may choose to wait for their particular service in an emergency, foregoing other emergency transport that may be more immediately available. Often that happens at the emergency room door. That was Barbara Sanford’s case when, during another cardiac incident, her husband needed rapid transport from Lake Cumberland Regional Hospital to Lexington. Their doctor decided Tom’s condition was serious enough that he should be transferred from Somerset to Lexington’s Central Baptist Hospital. He ordered LifeNet, the helicopter based at Lake Cumberland Regional that was waiting on the pad just outside the ER door. But Barbara stopped him and instead requested Air Evac, “because we’re members,” she said. They waited while the nearest helicopter flew in from a pad 50 miles away in Albany, Ky. Under federal regulations, hospital staff cannot prevent patients from making such a choice, even if it means awaiting a service based in a different part of the state, said Susan Wilson, spokesperson for Lake Cumberland Regional. “Certainly patients have the right to make their own decisions about a multitude of things, including refusing care or changing their minds about a transport agency,” Wilson said. But such choices, as well as a practice called “scanner jumping,” where competing air medical services scramble to beat the dispatched EMS team to the scene of an accident, have drawn criticism from regulators and some physicians. Letch Day, of the Kentucky Board of Emergency Medical Services, said there have been few incidences of scanner jumping in Kentucky. State regulations detail when air transports may fly outside their own service areas. A licensed service may respond to emergency calls outside of its geographic service area only if the company is providing mutual aid under an existing agreement. “We also have a protocol in place for requesting services,” Day said. “If an EMS team is on a scene and determines air EMS services are necessary, they call the dispatcher. The dispatcher knows where the aircraft are and the dispatcher calls the nearest provider. We don‘t have teams making scene calls from cell phones.” Reaching the
saturation point
Annually, each licensed provider must submit to a KBEMS inspection of its operations, equipment and medical staff credentials. Even with regulations and specific protocol in place, Day admits it may take further regulation to keep the state’s industry from expanding too much. Currently, any company that applies for a license and meets all the requirements can become certified – even if there’s no market demand for more service. Petroleum Helicopters, Inc. (PHI) is a Lafayette, La.-based company that covers all of Kentucky. According to Gary Stromberg, regional manager for Kentucky and Indiana for PHI Air Medical Services, Kentucky’s air EMS market is “one or two aircraft” away from its saturation point. He said market overcrowding could be eliminated by stiffer licensing requirements and mandatory accreditation by a voluntary industry standard-setting group, the Committee on Accreditation of Medical Transport Systems. LifeNet holds CAMTS certification, and PHI’s accreditation review takes place this month. Seeking and retaining CAMTS approval can cost tens of thousands of dollars, Stromberg said. Kentucky currently does not require the accreditation, and some states that have sought to make it mandatory have faced heavy lobbying from the industry. Stromberg believes requiring certification will increase the quality of air EMS providers in Kentucky, and the high cost of certification will shake out providers unable or unwilling to pursue it. However, not everyone agrees that Kentucky’s air EMS market is about to be overrun with competitors hungry for a slice of a crowded market. “In the urban areas over-saturation may be a problem, but there are so many remote places in Kentucky where people need helicopters to get to health care centers. We’re all providing a valuable service. I think there’s enough business for all of us,” Air Evac’s Heavrin said. While providers and regulators debate the matter, old-fashioned economics may ultimately determine just how large Kentucky’s air medical transport industry grows. Territories are quickly being claimed and operating costs are rising. Air EMS aircraft cost between $3.5 million and $5.5 million. And medical equipment, crew personnel and insurance keep routine operating costs high. “As it is,” said Tim Smith, “the cost to just lift off and fly around Frankfort is between $500 and $700 for crew, insurance, fuel and aircraft maintenance.” So with or without more regulation, Day predicts that the high cost of doing business will force would-be competitors to think hard before setting up shop here, and shake out under-utilized providers. “Really, air medical services are the best thing that’s happened to EMS services in a long time,” Day said. “However, why would I want to buy a helicopter and put it in Albany where there are services already there? It’s just not financially feasible.”
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Copyright 1996-2005, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2005, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
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Wayne County businessman Tom Sanford took his first flight aboard an Air Evac Lifeteam helicopter in January 2000. He says it saved his life. The 60-year-old retailer wound up in the air ambulance after his doctor at Somerset’s Lake Cumberland Regional Hospital ordered Sanford – who had just suffered a tear in the inner lining of his heart’s aorta – to undergo emergency surgery at St. Joseph Hospital in Lexington.
Along with Air Evac, LifeNet Air Medical Services and PHI Air Medical Services are among those operating air ambulance services in the state. All three are owned by parent companies outside Kentucky. An estimated 700 medical helicopters operate nationally.
Not all providers cover those costs the same way. According to Tim Smith, program director for LifeNet’s Kentucky operations, his company bills patient insurance and other public insurance companies for emergency calls. Most air medical companies have a similar business model.
Air Evac spokesperson Julie Heavrin said the company does not encourage members to make decisions like Sanford’s. “We would prefer in that situation that they go with the helicopter that is closest,” she said.