A mine worker from Silver Peak blew a tire and rolled his truck on Highway 95. He woke up in the ditch on his back looking at his heels. Emergency crews arrived and the choice was a long drive to Reno - which he might not have survived - or an air ambulance trip. He opted for the latter. Word is that two hour medivac cost $50K.
Ambulance service used to be mostly public. No longer. After 2008,
private equity moved in. The Great Recession made life difficult for the folks charged with generating 10%+ returns for the super rich. Interest rates were down and equity prices were rebounding slowly as companies rebuilt their balance sheets. What's a well paid fund manager to do?
The old business saying is if you want something, you can have it good, fast or cheap - pick any two out of three. When you need an ambulance however there really isn't any choice. You need it good and fast. This is an ideal business for private equity: guaranteed high profits.
And in they came.
As detailed by Olivia Webb at Prospect.org, since 2009, two private equity firms alone (Kohlberg Kravis Roberts & Co. & Enhanced Equity Funds) have purchased 67% of America's ambulance services. Others moved in for the scraps.
Private equity is famous for squeezing cash out of take over targets by ruthless cost-cutting and, where possible, price increases. Having achieved a dominant position in the ambulance business, it's not surprising to see this happening now. Median medivac cost have risen from $10K in 2010 to $36K in 2017. Along side of this has been deterioration in services as less experienced staff replace higher priced experienced staff and equipment is run longer
(an example of which is documented here). The private equity owned firms have been aggressively seeking business, providing perks to emergency room staff and installing "hot buttons" at 911 providers to make it easy and simple to just give them a call.
The public is not well served by this. There really is no limit to what might be charged for monopoly ambulance services and the insurance companies know this. They are refusing to cover some charges. and an ambulance ride can generate"trap door" charges could bankrupt some patients. Even here, private equity firms are there to help; for a hefty fee, they'll sell you parallel insurance just to cover the ambulance ride.
The Alliance Party holds that healthcare must be made affordable and accessible to all Americans. When private equity controls your ambulance services, you get exactly the opposite outcome.
-- Mike Power
