Originally published in the Dallas Morning News

By Tony Colarossi

As our health care industry undergoes a period of disruption, regional hospitals are closing or reducing services at an unprecedented pace. This creates a new challenge: The use of for-profit airlift services to get trauma patients to distant emergency facilities and the new financial anxieties it creates.

At least 87 regional hospitals have closed since 2010, according to research by the University of North Carolina. Among the hardest hit states are Texas, Tennessee, Georgia, Alabama, Mississippi, North Carolina and Kentucky. As health care shifts from a fee-for-service model to being paid only for outcomes, care is increasingly consolidating into centers of excellence.

This has caused a spike in the use of airlift services, such as helicopters, to carry trauma patients greater distances in order to reach a suitable hospital. And these services aren’t cheap, often costing tens of thousands of dollars. This has resulted in some patients waking up from one trauma only to find themselves shocked by their transport bill.

As we consider what to do about the increasing use of these services, policymakers should remember three factors:

1. The changing health landscape: One thing is for sure, we can expect to see more air lifts in the coming years, not less. As health systems continue to look for ways to provide the best clinical services at the lowest cost, a growing number of regional hospitals will close entirely or become ambulatory facilities. They likely won’t have comprehensive trauma professional staff or emergency departments or in-patient service. That will inevitably lead to greater demand for air ambulances to get trauma patients to appropriate regional centers.
2. Price considerations: What should an airlift cost? Insurance companies and health systems will want to negotiate contract rates with air ambulance services that are considerably lower than the $30,000-plus per ride that they’re charging now. At the same time, patients will want protection against potentially huge bills. As airlift competition within a community grows, an unintended consequence is that the service that arrives may not have a negotiated contract rate with a patient’s insurance company. And the service that does may be assisting another patient who similarly does not have a contract with that patient’s insurer.
3. Cost considerations: It’s easy to complain about the cost of airlift services. However, these charges are often pushed higher by state requirements related to crew staffing and the need to maintain additional helicopters for redundancies and maintenance. To lower costs, communities need to forecast how much demand they truly expect for these services across a defined geography, allowing air ambulance companies to develop strategies to contain their costs. That requires a level of cooperation and coordination that does not exist today.

Anyone who has observed how politicians in Washington have struggled to reform health care can see that political realities make a federal solution unlikely. In addition, this problem isn’t entirely national and tends to be more acute in certain areas, such as the South, where hospitals are closing at a faster pace than elsewhere, and the Midwest, where distances from rural areas to hospitals are more significant than in other regions.

That suggests that the solution is to set up agencies in affected states — either at the state, county or regional level — to act as intermediaries to negotiate fair prices with airlift services and help to manage the relationship with this growing and important industry. These agencies could pool resources, perhaps through requests for proposals or even taxes that could be levied to subsidize the cost of services. Airlift services would then have to apply for charters from these agencies in return for meeting service benchmarks.

Such a solution would help contain costs at a time when structural changes look certain to increase demand for airlift services.

Tony Colarossi leads Plante Moran’s acute healthcare consulting services. He wrote this column for The Dallas Morning News.