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The landscape of the American Healthcare industry looks different now than it did 50 years ago. The Affordable Healthcare Act (commonly known as ‘Obama Care’) is the most recent shift that has shaped the face of healthcare in America. Americans are now legally required to have health insurance. The problem is they are often paying as much, or more, out of pocket today as they did before the Affordable Healthcare Act was put in place. Medical costs are on the rise, insurance companies are not increasing coverage amounts, and the consumer is left to shoulder the debt. According to Lemer (March 2018) “In 2008 more than 8 percent of a family’s income was spent on health care. In 2015 (last available data) it rose to 12 percent. This means people are making less money today as a direct result of the cost of healthcare.” For some consumers, it has become an unfortunate reality that even with private insurance they simply cannot afford to seek medical care. For this group of Americans, the problem is often compounded because by the time they go to the doctor or hospital the issue is more severe and requires more expensive tests and treatments then it would have if it was addressed earlier. The problems we have with the American healthcare system are the same ones that were being debated before the Affordable Health Care Act was drafted. This leads us to ask the question: “What would it take to reduce healthcare costs in America?” Healthcare costs in America are on the rise partly because of artificially inflated healthcare fees. One potential solution could be required transparency for air ambulance services and add additional regulation to the air ambulance industry. Countries all over the world have faced challenges with creating a cost-efficient and effective healthcare roadmap. They have come to many different conclusions, each with varying degrees of success. Each solution that could be put in place has potential benefits and challenges it may create. Sahadi (Jan 2018) “Private-sector employers [in America] paid nearly $665 billion in 2016 in health-related costs, up 5% from the prior year, according to CMS data”. Americans of all income brackets are impacted by this issue. People in high to middle-income households would feel the greatest impact from positive changes to healthcare out of pocket costs. Medicaid [low income] and Medicare [disabled and retired] recipients would not likely see a transformation of their current out of pocket costs. Healthcare providers that accept Medicare and Medicaid insurances are also obligated to accept the associated fee schedules. Healthcare costs are rising partly because of artificially inflated prices in self-regulated industries, such as the air ambulance medical transport industry. Lemer (March 2018) wrote in reference to high air ambulance charges “That problem [of high air medical service costs] is driven by a complete lack of transparency, particularly on the price side. So it’s imperative to talk about prices”. Air ambulances are usually called to transport patients when a ground ambulance cannot safely do the job. According to industry insider Lila Morales, Air Methods Patient Advocate Supervisor (Nov 2018), “Air Ambulances provide a higher level of care then ground ambulances. A patient must meet certain criteria in order for us to be called. Either the ground ambulance cannot get the patient to a hospital fast enough or they need a higher level of care then a ground ambulance can offer. Each of our [Air Methods] transports have a paramedic and a registered nurse onboard. We also carry some lifesaving equipment that ground ambulances simply do not”. Due to the nature of air ambulance service, patients/consumers are not generally able to choose their provider or even shop around to price check between providers. During a life threating emergency, there is often not the time for the consumer to ask how much a transport will cost, if someone else could do it cheaper or if it will be covered by insurance. This means that consumer price regulation seen in other industries does not exist for air ambulances. “Air ambulance operators in the U.S. have been able to raise their prices to a much greater extent than the medical and airline industries generally due to the unique nature of the market, and the protections afforded to them as air carriers under the Airline Deregulation Act.” Head (2018, May 24). Costs of air ambulance fees are not federally regulated. Many states have attempted to place regulation on soaring prices of air ambulance transports but their attempts have failed. Luthi (Oct 2018) explains that the  “Airline Deregulation Act of 1978 is a federal law that bans states from regulating rates, routes or services of commercial airlines and continues to overrule state efforts to rein in air ambulance charges”. Consumer buying cannot regulate air ambulance charges. State governments are prohibited from regulating air ambulance charges. “Capitalism struggles to fit emergency services into its overall structure. When it comes to basic services, corporations” mandate to maximize profits and deny access creates complications, not the least of which is that the negotiating power between consumer and owner is lopsided.” Anderson, D. (n.d.). That leaves the federal government as the most appropriate option to regulate air ambulance charges. “In large part, patients are receiving huge air ambulance bills because of issues between commercial payers and air ambulance companies, according to the report. Payers refuse to pay fair market value for the services, and air ambulance companies will not disclose their actual costs, according to the report” Rappleye, E. (n.d.). The federal government could place regulations on the number of transport services within a set population size. Head (2018) wrote “According to other providers interviewed by the GAO, the U.S. air medical industry is “oversaturated” and helicopters are being added in areas with existing coverage, “thereby reducing the average number of transports per helicopter rather than increasing access to patients previously not covered by the service”. There are certain operating costs that are set and will not vary based on the volume of flights for air ambulances. As an example air ambulance must have a set amount of insurance coverage per aircraft. Air ambulance companies must also pay for their medical staff to be on site 24 hours a day 7 days a week regardless of the how many transports occur during that time. The high fixed costs of operating the aircraft and staffing them with trained medical providers are difficult to offset when a company is competing for a small number of flights. Oversaturation of helicopters in a set area can drive charges to the consumer up because each helicopter and crew will have less billable transports to pay for the set fees. “And if you ask me personally, do we need 900 air medical helicopters to serve this country, I’d say probably not, maybe 500, 600 could do well, but it’s an open market, these are—we don’t have certificate-of-need restrictions," Todd [ former Air Methods CEO] said, according to the call transcript.” Luthi (Oct 2018)	The Air Ambulance industry is leery of government regulation. They advocate that the high cost of air ambulance services is not due to oversaturation bust instead due to gross underpayment by government payers such as Medicaid and Medical. “The fundamental problem is that the current reimbursement rates by Medicare, Medicaid and some of the private insurance companies fall well short of what it actually costs to provide this lifesaving service,” Air Methods Executive Vice President JaeLynn Williams said in an interview. She declined to comment on specific patients’ cases.” Tozzi(June 2018). The air medical service industry is pushing back and has even created their own group to lobby for them in Congress called Association of Air Medical Services, or AAMS. According to Luthi (Oct 2018), the AAMS has asked Congress to look at recalculating the air ambulance Medicare reimbursements. AAMS claims that recalculating reimbursement for patient transports is the only solution that will actually fix the problem. Without an increase in payment, the Association of Air Medical Services warns that air medical services, especially in rural areas are at risk. According to the official website for the Association of Air Medical Services website “Medicare only reimburses about half of the cost for a flight, Medicaid even less. That leaves commercial insurance reimbursement that varies widely across the country. Sometimes we’re paid fairly and reasonably by commercial insurance; increasingly, however, we’re not. The economics are unsustainable” …we deploy without regard to a patient’s ability to pay. That means sometimes we don’t receive payment for our services, and payments for Medicare or Medicaid patients don’t come close to covering the actual cost for providing our service. While we seek every efficiency and innovation to keep costs down, 85% of our costs for operating an air medical base are fixed, meaning we face those costs just by staying ready at all times.” Increasing Medicare and Medicaid payments will increase expenses to tax payors and simply shift the cost. Medicaid and Medicare are government payers. This means their money is largely subsidized by taxpayer money. If Medicare and Medicaid start paying higher rates for fees the cost will be shifted from the individual patients to the tax payers. “Let’s take the example of Ohio. Ohio applies two taxes to private health insurance premiums: a 5.5 percent state sales tax, and a 1.0 percent state health insurance tax, for a total of 6.5 percent. In 2011, the average employer-based health plan for a single person cost $5,025, which means that the average Ohioan is spending an extra $327 a year on insurance taxes.’ Roy (2013) Conclusion Understanding why healthcare providers charge what they do is an important step towards finding a solution for reducing health care costs in America. There will not be a simple solution and there is not a single villain in this story. It is important that we look at the big picture and through research, identify a possible solution to help find the resolution. Requiring transparency in the pricing for the air ambulance industry is a solid step toward helping understand and manage costs. Insurance companies will be less able to underpay for a transport if they can clearly see why it costs what it costs. Both sides of the line agree that the air ambulance industry is unique. They also agree that there are certain costs that will exist regardless of how many billable transports the company has. Limiting the number of helicopters in a set area or for a pre-defined population amount will help ensure each helicopter will have enough transports to cover their set operating costs.

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