This is Ambulance Services marketing research and can include information on the background, market structure, definitions, competitors, trends and developments of ambulance services and is related to other topics such as medical, emergency, health and transportation.

Table of Contents

[edit] Background

This is generally a fragmented and limited growth industry. A key player is the American Ambulance Association represents ambulance services serving more than 75 percent of the U.S. population with emergency and non-emergency care and medical transportation services.

Ambulance services include establishments that provide transportation of patients by ground or air, along with medical care, often provided during a medical emergency but are not restricted to emergencies. The vehicles are equipped with lifesaving equipment operated by medically trained personnel. This industry is often cross-referenced with establishments that engage in providing transportation of the disabled or elderly (without medical care).

[edit] Market Structure

Of the largest 200 cities in the U.S., 52% of them outsource emergency transportation services. The bulk of this work goes to ambulance services. The industry is relatively not very large and was estimated as having $8 billion to 10 billion in annual revenue in 2006. There are approximately 15,300 ambulance service establishments in the United States, which includes 49,000 ground ambulance vehicles and 840,000 emergency medical services (EMS) personnel. More than two-thirds of the largest 200 cities in the U.S. are served by non-fire-based ambulance and emergency services.

Emergency Medical Technicians are trained to deliver basic life support services as well as provide first aid, oxygen, splint and bandage application and CPR. Paramedics are also trained to deliver advanced life support services and provide intravenous therapy, airway management, cardiac monitoring and defibrillation, medications or other advanced care.

Ground-based ambulances comprise less than 1 percent of the local passenger vehicles in the U.S., while air-based ambulances (helicopters or fixed wing aircraft) comprise less than 2 percent of the non-scheduled air transportation sector craft.

[edit] Market Metrics

Recent research estimates on ambulance services in the United States indicated revenues of about $7 billion a year in the early ‘90s. This number had increased to potentially as high as US $10 billion by 2006.

A government initiative has had a major impact on the industry. In 1997, the U.S. government’s Balanced Budget Act had significant effects on the ambulance industry, as it further restricted the criteria for government Medicare reimbursements of emergency ambulance claims. By the following year, the Health Care Financing Administration had also published its own Medicare ambulance fee schedule and provided more detailed rules for determining the definition of "medical necessity." These new rules required physician certification for non-emergency ambulance services. The result was a significant impact on ambulance companies which had previously relied heavily on Medicare reimbursements for revenue. In some states with large Medicare beneficiary populations, for example, Medicare-paid ambulance services had comprised as much as 60 percent of all transport revenues. Under the current ambulance fee schedules, Medicare-based programs pay for transportation services for Medicare beneficiaries when other means of transportation are contraindicated.

With respect to Medicare coverage and the primary revenue drive for these companies, ambulance services are classified into different levels of ground (including water) and air ambulance services based on the medically necessary treatment provided during transport. These services include the following levels of service:

  For Ground Services -

   Basic Life Support (BLS)
   Advanced Life Support, Level 1 (ALS1)
   Advanced Life Support, Level 2 (ALS2)
   Specialty Care Transport (SCT)
   Paramedic ALS Intercept (PI)

  For Air -

   Fixed Wing Air Ambulance (FW)
   Rotary Wing Air Ambulance (RW)

Contracts in the industry between ambulance services providers and municipalities generally run between three and five years. Most providers charge a base fee as well as mileage and other fees if particular equipment is used.

[edit] Industry Players

Following a wave of consolidation in the early and mid-1990s, two clear industry leaders emerged - American Medical Response (AMR) and Rural Metro.

• American Medical Response (AMR)

Headquarterd in Denver, Colorado

Parent company is Laidlaw Inc. of Ontario, Canada

Merged with San Diego-based Med Trans

Operated more than 4,000 vehicles in 250 locations in 2004

Serving 3.5 million patients annually

Has more than 17,000 employees

• Rural/Metro Corporation

Headquartered in Scottsdale, Arizona

400 locations in 2004

Operates in 23 states

Revenues in 2006: $423 million

Operating margin: 9.8%

Also operates fire protection services

[edit] Trends and Recent Developments

In the 1990s, the outlook for growth in the ambulance business was favorable, due to an aging population and health care reform measures, which resulted in patients being shifted between facilities more frequently. However, due to increased competition and decreased Medicare or government funding, there has been a decline in the number of companies that offer ambulance services.

On April 1, 2002, the Centers for Medicare and Medicaid Services (CMS) implemented a fee schedule for the Medicare reimbursement of ambulance services. The rates under the new reimbursement system are significantly lower for many ambulance providers and are well below the cost of providing services for all ambulance service providers. Congress took action to help struggling ambulance service providers in the Medicare Modernization Act of 2003 (MMA). The principal ambulance provisions in the MMA provided desperately needed relief to most but not all of the ambulance service providers receiving the largest payment reductions under the ambulance fee schedule and to ambulance service providers who serve very rural communities. However, the one provision that helps all providers is scheduled to sunset at the end of this year and all of the remaining relief provisions expire within the next few years. None of the relief provisions seem to counter the negative impact that the fee schedule is having on ambulance services revenues.

The ambulance industry is facing a serious financial crisis. Since approximately 40% of persons transported by ambulance are patients covered by the Medicare program, five years of Medicare payment cuts have caused a decrease in ambulance services revenues. This trend is likely to continue.

[edit] Sources

• Centers for Medicare and Medicaid Services
• American Ambulance Association
• Yahoo Finance
• NAICS
• U.S. Census Bureau

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