Why do ambulance rides cost so much [in the US]

Factual Questions
1

I have heard people quoted $2000 for a trip that was less than 5 miles. It makes no sense.

A brand new ambulance made out of a passenger van like a Ford E350 is about 65k.

You can probably get a good 10 years out of a vehicle like that if you buy it new. You probably have resale value after the vehicle is old too, and 10 years is a conservative estimate on how long a new car will last. So depreciation and saving to buy a new ambulance shouldn’t come to much more than 5-8k a year. I have no idea how many trips an ambulance makes in a year, but even if it is only 3 a day that is 1000 a year, so $5-8 per patient to help pay for the vehicle. Even if you double that and replace them every 5 years, that is about 15-20k a year for a new vehicle. Spread over 1000 people a year that is still $15-20 a person.

Fuel and vehicle maintenance should be a few grand a year, again maybe $6 a person if 1000 people make trips in an ambulance a year.

EMTs and ambulance drivers probably only make $15/hr or less (sometimes a lot less sadly considering the work they do). So they aren’t highly paid people. Granted you have to pay for downtime for when the ambulance isn’t running but if you assume 2 EMTs and a driver are making $45/hr total it shouldn’t be that much to pay for labor considering most rides are an hour or less. Assuming you pay for 2ish hours labor for everyone for a 10 minute trip that is probably not much more than $100. But I don’t really know. Evenso, EMT, paramedic and driver wages can’t explain the high costs.

Most of the drugs in an ambulance are generic off patent meds. And the medical supplies don’t look like they’d be that expensive (oxygen tanks, pulse oximeters, bandages, etc) I have no idea what all is in an ambulance but I’m assuming most of the medical supplies cost under 30k total for everything. A defibrillator or an ekg machine costs a grand or more each, but you’d assume most other medical supplies are far less than that.

So fuel, depreciation on the vehicle, ambulance worker wages, medications, medical supplies, etc. all seem like they should have much more affordable prices, like $200-400 for a trip.

So why does it cost so much? I’m sure I’m missing something.

I’m assuming most of it is because about 50% of the time the person getting a ride doesn’t actually pay so the cost is passed onto those who do, and the $2000ish price is the price which is un-negotiated? That is all I can come up with.

2

Why do ambulance companies charge so much? Because they can. In most areas there is a monopoly or duopoly of companies, so without competition they can charge as much as medical insurance companies are willing to pay. It’s not like you can do without one when you need one.

3

When you have no insurance you have no option but to pay, I bet they don’t charge insurance companies as much.

In Australia you can pay an annual fee and never have to pay for ambos, does the US have a similair scheme?

4

I never want to take up for private ambulance companies but their overhead does add up well over the cost of the vehicle alone. EMT’s and paramedics don’t get paid much but they have to be paid to sit around when they are on call and that cost is the roughly the same whether it is a slow night or a mini-apocalypse hits an area.

The ambulance company doesn’t collect anything from a significant portion of their patients either for lots of reasons. The patient may die (people having a great day generally don’t need ambulances) and it is hard for them to collect anything from an estate of a dead person in time before all payments are closed.

Some ambulance companies aren’t very well integrated with the various insurance companies they have to deal with either even if their patient has insurance (that isn’t something they can delve too deeply into when someone is unconscious from a head on collision). Just dealing with every possible insurance scenario that they have to take takes significant back office staff with lots of expertise and infrastructure like computer systems.

I took an ambulance ride once and thought the insurance company took care of everything just like they did with the hospital. That wasn’t the case and I got a multi-thousand dollar bill 3 years later. My insurance company had changed since then and I didn’t have a way to work it out so I had to tell the ambulance company just to eat the bill because acknowledging it at all would not have been in my best interest and I am not interested in correcting other people’s long overdue clerical mistakes.

I hear from people in the business that type of thing is extremely common. They only get money from a portion of their patients so they greatly inflate the bill to those that will pay to cover everyone else. It is the same thing that happens with emergency room medicine.

5

I’ve read that the medical equipment can be very expensive–on the order of several hundred thousand dollars. It sounds crazy to me but the same kind of insane economics seems to pervade the entire medical industry so it’s not really surprising.

6

Volunteer ambulance service, driver and two other people, 25 miles, $750.

7

I should point out that I was talking about private ambulance companies. They aren’t just trying to cover costs. Their purpose is not just to serve the ambulance need but also turn a profit for the people that own them while ideally expanding their operation.

I am not sure of the percentages but a whole lot of the U.S. uses a different ambulance model that is run either by a professional fire department or staffed by volunteers. I grew up in a town that had both a volunteer fire department and volunteer ambulance service. The volunteer services work at least as well as the private ambulance companies in my experience and probably better. The ambulances and other lifesaving equipment like the Jaws of Life were bought through donations and fundraisers but the staffing was free 24/7. The volunteers even had to pay money themselves to go through the certification process for EMT or Paramedic. The nearest hospital at all was just a smaller clinic about 20 miles away and the nearest full-service hospital was about 40 miles away but we had 24/7 ambulance coverage just based on volunteers alone. The cost for a ride, if you needed one, was always $0 and I believe that is a fairly common model although some volunteer services may enforce a nominal charge high enough to discourage people from using it for non-emergencies.

8

What we do have is in some areas (but I don’t think all) you can buy a membership for about $50-100 a year for your household. If you need emergency care you are covered under the fee. That is offered in some cities and counties

I don’t know exactly how insurance works with ambulances. With the PPACA there is a list of 10 things that insurance must cover, I would assume emergency services and ambulances are among them but I wouldn’t be surprised if insurance has ways to avoid paying.

With emergency services costs growing out of hand (ER and ambulance) I wonder if we will have to go back to the old model of funding them with taxes.

9

According to this it is about 300k to fully equip an ambulance.

http://www.tampabay.com/specials/2011/interactives/ambulance-costs/

That seems high but ok.

10

I am a small ‘l’ libertarian in general but I still think ambulances should fall under essential government functions either paid for through taxes or run under a quasi-government volunteer model. My experiences with private ambulance companies has been less than optimal. It isn’t that the service itself is bad, it is that the backend billing is exorbitant to nonsensical. A well-run group of volunteers can do at least as good a job with the service because you know they really want to be there but that model generally only works in smaller communities. Government run ambulances can be integrated within the Fire Department on any scale (the same people can do double-duty if needed) so it can be a good use of resources as well.

11

Don’t fixate on the distance, its the smallest part of most ambulance bills.

Make it 5, remember ambulances are driven far harder than any regular car. You also need to have spare ambulances so if one is down for maintenance you still have units available.

Back in my day those ford cargo van ambulances were getting about 10MPG and had dual tanks. It was not unusual for us to use 15-20 gallons in a shift. We also idle alot at scenes for powered equipment as well as to run heat/AC as needed for patient comfort.

This is a big one. You have to have ambulances available, the efficiency that many businesses take for granted are not options for emergency services. There is also no “sales force” making business happen. Sometimes you are just sitting around for 3 days avoiding saying the “B” word*, sometimes 2 giant buildings get hit by airliners.

the equipment has to be maintained, replaced fairly often, and you have to keep spares. So for 10 ambulances and a $1K EKG/Defibrillator unit you have to keep 3-4 extras in case one is lost, damaged, or fails.

On average plan for an ambulance making 3-4 calls a day, but they have to plan for more like 1-2 a day to make sure to offset the slow days, the uncollectable, and the inevitable disasters.

12

The only issue with that comes from the taxpayers. Incorporating ambulance services into the fire department, for a city of any scale, creates several hundred new fire department employees with similar wage and benefit packages. Private ambulance companies usually pay much less than fire departments

13

I wouldn’t be surprised if ambulance ride prices are set intentionally high to prevent people from using them unnecessarily, especially when they’re run by the city or county governments.

Think about it this way… if ambulance rides were free to the ER, how many people would just call the ambulance rather than hop on the bus or whatever to get there for non-critical problems?

14

This doesn’t seem to happen in the UK, where emergency ambulances are provided on the NHS.

15

Here is one town that was considering starting an ambulance service in its fire department (at a startup cost 0f $500-600K) precisely because “The city would make money by collecting the $200 to $500 fee for providing the ambulance call.”

The article also mentions the need for liability insurance. No cost figure is given, but presumably it’s high.

16

Is there a market for used ambulances? Who buys them? Do discount, startup, or wannabe ambulance companies buy old vehicles from bigger companies? Are they in demand by movie or TV studios for prop vehicles? Do people convert them into mobile weather stations or something like that?

17

The UK ambulance service provides paramedic and non emergency service that is free at the point of delivery. Each region has its own ambulance trust, which has a legal obligation to provide a service to a laid down standard and to remain within budget.

“The North West Ambulance Service (NWAS) receives 1.1 million emergency calls each year, attending more than 952,000 incidents. On average, paramedic services cost £230 per call out based on 2010/11 figures.” [My bolding].

18

Ghostbusters?

19

Exactly, and Medicare has very specific rules about what can be charged and under what circumstances.

I’ve never heard of such a thing here. It would be a good idea for older folks.

20

Is there a market for used ambulances? Who buys them? Do discount, startup, or wannabe ambulance companies buy old vehicles from bigger companies?

I used to work for a private ambulance company in Southern California and we had one older unit that was used for transfers - non-emergency work, but all the first line units were 5 years older or less. I heard that the older cars were mostly exported to Mexico.