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Transport charge vs. cost
Transport Charge vs. Cost by Howard M. Collett The 1984 Transport Charge Survey is one of our feature articles this month, beginning on page 16. While rates are tip substantially from last year, one disturbing fact continues to surface: costs outpace charges two to one. With the helicopter industry running at an all-time low, costs couldn't be lower. So, after ]2 years of aeromedical service, perhaps the charge concept is due an e,,aluation by the aeromedical industry. There are a number of factors which claim responsibility for the relative discrepancy in costs and charges. Early programs didn't want to give ambulances the chance to claim that aeromedical programs were cost-prohibitive in relation to ground transport. Therefore, they pegged their charges around the prevailing ground rates. A second factor ending in the same result is that third party payors had only one schedule for "ambulance" which included everything from old stationwagons to hearses. No provisions were considered for aeromedical transport. A third factor was that hospitals were satisfied with simply admitting helicopter patients, as they tended to stay in the hospital longer (16 days on average) and spend more money ($10,000 to $15,000 on average) especially in the higher profit areas of the hospital. The increased patient revenue was purported to offset the amounts not paid by the transport charge. The facts of the matter are that (1)
it obviously costs more for a $600,000 helicopter than it does for a $30,000 ambulance, (2) aeromedical helicopters transport less than one percent of all emergency transports so they are not really a threat to ground services, (3) a substantial number of third-party payors now recognize aeromedical helicopter transport as a legitimate service, and (4) helicopter medical crews provide a higher level of medical care and can provide that care in rural areas presently underserved by advanced life support services, thus justifying their cost. While the first two statements are fairly easy to substantiate, the last two are not, and therein lies the challenge for the aeromedical industry. As stated in both our 1982 and our 1983 surveys, " H o w long can such programs, which provide superior medical care, faster transport times, reduced patient exposure outside a hospital environment, and reduced mortality and morbidity continue to charge rates that do not recover a higher portion of their costs?" The question is certainly begged by the introduction of DRG's (Diagnostic Related Groups) to the equation. In the opinion of Hospital Aviation, every hospital-based helicopter program is responsible to document their impact on patient mortality in order to justify the cost of the system nationwide. Time is of the essence: if we don't act now, the rising public outcry against increasing hospital costs in general will eventually force the closure of these "cost inefficient" services.
Hospital Aviation March 1984
COVER AirEvac of Phoenix, Arizona flew a record 374 patients during the month of March - the highest since the program was begun in 1979. The program's two helicopters, an Agusta 109 and a TwinStar, flew 273 patients, with the Cessna Conquest and 414 picking up the rest. Our cover features AirEvac's Agusta 109, one of four flying for hospitals in the United States.
FEATURES Medical/Legal Issues of Patient Air Transport An administrator's viewpoint
16 1984 Transport Charge Survey How high is up?
18 Relative Risk: The True Measure of Safety Second in a two-part series
DEPARTMENTS 2 Transport Charges vs. Cost An editorial opinion
10 An Uncommon Name for Common Communications Manufacturer profile 11 Program News Changes in the aeromedical scene
12 The Hypothermic Patient Seminars in Aeromedical Transport
23 Calendar What's h a p p e n i n g . . . .'~.~ 1984. HOSPITAL AVIATION (ISSN: 0740-8315) is published monthly by Aviahon Hospdal Consultants Editor,at and execut:ve office at 53 Wesl 1800 SOL:Ih. Orem. U',ah 84058 Telephone 801-226-3060 Howard M. Collelt Edztor and Publisr'er. Subscnpt;on rates Ior U S and possessions $28 per year lot 12 Tssues Canad,an and foreign subscribers add $8 lot aTrma:; oostage Back ssues ava lable a183 oer COPy a r six for $15. payable ~nadvance AppiLcahon toma,t at secoPd class poslage rates is p-,er~dmg al Orerrl. Utah POStmaster, ser'~ address chaqges to above address ErJ tonal contribHIions sboul:J he adclresseJ to the e:.Jltor.al olfice a ll;t be acco nt;arl:od by relum POStage Ed.tonal gu :lchnes and pay,ne~I i~for'nal;on available upon request Adverbs, i)g tales a',.a,iabio upon reqtie£1 ReproJuclloh in w~ele is :)rohlb~te3. pr'olocooya~ 0 of IndiviJual segments Ior research purposes s per"~ltte'J. [)lovde.l DrO,t.'~r creJds are ;riclu:le: ~, Repriclls available LIpOh request
2 HOSPITALAVIATION. MARCH 1984
it obviously costs more for a $600,000 helicopter than it does for a $30,000 ambulance, (2) aeromedical helicopters transport less than one percent of all emergency transports so they are not really a threat to ground services, (3) a substantial number of third-party payors now recognize aeromedical helicopter transport as a legitimate service, and (4) helicopter medical crews provide a higher level of medical care and can provide that care in rural areas presently underserved by advanced life support services, thus justifying their cost. While the first two statements are fairly easy to substantiate, the last two are not, and therein lies the challenge for the aeromedical industry. As stated in both our 1982 and our 1983 surveys, " H o w long can such programs, which provide superior medical care, faster transport times, reduced patient exposure outside a hospital environment, and reduced mortality and morbidity continue to charge rates that do not recover a higher portion of their costs?" The question is certainly begged by the introduction of DRG's (Diagnostic Related Groups) to the equation. In the opinion of Hospital Aviation, every hospital-based helicopter program is responsible to document their impact on patient mortality in order to justify the cost of the system nationwide. Time is of the essence: if we don't act now, the rising public outcry against increasing hospital costs in general will eventually force the closure of these "cost inefficient" services.
Hospital Aviation March 1984
COVER AirEvac of Phoenix, Arizona flew a record 374 patients during the month of March - the highest since the program was begun in 1979. The program's two helicopters, an Agusta 109 and a TwinStar, flew 273 patients, with the Cessna Conquest and 414 picking up the rest. Our cover features AirEvac's Agusta 109, one of four flying for hospitals in the United States.
FEATURES Medical/Legal Issues of Patient Air Transport An administrator's viewpoint
16 1984 Transport Charge Survey How high is up?
18 Relative Risk: The True Measure of Safety Second in a two-part series
DEPARTMENTS 2 Transport Charges vs. Cost An editorial opinion
10 An Uncommon Name for Common Communications Manufacturer profile 11 Program News Changes in the aeromedical scene
12 The Hypothermic Patient Seminars in Aeromedical Transport
23 Calendar What's h a p p e n i n g . . . .'~.~ 1984. HOSPITAL AVIATION (ISSN: 0740-8315) is published monthly by Aviahon Hospdal Consultants Editor,at and execut:ve office at 53 Wesl 1800 SOL:Ih. Orem. U',ah 84058 Telephone 801-226-3060 Howard M. Collelt Edztor and Publisr'er. Subscnpt;on rates Ior U S and possessions $28 per year lot 12 Tssues Canad,an and foreign subscribers add $8 lot aTrma:; oostage Back ssues ava lable a183 oer COPy a r six for $15. payable ~nadvance AppiLcahon toma,t at secoPd class poslage rates is p-,er~dmg al Orerrl. Utah POStmaster, ser'~ address chaqges to above address ErJ tonal contribHIions sboul:J he adclresseJ to the e:.Jltor.al olfice a ll;t be acco nt;arl:od by relum POStage Ed.tonal gu :lchnes and pay,ne~I i~for'nal;on available upon request Adverbs, i)g tales a',.a,iabio upon reqtie£1 ReproJuclloh in w~ele is :)rohlb~te3. pr'olocooya~ 0 of IndiviJual segments Ior research purposes s per"~ltte'J. [)lovde.l DrO,t.'~r creJds are ;riclu:le: ~, Repriclls available LIpOh request
2 HOSPITALAVIATION. MARCH 1984