Key Takeaways
- • Private equity-owned air ambulance carriers charged substantially higher amounts than non-PE-owned competitors, with fixed-wing air ambulance charges approximately $16,500 higher in 2017 among PE-backed operators, according to USC-Brookings Schaeffer Initiative research.
- • By 2017, two private equity firms controlled nearly two-thirds of the national Medicare market for both fixed-wing and helicopter air ambulance transports, demonstrating significant market concentration among financial sponsors.
- • Patients transported by private equity-owned helicopter air ambulance services faced a 55 percent probability of receiving surprise out-of-network balance bills, with average surprise bills reaching $26,507 compared to the industry average of nearly $20,000.
- • Private equity-owned and publicly-traded air ambulance providers demonstrated billed charge growth rates far exceeding other ownership types from 2012 to 2017, establishing a clear pricing divergence linked to ownership structure.
- • Limited in-network contracting prevalence characterized the sector broadly, with approximately two-thirds of air ambulance transports for privately-insured patients occurring on an out-of-network basis as of 2017.
Summary
A white paper published by the USC-Brookings Schaeffer Initiative for Health Policy reveals significant pricing and contracting disparities in the air ambulance market, with private equity-owned carriers commanding higher reimbursement rates and maintaining substantially lower in-network participation than competitors. The research, supported by Arnold Ventures, builds upon earlier analysis documenting market concentration and pricing behavior across helicopter and fixed-wing air ambulance operators.
The findings demonstrate pronounced financial performance differences tied to ownership structure. Private equity-backed fixed-wing air ambulance operators charged approximately $16,500 more per transport in 2017 compared to what charges would have been had they grown in line with non-PE competitors. This differential reflects broader pricing divergence: both PE-owned and publicly-traded air ambulance providers exhibited billed charge growth substantially exceeding that of other ownership categories between 2012 and 2017. By 2017, two private equity firms had consolidated control of nearly two-thirds of the national Medicare market for both fixed-wing and helicopter air ambulance transports, establishing dominant market positions that likely facilitated premium pricing strategies.
Out-of-network contracting patterns amplify financial exposure for patients and insurers. Patients transported by private equity-owned helicopter services confronted a 55 percent probability of surprise out-of-network balance bills averaging $26,507—well above the broader industry average of nearly $20,000. Across the market, approximately two-thirds of air ambulance transports for privately-insured patients occurred outside contracted networks in 2017, creating systemic surprise billing risk. Prior research confirms the air ambulance market is characterized by high, rapidly escalating prices and limited in-network participation, positioning patients at persistent risk of substantial unexpected costs.
The concentration of market control and pricing power among financial sponsors reflects a broader pattern where private equity ownership correlates with elevated charges and reduced insurance network participation, distinguishing this segment from traditional healthcare operators. These dynamics have implications for healthcare cost containment efforts and regulatory oversight of surprise medical billing.
The findings demonstrate pronounced financial performance differences tied to ownership structure. Private equity-backed fixed-wing air ambulance operators charged approximately $16,500 more per transport in 2017 compared to what charges would have been had they grown in line with non-PE competitors. This differential reflects broader pricing divergence: both PE-owned and publicly-traded air ambulance providers exhibited billed charge growth substantially exceeding that of other ownership categories between 2012 and 2017. By 2017, two private equity firms had consolidated control of nearly two-thirds of the national Medicare market for both fixed-wing and helicopter air ambulance transports, establishing dominant market positions that likely facilitated premium pricing strategies.
Out-of-network contracting patterns amplify financial exposure for patients and insurers. Patients transported by private equity-owned helicopter services confronted a 55 percent probability of surprise out-of-network balance bills averaging $26,507—well above the broader industry average of nearly $20,000. Across the market, approximately two-thirds of air ambulance transports for privately-insured patients occurred outside contracted networks in 2017, creating systemic surprise billing risk. Prior research confirms the air ambulance market is characterized by high, rapidly escalating prices and limited in-network participation, positioning patients at persistent risk of substantial unexpected costs.
The concentration of market control and pricing power among financial sponsors reflects a broader pattern where private equity ownership correlates with elevated charges and reduced insurance network participation, distinguishing this segment from traditional healthcare operators. These dynamics have implications for healthcare cost containment efforts and regulatory oversight of surprise medical billing.
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