Key Takeaways
- • Private equity-owned air ambulance carriers command significantly higher reimbursement rates and exhibit substantially higher out-of-network prevalence compared to other ownership structures, creating elevated surprise billing risk for patients.
- • Two private equity firms controlled approximately two-thirds of the national Medicare market for both fixed-wing and helicopter air ambulance transports by 2017, demonstrating pronounced market concentration among PE-backed operators.
- • Surprise out-of-network bills from air ambulance transports average nearly $20,000, with potential bills reaching $30,000–$45,000 in some cases, affecting roughly 40% of helicopter air ambulance rides and approximately two-thirds of privately-insured transports in 2017.
- • Billed charges and growth rates among private equity and publicly-traded air ambulance providers far exceeded those of other ownership types from 2012 to 2017, suggesting PE ownership as a material driver of price escalation in the sector.
- • PE-owned air ambulance operators strategically maintain out-of-network status to capture higher out-of-network reimbursements and impose balance bills on patients, creating a dual revenue extraction model that exceeds payment levels received by non-PE competitors.
Summary
A research initiative between USC Schaeffer Center for Health Policy & Economics and Brookings Institution documents material pricing and contracting disparities in the helicopter air ambulance market, with private equity ownership emerging as a primary structural driver of elevated costs and surprise billing. The analysis builds on prior research identifying concentration of high charges among PE-backed and publicly-traded carriers, demonstrating that two private equity firms alone controlled nearly two-thirds of the national Medicare air ambulance market by 2017 across both fixed-wing and helicopter segments.
The study reveals that PE-owned air ambulance operators receive substantially higher allowed amounts from insurers and maintain systematically higher out-of-network prevalence compared to carriers with alternative ownership structures. This contrasts sharply with operators not owned by private equity or public companies, which nonetheless show elevated pricing relative to other healthcare specialties. The research finds that surprise out-of-network bills average approximately $20,000 per transport, with documented cases reaching $30,000 to $45,000. Roughly 40% of helicopter air ambulance rides result in potential surprise bills, and approximately two-thirds of privately-insured air ambulance transports in 2017 were out-of-network.
From 2012 to 2017, both the absolute level and growth trajectory of billed charges among PE-backed and publicly-traded air ambulance providers substantially exceeded those of other ownership categories, indicating that private equity ownership correlates with aggressive pricing strategies and market expansion. The research, supported by Arnold Ventures, represents part of the USC-Brookings Schaeffer Initiative for Health Policy, which applies rigorous economic analysis to inform healthcare policy debates with practical, evidence-based recommendations.
The study reveals that PE-owned air ambulance operators receive substantially higher allowed amounts from insurers and maintain systematically higher out-of-network prevalence compared to carriers with alternative ownership structures. This contrasts sharply with operators not owned by private equity or public companies, which nonetheless show elevated pricing relative to other healthcare specialties. The research finds that surprise out-of-network bills average approximately $20,000 per transport, with documented cases reaching $30,000 to $45,000. Roughly 40% of helicopter air ambulance rides result in potential surprise bills, and approximately two-thirds of privately-insured air ambulance transports in 2017 were out-of-network.
From 2012 to 2017, both the absolute level and growth trajectory of billed charges among PE-backed and publicly-traded air ambulance providers substantially exceeded those of other ownership categories, indicating that private equity ownership correlates with aggressive pricing strategies and market expansion. The research, supported by Arnold Ventures, represents part of the USC-Brookings Schaeffer Initiative for Health Policy, which applies rigorous economic analysis to inform healthcare policy debates with practical, evidence-based recommendations.
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