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  • Back during World War Two, a young doctor named R Adams Cowley spent his deployment

  • on the battlefields of Europe, treating patients on the precipice between life and death.

  • He observed, through this experience, that those suffering the medical state ofshock

  • following a traumatic injury were placed on an often certain, but not immediate, path

  • towards death.

  • This exposure to those patients developed his life's goal: he sought to take those

  • on that certain path towards death, and nurse them back to life.

  • He wanted to be able to treat then-untreatable major traumatic injuries.

  • Some years later, in 1960, he neared closer to this goal by opening, in some corner of

  • the sprawling University of Maryland Medical Center, a two-bed unit dedicated to treating

  • major trauma patientsthe first such department in the country.

  • Cowley started with about a 40% survival rate, but as his experience accumulated, and his

  • techniques refined, more and more patients survived.

  • It turned out that the certain path towards death for major trauma patients was not so

  • certain.

  • However, he also observed that even his reliable techniques couldn't reverse the course of

  • death if a patient took too long to get to him.

  • He posited that once someone experienced major trauma, they had a roughly 60-minute window

  • to reach him, or else it was too late.

  • The problem was that, by the time other doctors transferred a patient to Cowley, that window

  • had often passed.

  • The system just wasn't suited for this sort of speed.

  • Therefore, he reinvented the system.

  • First, he lobbied for ambulances to bring trauma patients directly to himor, eventually,

  • other trauma unitsrather than just to the nearest, potentially unequipped hospital,

  • as was standard protocol at the time.

  • Second, he convinced the Maryland State Police to use their helicopters to bring trauma patients

  • to his unitdramatically reducing the average time to care.

  • Cowley dubbed this 60-minute window the Golden Hour and the principles behind it are now

  • the central, guiding light of the Emergency Medical Service systemits purpose is to

  • stabilize, triage, and transport as fast as possible because, according to this Golden

  • Hour principle, faster is always better in trauma medicine.

  • The vast majority of the American population can reach their nearest hospital within the

  • Golden Hour with a traditional, ground-based ambulance system, but not all.

  • This is a map of the US, and these are the areas more than a sixty-minute round-trip

  • drive to the nearest hospital.

  • There are vast swaths of the sparsely-populated American west where ground ambulances cannot

  • fulfill the golden hour principle, especially given the recent spate of closures of unprofitable

  • rural hospitals.

  • In fact, it's not even very difficult to run into this problem.

  • If you were to drive from Denver to Las Vegastwo major American citiesmost of your trip

  • would take place on Interstate 70, which would lead you through the desolate area of the

  • San Rafael Swell.

  • If your car were to crash here, your nearest hospital would be over ninety minutes away

  • in Moab, and this is just on the interstatethe central circulatory system of the US.

  • It's plenty possible to get much, much further from medical care and so, to plug these gaps,

  • to get patients in the most rural areas and dire circumstances to care as fast as possible,

  • that's where the country's air ambulance system steps in.

  • Across the nation, there are some 900 air ambulances stationed at hundreds of bases,

  • each of which expands the number of people able to reach hospital within an hour.

  • Each of these aircraft have the potential to change lives each and every day, and play

  • a big part in many people's worst days.

  • When your life is on the line, every minute counts, so these aircraft save life and limb

  • with every flightright?

  • Well, to a certain person, maybe an executive at an air ambulance company, for example,

  • the 702 words up until now probably all sound correct, but are they really?

  • Everything up until now covered one simple principle: more trauma patients brought to

  • the hospital within sixty minutes equals more lives saved?

  • It can't possibly be that the central tenant of emergency medicine, the Golden Hour principle,

  • is justwrongright?

  • Well, in 2001, an academic review posed that exact question and found, “no large, well-controlled

  • studies in the civilian population that either strongly support or refute the idea that faster

  • is universally better in trauma care.”

  • Essentially, it said that the Golden Hour principle could be true, but despite the fact

  • that the entire EMS system operates on the collective assumption that it is true, we

  • just didn't know for sure.

  • So, in response, researchers sought an answer.

  • Plenty found that the answer was yesas one would expect, faster transport to the

  • hospital does improve survival outcomesbut plenty othersdidn't.

  • This one found that, “the time factor involved in managing and transporting hypotensive penetrating

  • injury victims directly to a regional trauma center does not appear to be related to an

  • adverse outcome.”

  • This one concluded with, “no prehospital time less than 90 minutes exerted a significant

  • adverse effect upon survival,” while this one found, “no significant difference in

  • survival after traumatic injury when the 8 minute ambulance response time criteria was

  • exceeded.”

  • Similar results, failing to find a statistically significant link between total pre-hospital

  • time and survival outcomes, were found in this study, and this one, and this one, and

  • this one, and countless more.

  • Twenty years onwards from that academic review, the only certainty here is uncertainty: there

  • is no scientific consensus on whether the Golden Hour is truly relevant today.

  • Uncertainty is fineit's part of the scientific processbut the entire American air ambulance

  • industry is built on a collective, unverified assumption that the Golden Hour principle

  • is indeed true.

  • However, since we're dealing with assumptions, let's tackle another one.

  • When you think of air ambulances, you probably imagine a flight from here to here: scene

  • to hospital.

  • Of course, that's what you see in the movies, but these sorts of flights only account for

  • about a third of air ambulance trips.

  • The vast majority of their business involves hospital to hospital transfers.

  • You see, the trauma care system that Doctor Cowley innovated evolved into a nationwide,

  • hierarchical network.

  • Essentially, there are five levels of trauma centershospitals certified to treat patients

  • with major traumatic injuriesand as you go up in the levels, the centers become more

  • advanced, and less widespread.

  • Levels V and IV mainly deal with stabilization and initial evaluation prior to transport

  • to a higher level center, while Level III centers will have on-call surgeons who could

  • start to resolve simpler trauma cases.

  • Level II centers have surgeons with 24-hour immediate availability, rather than just on-call,

  • in addition to certain specialists.

  • Then, those most advanced, Level I centers have everything conceivably necessary for

  • any trauma case including specialists across all fields, and the ability to treat a case

  • all the way from initial presentation through rehabilitationwhich can be a multi-year

  • process.

  • Level I trauma centers are incredibly expensive to run, and therefore need a critical mass

  • of patients to cover costs.

  • Consequently, it's very possible to be more than 600 miles or 950 kilometers from one

  • while in the lower 48, or 2,000 miles or 3,200 kilometers from one while in Alaska.

  • Due to this potential distance, a major trauma case outside a major city would typically

  • go first to a Level III, IV, or V trauma center, which are far more commonplace, where they'd

  • be stabilized and evaluated to determine whether they need to be transferred to a more advanced

  • facility.

  • So, someone in a vehicle crash in the San Rafael Swell on I-70 in Utah would likely

  • first go to the Moab Regional Hospital, which is a Level IV center.

  • If the doctors and nurses there determined the patient needed a higher level of care,

  • they would be transferredin this case to St. Mary's Hospital in Grand Junction, Colorado,

  • which is a Level II center.

  • Then, if that hospital determined the patient had such complex and specialized injuries

  • that even they couldn't handle it, the patient would likely be transferred to Denver Health's

  • Level I trauma center.

  • Since each of these transfers would take hours by ground, the decision would almost certainly

  • be made, for major trauma cases, to use an air ambulance.

  • This is the bread and butter of the air ambulance business and surely this saves lives, right?

  • Well, yes and no.

  • In one study of major trauma patients suffering from certain high-mortality injuries, patients

  • admitted to Level II centers had a 29.7% mortality rate, while those admitted to a Level I center

  • only died 25.4 % of the time.

  • More advanced trauma centers do save more lives, and therefore conventional wisdom would

  • assume that transfers to higher level centers save lives, but conventional wisdom almost

  • always misses the nuance of a situation.

  • According to another study, some quarter of adults and half of children transferred to

  • Level I trauma centers are brought there unnecessarilyin other words, they've been subject tosecondary

  • overtriagewhere the more advanced center ends up discharging them after completing

  • treatment that a less advanced center would have been plenty capable of.

  • Now, a certain level of secondary overtriage is to be expected and even encouragedafter

  • all, it's better to be safe than sorrybut again, we need that nuance.

  • For an overtriaged patient, they would have survived if they had stayed in a Level III

  • center, for example, and they did survive when they ended up in a Level I center, so

  • the health outcome was the same, but for those patients transferred by an air ambulance,

  • they received something else: an absolutely massive bill.

  • A conservative estimate puts the average price of an air ambulance flight in the US at $27,900.

  • Others put that figure even higher, well into the 30 or 40 thousands, meaning it's very

  • possible and even common for someone to be charged more for a quick helicopter ride to

  • or from the hospital than they make in a year.

  • Another counterargument, though: a human life, to the holder of that life, is essentially

  • invaluableany cost to save it is worth itbut the problem is not the cost, it's

  • the price.

  • The cost for air ambulance companies to operate a given flight, according to the companies

  • themselves, is somewhere between $6,000 and $13,000.

  • That shouldn't be possibleas in, quite literally, the rules of economics say that

  • that gap between cost and price shouldn't be possible, because in a normal free market,

  • for normal products, competition would drive down prices far closer to costs since lower

  • prices increase demand, and companies can increase profits with greater market share,

  • but the American air ambulance market is very far from normal.

  • Every product in the world can be mapped onto a graph that looks like this: price on the

  • y axis, quantity purchased on the x.

  • This is what a normal product looks likeas price goes down, quantity purchased goes up.

  • There are some exceptions to thisfor example, certainly luxury goods plot like this on the

  • graph, where higher prices actually stimulate higher demand, to an extentalthough almost

  • no product will look like this.

  • This, however, is the relationship between price and demand for air ambulancesas price

  • increases, it has zero impact on demand.

  • It's easy to understand why: the people purchasing and paying for air ambulance flights

  • have no agency over whether or not to do so.

  • The decision to use an air ambulance is made by first responders or doctors, not the often-unconscious

  • patient, and so there is a complete lack of market forces working to lower the price.

  • When the free market isn't working to regulate the allocation of goods and services into

  • the most societally advantageous configurationwhich is this case would be the greatest possible

  • availability of air ambulances at the lowest possible priceseconomists would describe

  • that as a market failure.

  • In cases of market failure, even the most staunchly libertarian economist would tend

  • to agree that the only solution, at that point, would be external interventiontypically,

  • by the governmentand so this massive, critical industry charging vulnerable people massive,

  • crippling prices can't possibly be completely unregulated, right?

  • Wrong: in fact, not only is the air ambulance industry not regulated, but it seemingly can't

  • be.

  • You see, back in 1978, Congress passed the Airline Deregulation Act, ending the government's

  • ability to regulate the fares of airlines.

  • This led to a dramatic decrease in airfares and a dramatic increase in flightsessentially,

  • it paved the way for the US to become the world's largest aviation marketbut when

  • it sought to deregulate airlines, that truly meant all airlines.

  • Through the years, as various states have attempted to fix the market failure of the

  • air ambulance industry, providers have successfully argued in court time and time again that because

  • they are technically airlines, and because the Airline Deregulation Act prevents states

  • from regulating airfares, states therefore cannot regulate the prices air ambulances

  • charge.

  • There is truly no limit to what they can charge.

  • But, wait.

  • There is another, unique market force in the American healthcare industry that could solve

  • this problem: that of insurance, right?

  • You see, most insurers in the US have a network of providers that they cover and, if a patient

  • uses an out-of-network provider, they are charged a far higher rate, or are subject

  • to an annual spending cap.

  • In non-emergency circumstances, it's often possible to find an in-network provider, and

  • many states and recently the federal government too have passed legislation limiting out-of-network

  • bills for emergencies, but of course, thanks to the Airline Deregulation Act, those don't

  • apply to air ambulances.

  • In the US, some 77% of air ambulance flights are billed out-of-network, meaning patients

  • are on the hook for all, or at least the vast majority, of those thirty or forty or fifty

  • thousand dollar air ambulance bills.

  • This is, once again, a symptom of market failure.

  • For most medical services, insured patients have the ability to chose which provider they

  • go to, they have the ability to chose to go to an in-network provider, which is a market

  • force that pushes providers to accept as many types of insurance as possibleif they didn't,

  • they would lose businessand those insurers have the scale to negotiate prices down.

  • With air ambulances, though, since patients have zero ability to chose which provider

  • they use, or even whether they use one at all, there are no market forces pushing providers

  • to bring more insurers in-network.

  • In fact, they often get paid more from out-of-network patients, meaning they they not only lack

  • incentive to bring insurers in-network, but market forces are pushing them to minimize

  • the number of carriers in their network.

  • Air ambulance providers and, more specifically, the private equity firms that now own the

  • majority of them, have figured out just how exploitable this market failure is.

  • Since 2000, the number of air ambulances in the US has more than doubled to nearly 900,

  • and the average annual flight hours per helicopter have dropped from a high of 600 in 2003 to

  • almost 450, as these companies further saturate the market.

  • In the same time period, average prices have more than tripled.

  • It's tough to get a good gauge of just how much these companies are profiting on the

  • plight of Americans in the most vulnerable moments of their lives, largely because almost

  • all the major players in the industry are are now owned by private-equity firms, and

  • therefore don't report their financial results.

  • What's clear, though, is this: in 2017, according to one study, air ambulances owned

  • by private-equity firms charged about double of what those owned by hospitals or non-profits

  • did.

  • The costs to operate non-profit and for-profit air ambulances are not dramatically different,

  • so the only reasonable conclusion is that these private, for-profit air ambulances are

  • pocketing thousands upon thousands of dollars in profit per patient.

  • There is nothing stopping this industry from charging higher and higher ratesnot market

  • forces, not regulation, nothingand so these private equity companies, having realized

  • this, will keep jacking up prices