Air Medical Group Holdings Inc., which controls one of two air ambulance services in Hawaii, is planning to buy out its only competition. This could likely result in a monopoly of medical transportation in the islands. The firm currently owns Hawaii Life Flight and is intending to buy American Medical Response, which owns AMR Air Hawaii.
Reduction in Competition Likely to Increase Prices
The two companies are signing a $2.4 billion deal in which AMR Air Hawaii and Hawaii Life Flight will be controlled by Air Medical Group Holdings Inc. This means there’s no more competition for the company and this will likely increase the cost of air ambulance services in Hawaii.
According to state Rep. Angus McKelvey, this new acquisition can lead to serious ramifications in which healthcare consumers will be put at a disadvantage. Air ambulance is a lifeline service for residents in the islands and those who need to be transported by planes and helicopters are often in critical situations. If there’s any interruption in that lifeline it could be highly devastating for families.
How Expensive Could Air Ambulance Services Get
Hawaii Life Flight was on the receiving end of a lawsuit filed last year by Kaiser Foundation Health Plan. The lawsuit claimed that the air ambulance company was charging exorbitant fees for their services and cost significantly higher than services rendered by AMR Air Hawaii.
There’s a difference of several thousand dollars between the fees charged by the two services for similar flights, with AMR Air Hawaii’s fees being much lower. In December 2013, an emergency flight from Hilo to Oahu by Hawaii Life Flight cost a total of $70,580. Their base rate for the flight was $16,411 with a $219 charge for each mile. This means there was a mileage cost of $54,139.
On the other hand, AMR Air Hawaii had been charging $14,000 for base rate and $25 for each mile. So the same flight would have cost around $20,000.