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Is Competition Driving Medical Flight Costs Up?

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The beauty of a capitalistic country is the opportunity it offers to different businesses and the competition it creates. The competition ultimately leads to lower prices, which the general citizens benefit from. The customer is always the king in a capitalistic scenario. But is this the case when it comes to medical flight companies? This is a question that is now bothering the customers and, to an extent, the government. The spiraling medical flight costs despite rising number of companies offering the same service is a reason to worry. Why are the costs rising?

The Reason Behind Rising Medical Flight Costs

The air ambulance industry has grown at an unprecedented pace. Every state today has several medical flight service providers. Each of these companies charges their patients pretty high. It must be understood that maintenance cost, which is a fixed, is distributed among its customers when they avail medical flight services. Now, imagine that only 20 people opt for a particular medical flight company’s services in a year. The fixed cost now would have to be divided between the 20 customers. The same cost can be divided between 50 people, had so many people opted for the company’s service. The reason these medical flight companies are currently charging high is precisely this: more competition and competed out customers.

Government Regulations Favor Medical Flight Services

It is almost impossible for state governments to regulate or even have a say in the matters of medical flight companies. A federal regulation prohibits them from doing so. The result – medical flight companies do not really need to justify the high prices that they charge.

Also, certain medical flight companies have been busy acquiring several smaller ones, allowing them to have a free hand in deciding air ambulance fees.

Another factor is insurance reimbursements that have remained unchanged since several years now.

 

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