How Much to Save My Life?? An estimated 40 million ambulance trips, at a cost of

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How Much to Save My Life??

An estimated 40 million ambulance trips, at a cost of $14 billion, are provided each year by nonprofit entities such as local fire departments and by for-profit companies each year in the United States. Sensing profit-making opportunities, in recent years for-profit companies have significantly expanded their operations, often taking over from nonprofit operators. And big investors are betting that ambulance services will generate significant profits: two private ambulance providers were recently bought by investors, one for $3 billion and another for $438 million.

Charges for an ambulance ride vary wildly across the country, from several hundred dollars to tens of thousands of dollars. The price may depend on many things other than the patient’s medical needs, from the level of skill of the ambulance team onboard to the distance traveled, or in some cases whether a friend or relative rides along (which can add hundreds of dollars to the cost). While it’s impossible to know the total amount that Americans are paying for ambulance services, Medicare, the federally administered health insurance program for Americans age 65 and older, has seen its spending on ambulance services explode, from $2 billion a year in 2002 to nearly $6 billion in 2013.

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What accounts for the extreme variation in the cost of ambulance services?  How are these services able to charge thousands of dollars, regardless of whether an ambulance is actually needed? Assume you needed an ambulance ride. What factors would determine yourwillingness to pay for the ride?

Explanation / Answer

1. What accounts for the extreme variation in the cost of ambulance services?  

Ambulance service providers claim that difference in services provided within ambulance- For example a skilled doctor, advanced medical kit along with life support equipments is charged higher as compared to a basic ambulance service which may not have all these.

Also, If patient is to be accompanied by a person, then also Ambulance service is charged higher.

It also matters whether ambulance service provider is for profit or non profit company.

Distance is also a factor in charging differently.

2. How are these services able to charge thousands of dollars, regardless of whether an ambulance is actually needed? Assume you needed an ambulance ride. What factors would determine yourwillingness to pay for the ride?

There is no proper guideling for abulance service providers regarding pricing policy. There is no price ceiling. Also the fact that during emergency patient may not care for ambulance cost. Insurance providers are not covering this cost, hence there is no pressure on pricing.

As stated earlier life is more precious than money. Hence in emergency I may not care for cost. However, If I have a choice I will consider a following aspects:

a. Cost

b. Facilities on ambulance

c. Distance to hospital

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