NW MedStar maintains steady climb
Spokane-based critical-care air transport service faces challenge in coming year
Kim Crompton
Spokane Journal of Business
February 12, 2010

Northwest MedStar, the Spokane-based air ambulance service operated by nonprofit Inland Northwest Health Services, achieved a continuing, gradual climb in patient volume and revenues last year, banking clear of the dark clouds of the recession.

It foresees some potentially choppy air ahead, though, caused by reimbursement shortfalls, rising uncompensated and charity care, and a national trend favoring less-expensive ground transport over air transport when possible.

MedStar transported nearly 3,500 patients last year, and that number has been increasing recently at a rate of around 2 percent or 3 percent a year, says Eveline Bisson, MedStar program director. Also,although financial data for 2009 aren't available yet, the air ambulance service says it has managed to keep revenues ahead of expenses in recent years, enabling it to put some money back into equipment and services.

Of MedStar's growth during the four years since she took over there, Bisson, who was named 2009 program director of the year by the national Association of Air Medical Services, says, "I personally feel very good about it. We spend a lot of time building efficiencies in the system as well as raising our level of quality. As the person managing the program, it's good to know you can accomplish those things."

Last year, to lower MedStar's costs and to help it diversify and expand its services, INHS bought the formerly leased 22,800-square-foot hangar at Felts Field that houses MedStar's main operations, and bought three new, more efficient aircraft and two ground ambulances.

MedStar has 78 full-time employees, up about eight people from two years ago, but its overall work force includes 112 people because it contracts for its pilots and mechanics with Metro Aviation Inc., of Shreveport, La.

Operating out of its main base here and a satellite facility at Richland Airport in the Tri-Cities area, MedStar serves Eastern Washington, North Idaho, Western Montana, and northeastern Oregon. It also provides periodic patient transport, as needed, to Seattle and other locations outside its main service area. It has two fixed-wing aircraft and two helicopters here, one of each in Richland, and a third helicopter here, owned by Metro Aviation, available for backup use.

Last October, it also took over management of AirLink Critical Care Transport, which is owned by the Bend, Ore.-based Cascade Healthcare Community hospital system, and hired a manager to oversee that 90-employee operation, which has two airplanes, one stationed in La Grande, Ore., and one helicopter.

"They asked us to take over management of it. Mostly the hospital wanted the expertise" that MedStar offers, Bisson says. "It's been going well so far."

MedStar was founded in 1994 when INHS was formed collaboratively by Spokane's two big hospital operators to merge a group of formerly competitive, but often money-losing services, including their respective Heartflite and Lifebird air ambulance operations.

Nancy Vorhees, chief operating officer of INHS' Northwest Health Partners division, under which MedStar operates, says the jointly operated air ambulance service has had a few rough years, but that, "Over the span of the 15 years, I think it was a good decision."

Bisson says the purchase of the leased hangar at Felts Field will save MedStar money over the long run and enable it to expand the hangar to accommodate future growth, and she says the three new aircraft it bought cost less to operate, yet are more technologically advanced, than the ones they replaced, she says. Meanwhile, she says, the purchase of the two ambulances enabled MedStar to begin offering ground transport services last July and to discontinue a contract it had here with American Medical Response.

"We're trying to diversify," partly in response to a national trend toward using lower-cost ground transport of critical-care patients rather than air transport when possible, Bisson says. In the ongoing national effort to contain soaring health-care costs, one of the areas coming under greater scrutiny is air ambulance services and the extent to which it's used when ground transport would work just as well, she says.

Still, unlike some urban areas where most of the transports are relatively short distances, and health-care facilities are more clustered, "We always have a uniqueness here because of the distances and terrain" that often make air transport the best option, Bisson says. "There will always be a need for it."

The vast majority of MedStar flights involve moving patients from one hospital to another, with just 7 percent of flights involving on-site patient pickups at locations other than airports or hospital helipads, she says. The average transport distance is 162 miles for MedStar's planes and 68 miles for its helicopters. A medical crew on the ground determines whether air transport is warranted, based on factors such as the patient's condition, the severity of injuries, the distance to a treatment center, and traffic and terrain. MedStar's flight teams consist of a pilot, a registered nurse, and a registered respiratory therapist, but the medical personnel differ depending on the type of specialty care the patient requires.

The medical crews transport a lot of cardiac, perinatal, neonatal, and pediatric patients, as well as people injured in car accidents, falls, and acts of violence, Bisson says.

A recent msnbc.com article on the national air ambulance industry noted the high costs of air transport, which it said range from $12,000 to $25,000, and contribute—in a country with dwindling health benefits and a rising uninsured population—to medical debt that many patients can't pay. The article quoted a critic, the CEO of a national agency that helps patients renegotiate high medical fees, who questioned the justification for the charges and asserted that they sometimes amount to price gouging.

While such allegations against some air ambulance services—typically for-profit entities—might have merit, Bisson says, she notes that the air ambulance industry is "very capital intensive." The fees charged, she says, reflect the high cost of maintaining and operating specially equipped aircraft and ensuring round-the-clock staffing that keeps top-tier pilots and medical personnel ready to depart at a moment's notice.

Industry representatives quoted in the msnbc.com article asserted that the complaints are typical in a health system where everyone expects immediate, expert emergency care, but some patients, insurers, and government agencies are reluctant to pay for it. Also factored into the fees, as the article noted, are the costs of providing care for which the air ambulance services aren't paid.

On average, MedStar is reimbursed 47.5 percent of its charges by insurance companies and the Medicare and Medicaid programs, an INHS spokeswoman says. In 2008, the most recent year for which audited financial information is available, it made $17.4 million in adjustments to patient-service revenues, with those adjustments stemming from charity care, shortfalls in Medicare and Medicaid reimbursement, and write-offs due to patients' inability to pay, she says. "We don't screen for insurance or ability to pay" before dispatching an air transport medical crew, Bisson says. "If they call, we go."

As the msnbc.com articled said, Med-Star is one of a number of air ambulance services around the country that have launched membership programs to help shield families from big emergency air-transport bills not covered by insurance.

By paying $59 per family per year, or $150 for three years, members of MedStar's four-year-old program are guaranteed that those bills will be covered. As of the end of last year, that program covered more than 6,800 households, and more than 18,000 people in all.

Contact:
Kim Crompton
509-344-1263
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All flights are conducted by, and operational control over all aircraft is exercised solely by Metro Aviation, Inc.
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