Emergency Medical Services During COVID-19: Observations and Opportunities
In recent weeks, emergency medical services (“EMS”) and ground medical transportation operators have been on the front lines in the battle against COVID-19. Predictably, given the massive disruption that the virus has imposed on the healthcare system, the medical transportation industry has been upended. Understanding the challenges that medical transport companies are experiencing, planning how to navigate and emerge successfully, and looking ahead to areas of opportunity within the industry will position leading companies to succeed going forward.
In recent days, MHT Partners has had conversations with a number of EMS companies and investors in our network, representing large multistate ambulance companies, regional and local operators, vendors, and private equity groups. In all of our discussions, a handful of key observations have emerged as we look to weather COVID-19 and assess its impact on the industry:
- First, the COVID-19 pandemic has significantly impacted medical transportation companies’ performance. Ambulance operators in every jurisdiction have noted that volumes for all classes of service are down approximately 25%. For emergency transports, fewer road miles, widespread workplace closures, and lower hospital utilization rates for non-COVID-19 conditions are depressing volumes. Individuals are largely avoiding hospital environments if they can help it, viewing them as potential COVID-19 hotbeds. Inter-facility and non-emergency transports are down as well, due to isolation protocols within many skilled nursing and assisted living facilities as well as widespread postponements or cancellations of elective procedures.
- From a labor supply perspective, paramedics and EMTs on the front lines have been exposed to COVID-19 at greater rates than the general population. And in areas such as New York, the ranks of first responders have been thinned due to confirmed cases or self-imposed quarantines. Even in less-populated areas with lower infection rates, where medics and EMTs may perform work for multiple municipalities or private agencies, efforts to limit the mixing of employee pools have made staffing more difficult.
- On the bright side, government and commercial payors have continued to function as usual, maintaining their reimbursement commitments to ambulance operators.
- EMS agencies have also performed better on a relative basis than many other segments of the economy, as they have been deemed essential services.
- Lastly, ambulance companies have access to emergency funds provided by the federal government just like other businesses.
For these reasons, all signs point to medical transportation companies emerging from the coronavirus pandemic in a position of strength.
In fact, many industry participants are tracking ways in which COVID-19 may accelerate the adoption of emerging operating models and technology within medical transportation. Most notably, though The U.S. Department of Health and Human Services (“HHS”) has delayed the pilot of its Emergency Triage, Treat, and Transport Model (“ET3”), The Centers for Medicare & Medicaid Services (“CMS”) has temporarily allowed the flexibility to transport Medicare beneficiaries to alternative locations for the duration of the COVID-19 emergency. Operators are also watching for relaxed treatment-in-place (so-called “treat-and-release”) and telehealth protocols. Investors with a close eye on emerging trends within EMS include Frist Cressey Ventures, which last week announced a partnership with Ready Responders, a technology-enabled provider of in-home urgent care working with EMTs and paramedics.
MHT Partners, a leading healthcare services investment bank, is very active in the medical transportation industry and will keep its finger on the pulse during this global pandemic. If you would like to learn more about MHT’s healthcare services advisory practice, please e-mail Alex Sauter (firstname.lastname@example.org) or Taylor Curtis (email@example.com).