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Health Matters
November 7, 2019

Private Equity Investment in Ambulance & Medical Transportation, Part 1: Why Investors See Opportunity

MHT Partners  | Healthcare Investment Bank

As private equity investment in healthcare services has boomed over the past decade, select funds have turned an eye toward one of the most important and challenging areas of healthcare services: ambulance and medical transportation. Private equity’s foray into medical transportation has not been without controversy, but MHT Partners believes that private investment can be an agent of positive change in the industry and create value for a wide array of stakeholders with a vested interest in a reliable, high-quality medical transportation system. Over a series of blog posts in the coming weeks, we’ll delve into why private equity is interested in medical transportation, how private equity can help improve care, and what the future holds for the industry.

Private investors’ interest in medical transportation is spurred by the industry’s shared characteristics with other attractive, investable areas of healthcare services:

  • First and foremost, the industry is growing. According to IBIS World, the U.S. ambulance services market is expected to grow at a rate of approximately 3% per year in the coming decade — at or above growth in the broader economy. Growth is driven by the aging population, as the oldest age groups disproportionately utilize ambulance services.
  • Second, the industry is tailor-made for operational improvements. The majority of the industry is composed of public providers or small private companies, most of whom have had difficulty implementing efficient operational processes to enhance utilization, expand reach, and manage cost. In an industry where seconds matter, mature operations are paramount for providing appropriate care.
  • Third, ambulance services are fragmented, with no clear market leaders even in major metropolitan areas. Fragmentation is a dynamic that plays well for private equity investors, who in many cases seek to acquire multiple businesses to create scale and efficiency in a targeted geography.

Despite some attractive attributes, the medical transportation industry possesses a multitude of unique challenges that face operators and investors:

  • Margins are razor thin, driven by reimbursement rates from government payors that haven’t kept pace with the cost of operations in recent years.
  • It is difficult to hire and retain high-quality paramedics and EMTs in many regions.
  • Private companies must coexist with municipal providers, who in many cases can afford to operate at a loss.
  • Owners must manage a universe of stakeholders that includes patients, populations, cities and towns, employees, hospitals, and nursing homes (to name a few).

As a result of these challenges, it is difficult to implement a successful strategy as a private medical transportation company. Nevertheless, experienced operators who can manage partnerships, costs, and logistics are poised to capture market share and create value. Influential private companies in the space include American Medical Response, by many measures the largest private ambulance company in the U.S., which is backed by KKR & Co., itself one of the largest private investors in the world. In the middle market, financial sponsors such as Alvarez & Marsal Capital Partners (Patient Care Logistics Solutions), Enhanced Healthcare Partners (Priority Ambulance), and New Heritage Capital (Covalent Health) have made investments in medical transportation successfully, in many cases expanding access and improving care for the populations they serve.

MHT Partners, a leading healthcare services investment bank, believes that private investment can be a force for good in the ambulance and medical transportation industry, and that companies providing excellent care with an eye toward all stakeholders in the value chain are poised for success. If you would like to learn more about MHT’s healthcare services advisory practice, please e-mail Taylor Curtis ( or Alex Sauter (

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