A rise in insured people will boost revenue, but preventive healthcare will soften demand
Los Angeles, CA (PRWEB) April 15, 2013
The rising importance of ambulance services in the healthcare system has fostered revenue growth for the Ambulance Services industry over the five years to 2013. During this period, revenue is expected to increase at an average annual rate of 3.8% to $13.9 billion, including growth of 5.9% in 2013. “Demand accelerated during the recession as an increasing number of individuals lost private insurance coverage and waited until health issues escalated into emergency situations,” says IBISWorld industry analyst Anna Son. While this factor boosted demand, many companies were unable to collect full payment from the uninsured. Profit (earnings before interest and taxes) suffered as a result, falling from 8.3% in 2008 to 7.5% in 2013. During the five years to 2013, the number of ambulance service companies has increased at an annualized rate of 0.1% per year to 3,296. In addition, many government municipalities have begun outsourcing emergency services to private companies. The escalating number of public-private partnerships has created incentives for companies to consolidate. Larger companies can better negotiate with fire departments and other government agencies for contracts. The changing public-private landscape is forecast to continue in the years ahead, spurring additional consolidation. In the five years to 2018, the number of operators is projected to decline 0.5% per year on average to 3,208.
Over the next five years, the growing number of individuals aged 65 and older will continue to sustain industry growth as older people face more medical issues than younger groups. About 35.0% of industry revenue stems from Medicare payments, thus illustrating the industry's reliance on demand from senior adults. This reliance, however, makes the industry vulnerable to changes in Medicare reimbursement rates, which have been lower than the cost of providing services during the past five years. In the five years to 2018, the reimbursement level is forecast to remain relatively flat. In addition, the declining number of uninsured individuals is projected to reverse in 2014, when healthcare reform expands insurance coverage. As more people gain insurance and use preventative healthcare services, general demand for emergency care will slow slightly. This factor is expected to restrain revenue growth after a brief spike in 2014. Still, revenue is forecast to grow over the five years to 2018.
Market share concentration in the Ambulance Services industry is low. The top four private providers are expected to account for 25.5% of industry revenue in 2013. The industry is highly fragmented, with about 3,296 private, public and not-for-profit service providers. According to Son, there are a limited number of regional ambulance providers and only two national ambulance providers. In addition to the organizations that are included in this industry, fire departments also provide ambulance services; combined fire protection and ambulance or rescue services are classified in the Fire Protection industry. For more information, visit IBISWorld’s Ambulance Services in the US industry report page.
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IBISWorld industry Report Key Topics
The industry includes private and municipal operators that provide transportation of patients by ground or air, along with medical care. These services are often provided during a medical emergency, but they are not restricted to such instances. The vehicles are equipped with lifesaving equipment operated by medically trained personnel.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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