COST ANALYSIS OF NEW AMBULANCES IN THE HEALTHCARE INDUSTRY

COST ANALYSIS OF NEW AMBULANCES IN THE HEALTHCARE INDUSTRY

1. Introduction

Cost Analysis of New Ambulances; Preliminary analysis using the Kim et al. (2006) probit model broadly indicates that within-the-industry responses to OSHA regulations and within-the-industry countervailing pressures are more relevant for the state of utilization of new technologies and the state of facility engagement in enhancing productivity. Ambulances are purchased by publicly owned or civilian facilities in the presence of poor public ambulance services or constrained organ transfer in the service areas, usually at the decision-makers’ discretion.

Expenditures on ambulance purchases can be currently expensed as they are incurred and recognized by location in a two-way fixed effects model. The paper is organized in two main parts. The list of establishment level regulatory variables and the description of the regional characteristics are provided in Section 2. Section 3 specifies the models. The results are presented in Section 4. The final section offers a summary of the results and concludes. (Bahari et al.2022)

First, unobservable risks lead to better predictions about current expected costs than only an individual establishment-specific risk factor. Compliance costs are expected to be decreasing in the establishment size, the inventory safety stocks, and employment size but increasing in crowded OSHA and high litigation states. Second, in general, closed facilities have negative expected net profits on the date the decision was made.

The establishment level dataset for 2005 that contains compliance costs data of 41 within- and 19 cross-state commuting industries is used to create evidence by industry and by location. For the purposes of demonstration, it also employs the list of regional characteristics, which may help to explain the variation in state- and region-specific establishments’ responses to OSHA regulations. These data provide the time-series variation of actual regulatory and workplace characteristics, at least by the time a particular ambulance may have been procured by the set of ambulance provider facilities.

2. Factors Influencing Cost Analysis of New Ambulances

On the other hand, some costs are related to the individual trip. Costs can be incurred even if an ambulance is not used, as would happen in the case of for-profit organizations that contract with healthcare institutions. Costs can also vary by the destination of nonemergency requests for service in addition to those of emergency and interfacility transfer requests. Data emphasis also affects cost measures because many records systems are designed with service history in mind. Components of the trip costs are used differently based on the role of the decision maker and the goals to be achieved through the use of trip cost data.

Ambulance costs may be influenced by a large number of factors. These factors may include such predetermined costs as purchase price, insurance, payroll, and lease payments. Other costs may be outside the control of the management staff, yet they still fall under operating costs. These might include taxes, return requirements for investors, and drivers responding to emergencies using their personal vehicle or private ambulance. Costs continue whether the ambulance is parked at a hospital emergency room, responding to calls from a fixed location, or performing interfacility transfers. Such factor-specific influences tend to be most significant when comparing costs among different service models. They can also be significant for certain decision makers.

3. Case Studies of Ambulance Purchases

In the United States, ambulances known as “break-front ambulances” consist of slightly modified vans. In contrast, in many foreign countries, ambulances are essentially passenger cars or trucks modified to carry patients on stretchers. The relatively few manufacturers in the United States, particularly the “big three” of Cadillac, Cormet, and Federal, offer only minor modifications over time to the transportation aspect of their vehicles. This section provides an overview of the services provided and conditions under which specialized ambulances are purchased, reimbursed and subjected to regulation. The towns of Hilton Head and Greenville, South Carolina, and the North Tarrytown-Sleepy Hollow, New York Volunteer Ambulance Corps consider one or more alternative ambulance suppliers.

The purchase of any capital equipment representing a substantial outlay in terms of cost to a hospital administrator or healthcare manager requires careful evaluation of performance, efficiency, and cost of alternative items in terms of both purchase price and the total lifecycle (operating, maintenance, and disposal) costs. Ambulance selection is no exception. Indeed, the ability to securely, speedily, and safely transport a critically ill patient from prehospital to hospital care may depend upon the quality of the ambulance fleet. The cases common to this study deal with specialized ambulances including rescue trucks or land-mobile intensive care units. Other types of specialized vehicles are used to transport injury-free newborns from the hospital to their residence.

4. Technological Advancements Impacting Cost Analysis of New Ambulances

4.2. Key Technological Advancements Impacting Ambulances The healthcare sector is influenced by technological advancements, changing the industry for better healthcare provision. The more intricate medical technological equipment integrated into the healthcare sector has called health services and ambulance operators to shift and use special purpose ambulances with increased medical facilities. Technological advancements have resulted in the increased acquisition and operation costs to the services using these ambulances. The integration of portable medical monitoring equipment represents a major technological advancement which is essential for monitoring a patient’s vital signs whilst they are within the ambulance. This technological advancement is seen as an improved approach to patient care, and decreases the hands-on requirement of the ambulance personnel.

4.1. Introduction The healthcare sector is characterized by complex services which demand high technology utilization. Constant improvements in medical technology are contributing to increased patient satisfaction with decreasing costs. The optimal blend of technology has also served to better healthcare delivery. There is a vast range of technological advancements existing within the healthcare sector such as adjuvant chemotherapy, artificial heart, defibrillators, advanced EKG equipment, pacemakers, drug-eluting stents, laparoscopic surgical equipment, infusion pumps, digital pathology and radiology, disposable face masks, modular hospital beds, refrigerators for vaccines, sequencers, and various laser equipment which signal expanding healthcare facility requirements. The more sophisticated and intricate medical technological equipment integrated into the healthcare sector calls for a shift in standard ambulances too. The introduction of portable medical monitoring equipment represents a major technological advancement which is essential for monitoring patients’ vital signs whilst they are within the ambulance. The shift in using standard ambulances to a more medically equipped one in which emergency cases can be attended to has resulted in increased acquisition and operation costs to the services using these ambulances. This chapter presents and discusses the technological advancements identified relating to ambulances, known to impact their costs substantially.

5. Conclusion and Future Trends – Cost Analysis of New Ambulances

The proposed analytic cost methodology of this study could greatly enhance the transparency of current and future possible costs of new ambulances to governments so that prudent decisions could be made considering also the operating environment. This study also demonstrated that the total cost analysis is practical, since third-party cost information was sufficient and detailed enough for all three analyzed models. Although detailing cost data per item might be difficult, potentially high indirect costs contribute a large amount to the vehicle operating cost; nowadays, the full life cycle costing concept is more justifiable and applicable than ever. However, exact cost components remained in the background of real operating efficiency. Also, the direct quantitative relationship in terms of equipment price and patient service status was not directly captured and statistically tested; these are major issues for capturing ambulance service cost constituents. All of this data encompasses basically rural and small communities; these research steps are quite scarce on the subject.

This research represents the first systematic study concerning the total load cost of an ambulance. It provides valuable results to both the ambulance manufacturers and the healthcare industry for future reference. The calculated costs consist of the following components. Regarding the acquisition cost of an ambulance, the engine and the chassis account for more than 20% of the total cost, and the equipment accounts for almost 45%. Concerning the direct costs per year, the salaries and the fuel for service provision account for more than 70%. In addition to the vehicle cost, the operator consumes almost 70% of the total costs. Enhancement priorities for future research include the potential to construct an ambulance that can be used as a specialized clinic during the non-emergency time, and the development of a more efficient fuel or energy source for the traditional ambulances in service.