Jim Mathes took one bad step out of his apartment in early September and wrenched his back. The pain was so intense he had to crawl back inside on all fours. He needed medical care, but there was no chance he could get himself down three flights of stairs to his car. So he did what anyone would do; he called for an ambulance.
That turned out to be an even bigger misstep, sending him into the demanding arms of a multibillion dollar global industry, and leaving him with a nearly $800 bill for a 5-mile ride.
The ambulance crew helped him downstairs, but once there, he felt well enough to drive himself to Parkwest Medical Center hospital, only five miles away in Knoxville, Tenn. The technicians urged him to ride in the ambulance, however.
“It’s no big deal,” Mathes recalls one technician saying, repeatedly. So Mathes got in.
Maybe the ride wasn’t a big deal, but it was an $800 deal.
Today, Credit.com and BobSullivan.net are starting a feature called “Consumer Rage.” Most know it well, but just in case: Consumer Rage is the reaction you get when hit with an unfair fee, a surprise surcharge, or an automatic payment that is deducted from your account without your permission. It’s also fine print fraud, red tape entanglements, and what economists sometimes called “inflation by degradation” — when the price stays flat, but the service declines or the size of the package shrinks.
Rage, however, differs from anger, because rage is often associated with powerlessness. People who are angry get even; people who rage usually just shake their fist at the moon. With the Consumer Rage, we want to change that. Tell us your stories, filled with all the (suitable for children’s eyes) vitriol you can muster. We’ll examine the issue, ask readers to chime in, then offer tips for getting your money and your dignity back. Along the way, we’ll also offer a deeper explanation for why things are the way they are, and suggest systematic changes, too. Now, back to the $800 ambulance bill.
Two weeks after the back incident, Mathes was stunned by another pain — a $798 bill he received from Rural/Metro of Tennessee. By Mathes’ math, the cost was more than $150 per mile.
“If I’d have known it would cost that much, I would have crawled to the hospital,” he said. His insurance won’t cover the ride, so Mathes is stuck paying the bill.
As if to add insult to back injury, the ambulance ride costs are itemized on a copy of the bill Mathes provided. It says the per mile cost was really only $8.73. The flat rate for sending the rig anywhere was $755.
“I feel like I was duped,” Mathes said. “I’m glad we’re not paying the amount for gas per mile that they do. Oh wait, that’s what they are asking me to do. Unbelievable.”
Perhaps he felt duped, but Mathes may have gotten off easy. A report issued to Congress last year by the Government Accountability Office found that ambulance rides can cost patients anywhere from $224 to $2,204, with costs generally higher in rural areas. It’s easy enough to find pricer rides, however, like this story of an 84-year-old man charged $3,000 for a ride next door.
s America focuses more than ever on health care costs, thanks to the launch of Obamacare, an examination of the exorbitant cost of ambulance rides offers some valuable insights about the intersection between health care costs and private corporations.
When Mathes called for help, he had no idea that he’d just injected himself into a high-stakes game of global high-finance.
Rural/Metro was founded in 1948 in a small Arizona town by a newspaper reporter who’d witnessed a neighbor’s home burn to the ground because of inadequate emergency response. He bought a fire truck himself and charged neighbors $12 a year for service.
By 2011, Rural/Metro had expanded to 23 states and 700 communities across the country, having swelled into the second-largest private provider of fire and rescue service. A publicly-traded firm, Rural/Metro became the target of a controversial acquisition by private equity firm Warburg Pincus. The $438 million purchase was funded via leveraged buyout — Rural/Metro borrowed the money to pay for its own acquisition, the kind of debt-financed deal that attracted negative attention during Mitt Romney’s run for president. Warburg Pincus took the firm private, to the chagrin of shareholders, who sued over the deal. Within two years, Rural/Metro missed a payment on the debt it borrowed for the purchase. In June, Rural/Metro declared bankruptcy — in record time after a private equity deal, according to The Wall Street Journal. The firm has said repeatedly that the bankruptcy will not impact emergency services, and in fact, it was able to re-negotiate debts with creditors to buy itself time.
Got your own tale of Consumer Rage? E-mail me at Bob @ Bob Sullivan dot net or leave a comment below.