Why Ambulances are so Expensive

Economist David Oks tries to figure out why American ambulances are so expensive:

He sent the bill to his insurance provider, which at first denied the claim, saying that AMR was out of network and that the ride hadn’t been pre-authorized. (Whitten, of course, hadn’t chosen the ambulance, or anything else about the trip.) On appeal, his insurance agreed to cover $9,967 of the charge — better than nothing, but it still left him on the hook for about $3,000. After several failed attempts to contest the bill with AMR, and not wanting it sent to collections to hurt his credit score, he paid the remaining $2,900 or so. The brief ambulance ride from one hospital to another had cost him far more than any other part of the experience.

What Whitten had received was a “surprise bill” — a charge that lands on a patient when they’re treated, without knowledge or consent, by a provider outside their insurer’s network. The insurer pays what they consider reasonable; the provider bills the patient for the difference; and the patient, despite having insurance that’s meant to pay for treatment, is left holding the balance. This is a terrible situation to be in.

It’s also the default way that ambulance billing in the United States works. Each year, roughly three million privately insured Americans take an emergency ambulance ride; about half of them get an out-of-network bill for it, a rate unmatched anywhere else in medicine. And the uninsured have it worse still: with no insurer to absorb any of the charge, they face the full, undiscounted bill on their own.

This has proven quite difficult to fix. When Congress banned surprise billing across virtually the entire healthcare system in 2020, ground ambulances were the great exception. If you’re privately insured and need an emergency ambulance, you’re entering a lottery whose ticket price you’ll learn weeks or months later.

I wonder why anyone pays these bills. As I understand American law, people are not obligated to pay a bill for services that were never negotiated.

Not paying the bill could hurt a credit score, but you say that about any refusal to pay a scammer. Any scammer can send you a bill, and report you for not paying it. The credit bureaus are supposed to remove such items on request, unless there is a court judgment.