You could say that the ambulance business is in a period of transition. Regulations are changing, costs are rising as a result, and the structure of the overall market is evolving. But change isn’t always a bad thing. Whether you’re a veteran of the medical transportation business or a potential investor researching the market before purchasing an ambulance company for sale, understanding the challenges facing the industry can put you in a better position to take advantage of them.
Structure of the Healthcare Market
From hospitals to medical equipment manufacturers, everyone in the health care industry is waiting with bated breath to see how Obamacare will ultimately impact the market. Ambulance business owners are no exception. Already, medical equipment is pricier, and higher insurance premiums mean that customers have less in their pockets to pay for non emergency medical transportation. More customers falling under Medicaid ambulance coverage will mean more time and money spent on billing and accounting. For larger ambulance business owners, there may be the added burden of providing expensive healthcare plans to employees. That’s the bad news.
The good news is that the industry is simultaneously experiencing positive changes that may help balance out structural shakeups. The largest U.S. demographic – the Baby Boomer generation – is entering old age, which will result in more doctor’s appointments, clinic visits, and hospital trips. Customers unable to afford ambulance rides provided by insurers may turn to independent non emergency service providers. If ambulance service providers can lower costs, they may be able to ride out – and even benefit from – current changes.
Competition and Consolidation
Until recently, most experienced ambulance transport business owners spent their entire careers as little fish in a big pond. In other words, the ambulance industry has historically consisted of many mom and pop companies serving small markets. That’s all changing, however. Strategic investors are buying up struggling small companies in order to expand their reach and enjoy the lower overhead costs that come with consolidation.
For small business owners, a more consolidated market will make for more difficulty competing. To survive, these companies must be dedicated to carefully managing costs and nurturing relationships with loyal clients. Of course, there is another option – expansion. As competitors struggle, a business owner or investor with the right resources or potential for strategic gains may be able to score a good deal on an ambulance company for sale. Many of the weakest market players are struggling financially, but retain a solid inventory, experienced drivers, and customer contracts.
Just like the larger healthcare industry, the medical transportation business is constantly evolving. At the heart of the business, however, is a growing population of customers in need of quality medical transportation. Owners able to cut costs, whether by careful management or acquisitions and mergers of ambulance services for sale, can triumph over these new challenges.