Oregon-based Life Flight to take over Northwest MedStar

An Oregon-based air ambulance company is taking over Northwest MedStar, creating a larger flight network that will have a monopoly on helicopter medical transport in Eastern Washington and North Idaho.

MedStar, the nonprofit air ambulance company run by Inland Northwest Health Services, will be integrated into the Aurora, Oregon-based nonprofit Life Flight Network on April 1. MedStar crews were grounded Wednesday afternoon to learn more about the deal from company leadership.

Flight crew members for MedStar were all offered positions at Life Flight, but MedStar eliminated a total of 14 full-time and 10 part-time jobs in administration and support services, INHS Chief Operating Officer Nancy Vorhees said.

Although Life Flight hires its own pilots, the takeover will not immediately change MedStar’s existing contract with Metro Aviation, which supplies pilots for MedStar aircraft. Life Flight CEO Michael Griffiths said the company would keep the existing contract in place and re-evaluate it when it expires, closer to the end of the year.

Life Flight will take over six existing MedStar bases. As part of the takeover, Life Flight is planning to open new helicopter bases in Walla Walla and Colville and add a small airplane to the Moses Lake helicopter base. Griffiths said the two new bases will create 40 additional jobs with a total payroll of about $2 million.

Life Flight currently dispatches all aircraft out of Boise. The company will keep MedStar’s dispatch center at Felts Field open, Griffiths said.

Providence Health and Services owns INHS, and therefore MedStar, and is also one of four nonprofit hospitals with a stake in Life Flight. The takeover will increase Providence’s stake in Life Flight from 4 percent to 25 percent, Griffiths said.

Vorhees said MedStar was not losing money and the takeover was not the result of financial problems. She said both programs were successful.

“We just felt that it would be a good idea to bring the program together,” she said.

A news release from MedStar said the change was driven by the need to “adapt to the changing health care landscape, be good stewards of our resources and partner with others to expand collaborative, community-based transport services.”

The deal was announced as many air and ground ambulance companies across the country are consolidating, Spokane Fire Department Assistant Chief Brian Schaeffer said. Smaller providers find that low reimbursement rates from Medicaid and private insurance mean it’s difficult to make money – or break even – without large numbers of patients.

“The only way that you can survive is in volume,” he said.

Schaeffer said the change would simplify dispatching during emergencies, since first responders would only need to call one company’s dispatch center to request a helicopter. In cases where two helicopters are in the air, they would communicate with the same dispatch center, which he said would improve safety.

“We’re going to have to come together with the Department of Health and the Life Fight Network and make sure our service isn’t decreased,” he said.

Patients who have flown with MedStar are likely to see increases in price. Life Flight averaged higher patient transport costs, according to data submitted to Medicare in 2013, the most recent year numbers are available. The per-mile cost of transport was $121 for MedStar and $176 for Life Flight, while the base cost of a helicopter ride averaged $14,220 with MedStar and $16,817 with Life Flight.

Griffiths said Life Flight would continue using its existing rates at all bases. People who have existing memberships with MedStar still will be covered by Life Flight and will receive renewal notices from Life Flight. The membership program allows people to pay an annual fee in exchange for coverage in case medical air transportation is needed.

The deal was reached after years of rapid expansion from both companies, spurred by growing demand for air ambulances as rural hospitals and clinics have closed or stopped offering as many services. Though medical helicopters often are used to transport people with serious injuries from accidents to hospitals, the bulk of their business is transferring people between hospitals to access care that’s not available at one facility.

MedStar and Life Flight grew out of hospital-based programs in the early 1990s. MedStar initially operated out of a single base in Spokane but expanded across Washington, reaching Missoula in 2014.

Life Flight has 16 bases across Oregon, southern Washington, Idaho and Montana. The company began expanding into MedStar territory about five years ago, opening bases in Coeur d’Alene, Sandpoint and Lewiston.

With the addition of MedStar’s bases, Life Flight will have a network of 22 bases with 27 helicopters and 12 small airplanes across the four-state region, making it the largest nonprofit air ambulance program in the country, Griffiths said.