Bad weather, fewer patient transports and a higher percentage of uninsured patients combined to create a surprise loss during the first quarter at Air Methods, the largest air ambulance provider in the U.S. CEO Aaron Todd hinted that the downturn was just temporary.
“Although the decrease in same-base transports was in excess of weather cancellations, we attribute the additional decrease to weather as well. When the severity of the weather is prolonged, it can also reduce requests for transports, which do not register as weather cancellations. Although recent price increases continue to be paid at historical collection percentages, the deterioration in percentage of privately insured patients more than offset the benefit from price adjustments. We remain hopeful that flight volume and payer mix will return to historical levels in future quarters once weather and other seasonal factors moderate,” Todd said.
Air Methods said it expects to report a net loss of approximately $0.14 to $0.16 per share for the first quarter of this year, compared with net income of $0.32 per share in the same quarter the previous year.
The announcement stunned Wall Street, accustomed to Air Methods’ unbroken string of solid quarterly profits, and the company’s stock price plunged 18 percent in the hours immediately thereafter and has yet to recover in a meaningful way. However, even with this decline, the company’s stock is still up 20 percent for the year.
Air Methods said total community-based patient transports for this year’s first quarter were estimated at 11,841, a decline of 9 percent. Weather cancellations at those bases increased by 427 compared with the prior-year quarter. Net revenue per transport from these bases also declined during the quarter to $9,108 compared with $10,072 in the prior-year quarter, a 10-percent decrease. The company said, “This decrease was almost entirely attributed to deterioration in the percentage of privately insured patients transported, which declined from 36 percent to 32 percent of total patients transported, compared with the fourth quarter of 2012.”