23 years ago, Fernando Avilés worked in an international company selling medical equipment to hospitals. He owned an ambulance to give volunteer service and one day he went to a hospital to present a team, when a doctor asked him to transfer a woman who had lost a lot of blood. His ambulance had the necessary equipment to keep her stable; he only asked that the doctor and a nurse accompany him.
“This is how I made my first transfer, which was not for commercial purposes, and that was a phenomenon that was repeated and they sent me messages to the pager requiring support for transfers at 2:00 or 3:00 am. I realized that if this turned it into a professional service, I would earn more than as an employee in an international company, and I had just graduated from university a few years ago,” says Fernando, founder and director of XE Médica, which currently operates 22 ambulances in Mexico City and ten more in other states.
Prehospital and transport services in ambulance-type vehicles have become an essential component of health care systems around the world. The Covid-19 pandemic revealed the critical importance of these services, since hospitalizations can increase exponentially in times of health emergency, putting both public and private health systems to the test.
Even after the pandemic subsides, the global demand for medical services continues to rise. Factors such as the aging of the population, the prevalence of acute and chronic diseases, traffic accidents and natural disasters contribute to the constant growth in the need for professional and timely medical care.
Mexico, like other countries, faces significant challenges in the field of health care. Despite their efforts, the health infrastructure and human resources in the country are not sufficient to meet the demand.
Not to mention that few people in Mexico can face a medical emergency without putting their finances at risk. According to data from the 2021 Mexican Association of Insurance Institutions (AMIS), only 9.8% of the Mexican population has medical expenses insurance, and more than 50% of these holders reside in Mexico City.
The ambulance business, if managed properly, can be profitable and offer opportunities to provide emergency and non-emergency medical transport services. In addition, the increasing demand for home health care and telemedicine services creates new possibilities for ambulance companies that can adapt to these trends.
However, the sector also faces considerable challenges. Competition, changes in government regulations, and operating costs, such as purchasing and maintaining specialized vehicles and medical equipment, as well as hiring trained personnel, can test the sustainability of the business.
According to a study by Market Data Forecast, the global ambulance services market was worth $37.22 billion in 2022, and is expected to reach $60.27 billion by 2027, with an accelerated annual growth rate of 10.12%. The Covid-19 pandemic contributed to this increase due to the increasing demand for emergency ambulance transfers. However, growth will continue thanks to several factors:
1. Traffic accidents: Road accidents are becoming more common, increasing the need for medical attention and assistance at the scene of the accident.
2. Cardiovascular diseases: Heart conditions require emergency medical intervention, and cardiovascular disease is one of the leading causes of death worldwide.
3. Population Aging: With the aging of the population, an increase in neurological and cardiac conditions and accidents related to the elderly is expected.
4. Home Health Care Services: Interest in home health services and telemedicine expands opportunities for ambulance companies.
Regulation, excessive?
In Mexico, the regulation of ambulance services has been a key issue. Mexico City, in particular, has an approval process that involves multiple administrative entities, which can lead to significant delays in the operation of ambulances. Despite these regulatory challenges, the demand for ambulance services has proven to be high, especially at critical times such as the peak of Covid-19 infections in late 2020 and early 2021.
“The ambulance service is regulated by 9 administrative entities and all of them have to give their approval. That’s slow, expensive. Just having the plates of an ambulance can take up to nine months”, says Fernando.
The regularization of ambulance services carried out by the CDMX government in 2022 introduced maximum rates for ambulance transfers, seeking to control prices and provide clarity to users. However, it is important to take into account that these rates do not include all the necessary elements for medical care, such as medicines and specialized medical equipment, explains the director and founder of XE Médica Ambulancias.
Source: Sedeco CDMX, CDMX Gazette September 2022.
Despite the opportunities, the ambulance business in Mexico also faces significant risks. Over-regulation and red tape can delay the operation of ambulances, while unfair competition and lack of compliance with regulations can affect the quality of services offered.
“The fact that competition is so regulated is going to cause irregularities. These companies try to keep a low profile and that gives rise to abuses, bad practices, poor quality of service and non-compliance with regulations”, warns Avilés.
How big is the market in CDMX?
The regularization program carried out by the government of Mexico City in 2022 showed how many public and private providers exist in the capital of the country and how many ambulances they have:
- 64 providers or providers of ambulance transfer services in CDMX.
- 639 vehicles registered as ambulances.
- 95 private providers have 449 ambulances (70%)
- 12 public providers have 190 ambulances (111 are from the CDMX Health Secretariat)
- 74 bidders do operate for profit and concentrate 421 units of the 639 registered.
CDMX, being a city with a high population density, demand and supply of private health establishments, with 13.6% of beds available in the country (Inegi, 2021), is the largest market for transfer and emergency ambulances .
The second largest is the State of Mexico, with 11.1% of beds in private health centers.
How much more can this market grow? For Fernando Avilés, in CDMX there is already a large supply of medical transport services and, as long as there are no more hospitals, the demand will not grow any more.
However, the country’s hospital groups are clear that they must expand to meet the growing demand for medical services, be they consultations and preventive care, procedures or medical emergencies.
Miguel Khoury, director of MAC Hospitals, tells in an interview that they currently have 20 hospitals in 17 cities in the country, and they plan to close 2023 with 23, either through construction or acquisitions, which would make them the largest hospital group in Mexico. . In the long term, they want to have a hospital in every city with more than 200,000 inhabitants.
Between 2019 and 2021, 86 new hospitals have opened in Mexico, bringing the total number to 4,995, according to Statista figures.
As the demand for medical services continues to increase, the need for emergency and non-emergency ambulances becomes more pressing. However, they will also need to address the challenges inherent to the sector, including capital investment and human resource management, to ensure long-term sustainability and the delivery of quality healthcare to the population.
MORE NEWS:
Francisco Mucino Journalist. Public finance, energy, business, innovation and the stories they contain.