How Much to Save My Life??

An estimated 40 million ambulance trips, at a cost of $14 billion, are provided each year by nonprofit entities such as local fire departments and by for-profit companies each year in the United States. Sensing profit-making opportunities, in recent years for-profit companies have significantly expanded their operations, often taking over from nonprofit operators. And big investors are betting that ambulance services will generate significant profits: two private ambulance providers were recently bought by investors, one for $3 billion and another for $438 million. Charges for an ambulance ride vary wildly across the country, from several hundred dollars to tens of thousands of dollars. The price may depend on many things other than the patient's medical needs, from the level of skill of the ambulance team onboard to the distance traveled, or in some cases whether a friend or relative rides along (which can add hundreds of dollars to the cost). While it's impossible to know the total amount that Americans are paying for ambulance services, Medicare, the federally administered health insurance program for Americans age 65 and older, has seen its spending on ambulance services explode, from $2 billion a year in 2002 to nearly $6 billion in 2013.

Please watch this video before proceeding:The Cost of an Ambulance Ride(Links to an external site.)

What accounts for the extreme variation in the cost of ambulance services?How are these services able to charge thousands of dollars, regardless of whether an ambulance is actually needed? Assume you needed an ambulance ride. What factors would determineyourwillingness to pay for the ride?