Thomas, I know less about this stuff than many. But it sounds to me like you have a perfectly suitable fleet, and maybe less than ideal maintenance. Maybe you need to up the expertise locally, or get a few of the right people on tap, maybe even on retainer. Maybe bump the parts inventory, if analysis shows some low-hanging fruit.

As a doc, two things I do know about: I'd wonder about the optics of showing up in a jet. Even if a jet is cheaper in every way, optics are not reality based. I'm thinking of patients here, but also referring docs. You are possibly aware that ortho is one of the highest paid specialties. You probably make more than all of your referring docs. You know it, and they do too. No need to underscore it.

I also know that reimbursement can change literally overnight, and enough to render your present patterns untenable in part or in whole. You can't bill for travel, so you are paying a bit (maybe a good bit) to get people from Riverton in the OR than someone local. I would not want to be in airplanes that were not commodities. Premier could be a motivated seller if MC changes the world around.

Dr. Frame,
No doubt like many other private providers in this country, we have been watching developments on a national level carefully. While there hasn’t been a rapid shift to socialized medicine, it is a definite crawl. There would absolutely need to be some changes but I don’t think there would be a situation where we are suddenly needing to liquidate the fleet. As with many private physician groups, we have endeavored to diversify our business such that we offer other high value ancillaries to our patients so that care can be more efficient for them and we are not as beholden to the government for fee for service adjustments. But you are right, if it is MC for all, things will change, but not only for us. For me, that sounds like it would be a trigger to sell the turboprop, retire from medicine, fly the Husky more and ride my horse and bike more often
Lots of my patients (and many physicians across the state) fly and while there is no doubt that some patients and docs would raise eyebrows at a jet for travel, others would just want to know what it cruises at and what we see for fuel burns.
In the end, my gut tells me that we will be staying with the King Airs and seeking alternatives for maintenance and parts sourcing. Moving from an out of production turboprop to an out of production jet does seem odd.
Had icing and an approach to minimums this morning…I guess summer is over.

As someone who flies 80 hours a month, doing this for a living. Time to look at the stats, and realize a PC-12 IS the perfect airplane for this.

Costs too much to get.

Doesn't fit passenger requirements for a twin.

Not perfect.

Mike C.

Dr. Bienz,

I hope that the use of title does not mean that I have given offense. If so, apology.

I think you're right on the secular view in the short run. My thought had more to do with focused changes that MC makes from time to time. I remember 3 of those right off the top of my head, all in hyperbaric/wound care.

First, in TX, we were treating patients on an formal understanding with our FI, which disappeared overnight. Had to do with acute arterial insufficiency. They tightened that up enough to eliminate 98% of HBO under that indication.

Then they changed how a compromised flap can be treated. About 90% reduction in volume.

Finally, they changed the definition of debridement and "wound cleansing", knocking 50% off of that. (11042 and 97597).

Each of these was a significant hit on the bottom line, as much as 20%. It is much more if you are exposed to the technical side. In HBO, the professional fee is 15% of the technical in the outpatient setting.

All of my insurance contracts have been tied to MC, both from an insurance standpoint, and also from a guideline standpoint. You might have better contracts, being dominant in your market.

That's the sort of vulnerability that I was thinking of, not some global change. I think we'll see large global changes, certainly by February. Not sure which year. Meantime, King Air has been getting people there and back for a long time. Not the fastest, not the cheapest, but I suppose it is the most popular for some reason or the other.

Costs too much to get.

Doesn't fit passenger requirements for a twin.

Not perfect.

Mike C.

400-750 hrs/year with 3-4 airframes isn't a great PC12 mission. Really capital intensive.

Dr. Frame(Don),
No offense at all (I’m not easily offended)
The thread briefly shifted to “doc talk” and when I’m addressing a physician I don’t know regarding a professional subject I use the title. When I’m speaking with those I know or about planes in general, it’s usually first name.
No question MC will continue to ratchet down the reimbursement to the best of their ability. That’s why more and more docs are pulling out of coverage. One specialist in my group has already set a “2 new Medicare patients a month limit”. I haven’t done that yet, but I do limit Medicaid or the clinic fills with that payer mix and none of the insured patients can even get in. Hard to do, but there’s simply not enough time in the day to see everyone.

I couldn’t help myself.... .

Best


[youtube]https://youtu.be/9UZWfMgjqAs[/youtube]

400-750 hrs/year with 3-4 airframes isn't a great PC12 mission. Really capital intensive.

Carrying cost on a $10 million fleet upgrade is still $1000 a day.

Quest uses pc12’s because they fly them a lot. This is more like a typical cargo operation with one short roundtrip each day … and that model widely uses old airframes

400-750 hrs/year with 3-4 airframes isn't a great PC12 mission. Really capital intensive.

Assuming they aren’t looking for NG’s, they should be able to buy three PC-12’s for a lot less than $10M, subtract the $3.5M worth of King Airs from that and it isn’t that bad.

I do agree that lowest capital cost wins… but we’re hauling docs, not freight. At some point they’re going to need to upgrade.

I suspect that we are about to see hyper-inflation, a $2.5M PC-12 may seem like a very wise investment in a year or two.

It sounds like the single engine safety concern was their only reason not to go Pilatus… as much as I love my King Airs, I think the safety argument has been put to rest. At this point I’d rather face an engine out in the Pilatus unless I’m guaranteed it will occur after takeoff.

You'd rather have an engine out in a PC-12 than a King Air?

That's dumb.

Give me the twin every time and we land nicely at an airport instead of a field.

If it happens just once, regardless of the outcome, the docs will insist on selling the PC-12s and getting twins. They already instinctively understand this.

As to capital, paying $7M more for a set of PC-12s is about $300,000 more interest (and more if you consider lost investment returns). Over a 500 hour flying year, that's $600/hour just for cost of money.

That is WAY more than the extra fuel a Citation or King Air burns.

The PC-12 wins when you have high usage like the medical labs. This mission doesn't fit that profile. They just cost too much.

Mike C.