Weather is always a problem this quarter. The story here is unreimbursed flights will be covered with Obama care. All those flights done for free will get paid. The added revs will double earnings as no added costs. Hang in there as this will be $100 stock in two years.
Your missing a lot of issues. You really need to consider a lot more than "obama care" will save the day.
1) Look at the volume of bases they have. How does commercial mix when they have so much volume to spread the risk around drop by such a realtively large perscentage. This implies to me that there was not a conservative approach to their bad debt assumptions in Q4 and it catching up with them.
2) Look at their volume per base. Is it dropping? I will re-read, but i think it is??
3) Obama Care: Do you really think this is going to be a big win? Obama Care is NOT going to cover everyone. Let's assume they get 50% coverage on the 10% that don't pay. Then what? You really think the health plans are going to let them to continue to cost shift all those costs to commerical accounts when they are now getting money from the government they didn't get before? Won't a commerical account push back and say, hey - that 4% rate hike you keep pushing over EVERY QUARTER the past few years has got to stop. I am not supplementing the uninsured any more because now the goverment just paid you? next point on obama care - what will the reimbursement be like? Government reimbursement is LOWER than cost of providing the flight. So the real issue is what is the average revenue per transport. You really think Obama care is going to INCREASE the average revenue per transport?
4) The aging population: The aging population right now is increasing as a percentage of total population. what does that mean? It means there is going to be a continue shift from commerical to govement payers as people retire. So, what does that do for hte average revenu per transport.
5) Rate increases. AIRM has been living off significant rate increases the past few quarters/ year. It seems to be a bigger issue more then operational fundamentals. How long is that going to keep up? Hopfully long enough for commerical mix to improve.
Fezant1, so the cost shifting comment (raising rates) and how it relatest to Obama care. What do you suggest will be the answer to rising rates by the health plans? Simply not pay the bill - or better yet just keep paying what they have been paying despite the rate increases? I guess if we can read what their collection rate is or if their DSO continues to climb that will tell the story. But you could be right. I've speculated that health plans could limit the benefit they will pay, but this is emergency service and health plans don't want to stick consumers with an emergency bill do they?