Fort Wayne Journal Gazette Editorial (PUMs and SSMs)

[Guest guest]

The EMS maze

Complex ambulance structure likely here to stay

Local officials are again preparing to award a contract for ambulance

service under a once-novel organizational structure adopted a

quarter-century ago. But it never really gained widespread acceptance in the

national emergency medical services community. And now Fort Wayne is

apparently stuck with it.

Nearly six years after being part of the lowest – but losing – bid to

provide EMS, the city Fire Department is sitting out the bidding process.

That decision leaves just one private company to challenge the current

contractor under a system that allows the winner to make money only by

charging patients more than it costs to offer ambulance service.

In South Bend and many other cities nationwide, firefighters – who spend

less time fighting fires and more time on medical calls – double as medics

and run the ambulance service.

South Bend ambulance patients, by the way, pay about half of the $1,000-plus

that Fort Wayne patients are billed.

The Three Rivers Ambulance Authority, the appointed government agency that

oversees the process, has a history of rejecting the lowest bids for the

service. Since the system was created in the early 1980s, the same

for-profit company – and its successors – have won the contract.

The system’s financial success is largely tied to a legally mandated

monopoly and a work environment that some critics say fuels burnout.

Still, the local service is top-notch, with quick response times and a high

survival rate for heart attack patients. The ambulance service has all but

been removed from local tax rolls, leaving – for better or worse – patients

and their insurance companies to foot the bill.

A mayoral task force gave the organizational structure its stamp of approval

in 2005 after a lengthy study. And in this era of tight property tax

restrictions, as long as the medical care continues at a high quality, it’s

unlikely any officials who oversee budgets will push for moving any costs

back to taxpayer-financed agencies.

Early privatization

Faced with tight city budgets in the Rust Belt recession of the early 1980s,

Mayor Win Moses was looking for a way to maximize property tax revenues.

Enter Jack Stout, a consultant who had developed a way of privatizing

ambulance service and shifting the costs from local taxes to patients and

their insurance companies. His public utility model called for local

emergency room doctors to establish medical protocols and for a government

agency to oversee the entire process.

The City Council – also seeking ways to stretch the budget – bought into the

plan. The Three Rivers Ambulance Authority was created as a government

agency, with members appointed by the mayor and county commissioners. The

authority bids out the ambulance service to a contractor responsible for

meeting tough standards on response time and medical service. The ambulance

authority controls the billing.

The city was running its own taxpayer-financed EMS department at the time,

and while city officials were happy to stop paying for EMS, there was little

talk about the new financial burden on patients.

The city EMS submitted the lowest bid. But Stout claimed the city had an

unfair advantage because of bulk purchasing power and other factors and

insisted that to attract bidders, the city’s bid had to be “weighted.” The

“weighting” raised the city’s bid above that of the winning contractor,

Mercy Ambulance.

Mercy was eventually purchased by Laidlaw, which folded Mercy into another

of its companies, American Medical Response. AMR was later spun off.

Mercy-AMR has won all subsequent bidding and continues to hold the contract.

Without question, the all-paramedic service was – and continues to be – of

much higher quality than the previous city service.

At a price.

The costs

Three Rivers Ambulance Authority charges $998 for an emergency run, plus $14

per mile.

The South Bend Fire Department charges $550 for its most expensive medical

run, plus $5.40 a mile.

In ville, the city contracts with AMR but subsidizes the service with

tax money. Patients are charged $695.

In Indianapolis, Wishard – a city-owned hospital – provides service within

the pre-UniGov Indianapolis city limits and charges $712 plus $13 per mile.

Wishard has its own property-tax levy and also subsidizes its service.

Fort Wayne patients who rely on Medicare find that the federal government

reimburses only about half the rate, said Ambulance Authority Director

Booher.

In response to the higher charges, the authority started its own

subscription program, LifeCare, in the 1980s. Now priced at $59 per year,

subscribers agree to allow the authority to bill their insurance company but

incur no out-of-pocket expenses.

The authority ran into trouble with state regulators for selling an

insurance program without being an authorized insurer. State Sen.

Wyss successfully sponsored legislation that exempted the ambulance

authority.

Given new property tax controls, Fort Wayne may well prove to be ahead of

its time. ville, for example, is supposed to provide a taxpayer subsidy

of 25 percent, but the amount has been creeping up. The city spends about $1

million a year on EMS, and “we’re trying to get away from a taxpayer

subsidy,” ville Fire Chief Ken Zuber said.

Profits and work

More than half of the authority’s $12 million budget goes directly to AMR,

the ambulance provider. At least some of the $6.4 million AMR received in

2007 represents profit to the company’s owners.

One key way the private provider maximizes profits is by using no more

ambulances than necessary.

AMR employs “system status management.” It uses computers to predict where

ambulances will be needed and move crews depending on time of day and which

other ambulances are responding to calls. While ambulance crews in many

cities are stationed in hospitals or fire stations, Fort Wayne’s crews

essentially have no stations. That’s why motorists see ambulances sitting in

shopping center parking lots and other commercial areas.

“It’s really hard on the workforce,” said Dr. Bledsoe, a former

emergency room doctor and paramedic who now is a professor of emergency

medicine at the University of Nevada School of Medicine. “They spend 12

hours in an

ambulance with no place to go to the bathroom or take a shower.

“It’s just demoralizing.”

And it results in high turnover, he said. “They end up with an itinerant

workforce.”

Fire-operated systems, on the other hand, tend to keep their employees for

full careers, said Steve , the assistant fire chief in South Bend who

oversees EMS.

Moreover, “These ambulances idle for 24 hours,” Bledsoe notes. “It’s an

economic and environmental issue.”

He also questions how well the system predicts where ambulances will be

needed. “There’s no empirical evidence that it’s any faster,” he said. “The

whole system is based on a fallacy. You can’t really predict, other than

common sense.”

Another way to guarantee steady income is the built-in monopoly in the city

ordinance that created the ambulance authority and put private ambulance

companies out of business.

Having only one company provide emergency service in the city makes much

sense. But in South Bend and other cities, private companies provide

non-emergency ambulance transportation, from nursing homes to hospitals, for

example. Such ambulance crews do not have to be staffed by the better-paid

paramedics.

But having a paramedics-only service is actually more cost-effective, the

authority’s Booher said. Cities with dual layers of paramedic and

non-paramedic service too often see non-emergency runs turn into emergency

runs, resulting in two ambulances with two crews caring for the same

patient.

Fire role

Medically, the city’s system is first-rate. Ambulance systems strive for a

survival rate among heart attack victims of 6 percent to 10 percent, Booher

said, while the city’s rate tops 30 percent.

A major reason: Emergency medical technicians – who have less training than

paramedics but still provide basic care – are nearly always on the scene

within four minutes. They are not ambulance workers but firefighters. With

fire stations spread throughout the city, they usually reach patients before

an ambulance crew arrives. The fire trucks carry defibrillators. The dual

response using firefighters and ambulance crews is common in Indiana and

U.S. cities.

The cost to the fire department is about $350,000 a year, only about 1

percent of the department’s budget.

With buildings increasingly safer, firefighters spend more of their workday

on medic runs and less on putting out fires. Last year, city firefighters

had 8,728 fire runs but 9,482 medical runs.

Given the fire department’s heavy involvement with EMS, city officials

decided in 2002 that firefighters should be a direct part of the system. The

Fire Department partnered with Paramedics Plus, a private company affiliated

with the East Texas Medical Center and headed by former Fort Wayne Fire

Chief Tony Myers, and bid for the contract. Though they submitted the low

bid, the authority again awarded the contract to AMR, saying its scoring

system showed AMR would be better, even though authority members said the

joint venture would also offer quality service. The vote was 5-4.

This year, Paramedics Plus is the only company other than AMR to submit to a

pre-bid credentials check, but the Fire Department isn’t part of the bid.

The department is examining ways to improve its first-responder role, Fire

Chief Pete said. “We are focusing in on that, and let’s do the best we

can with that,” he said.

Accountability

ville contracts directly with AMR, meaning that taxpayers can hold the

mayor and fire chief directly responsible for quality and price of EMS. The

same goes for South Bend and its fire department.

The Three Rivers Ambulance Authority is composed of thoughtful board members

who take their responsibility seriously. But as appointees, they are a layer

away from voters.

The public utility model, used in only about 20 cities nationwide, “creates

a double layer of bureaucracy,” said Bledsoe, the Nevada professor.

Barring any major shifts in how insurers handle ambulance service, don’t

expect any changes in the local system. And, Bledsoe notes, government

bureaucracies tend to be resilient.

“Once you create a bureaucracy, it’s like killing a vampire,” he said.

Warner , editorial page editor, has worked at The Journal Gazette

since 1981. He can be reached at or by e-mail, twarner@....

[Guest guest]

On Sunday, October 12, 2008 07:41, " Bledsoe, DO "

said:

> The EMS maze

>

> Complex ambulance structure likely here to stay

Some may recall that I was one of the earliest vocal critics of the PUM theory,

so I certainly understand the very valid criticisms levelled in this article. I

am no apologist for the PUM. But, I have to say that, try as he might, Mr.

Warner failed miserably at making a significant case against the PUM in Fort

Wayne. In fact, it's hard to even grasp what his beef is. When he prefaces his

argument with the admission that the current system provides a superior level of

medical service, with exemplary save statistics and good response times, at no

cost to the taxpayers, it really leaves his prime complaint of high user fees to

fall upon deaf ears. A self-supporting service is exactly what most taxpayers

want.

Honestly, I wish a better case could be made against the Fort Wayne PUM. But it

really appears as if they are the one that ended up getting the concept right.

And Mr. Warner comes across as having no significant case to make, which leads

one to believe that his only agenda here is to promote the fire service. Shame.

Rob