Pittsburgh Post-Gazette
April 12, 2011

A bankruptcy filing by a Washington County ambulance service last month, following the abrupt closing of another ambulance service in West Mifflin in February, is bringing renewed attention to the fragile financial standing of the life-saving service.

There are 170 licensed ambulance services in southwestern Pennsylvania “and more than 80 percent of them will tell you they are struggling financially,” said Thomas J. McElree, executive director and general counsel for the Emergency Medical Service Institute in Robinson. Most are independent, nonprofit services, with about 25 percent for-profit, private operations.

There’s no clear evidence yet that the ambulance services’ financial struggles are affecting response times, Mr. McElree said. But, he added: “Has that hurt patient care? At some level, the answer has to be ‘yes.'”

The troubles, according to Mr. McElree and J.R. Henry, executive director for Valley Ambulance Service in Moon, go back to a 2006 change in Medicare reimbursements that established a set fee schedule for ambulance transports, rather than reimbursing their actual costs.

That change alone probably costs an ambulance at least $100 per call, the two men estimated, and it particularly hurts services in communities with a high percentage of Medicare patients and residents on medical assistance.

“If you collect 50 percent of what you bill on emergency calls, you’re doing good,” said Mr. McElree. “Most ambulances get less than 40 percent.”

Another factor, noted Mr. Henry, is that the service does not get paid if it doesn’t end up transporting someone, which happens about 25 percent of the time. “It’s like having a business and giving 25 percent away.”

It’s not just the ambulance service that’s hurt by those situations. The transport-to-get-paid formula, said Mr. McElree, creates an artificial incentive to increase overall health care costs because paramedics may be more inclined to transport someone whether it’s necessary or not. “You have patients in the health care system who may not need to be there.”

State law requires that municipalities ensure the provision of ambulance service. While the number of ambulance services in southwestern Pennsylvania has shrunk — the 48 services in Allegheny County represent about half the number there were 15 years ago — they collectively are still responding to nearly 500,000 emergency and nonemergency calls yearly.

And, Mr. McElree noted, calls have only increased with advent of mobile devices that allow people to immediately alert 911 before they know if anyone is even hurt.

“We have to be there to respond. We can’t say, ‘Go check it out and let us know,'” said Mr. McElree.

Last year, Pittsburgh City Controller Michael Lamb sounded the alarm that nonprofit groups and municipalities needed to help ambulance services because Medicare and private insurers generally cover only about half of the costs. EMS in Pittsburgh, he said, had $10 million in revenue in 2008, but $12.1 million in expenses.

Mr. Lamb wants to set up a funding pool for EMS providers in the city and adjoining neighborhoods, and he and his staff have been talking to insurers, health system officials and others about doing that.

“There’s definitely interest out there,” he said. “Not to the level we’d like, but no one has thrown us out the door.”

Operating an ambulance service is not cheap — Mr. McElree said having a single advanced life support ambulance staffed and ready 24 hours a day can cost close to $450,000 a year. And Mr. Lamb pointed out that ambulance services had evolved from a largely all-volunteer corps to trained emergency medical technicians and paramedics.

Some municipalities solicit yearly subscriptions from residents to help cover their overhead, but Mr. McElree said typically less than 25 percent participate. “That entire community is probably not supporting that one ambulance.”

The Washington County ambulance service that filed for bankruptcy in March, Bentworth Ambulance Service, is staying open as it restructures, and Baldwin EMS stepped in to serve the West Mifflin-Whitaker area when PRISM Health Services closed.

Bill Plunkett, chief of Baldwin EMS, said he added 10 staff and two new ambulances for the expanded service, which now runs from South Park to the Monongahela River at the city line, to Kennywood. Financially, he said the move should help because there should be less down time for the ambulances — an argument that more consolidation may be needed to keep ambulance services viable.

Mr. McElree said the situation overall might not be at a crisis point yet, but that he was troubled by the pattern that’s emerging. As funding gets tighter, he sees services trying to run their ambulances longer, update equipment less frequently and hold staffing to a minimum. It’s a matter that’s drawn statewide concern as well.

“I think we should be paying attention right now,” said Joe Schmider, director of the state’s Emergency Medical Services Office in Harrisburg. “I don’t want the EMS system to wait until it crashes before we look at it.”