Tuesday, June 22, 2010
By Joe Smydo, Pittsburgh Post-Gazette
Pittsburgh City Controller Michael Lamb wants nonprofit groups and municipalities across Allegheny County to step up to the plate to head off a funding crisis for ambulance services.
In a new report, Mr. Lamb said many local emergency medical services are running deficits because their primary revenues are Medicare and private insurance payments that cover only about 50 percent of the cost of ambulance trips.
He said the county 911 center, subsidized with a surcharge on telephone lines, also needs help.
“As the use of cell phones has increased, the resulting drop in land line usage has made the county surcharge a shrinking source of revenue,” Mr. Lamb said in the report, “Critical Condition: The EMS Crisis in Pittsburgh and Its Neighboring Communities.”
He developed the report for the year-old Congress of Neighboring Communities, made up of representatives of Pittsburgh and 35 other municipalities.
At its second annual meeting Friday, the congress voted to explore Mr. Lamb’s two-pronged funding proposal.
Mr. Lamb wants to solicit contributions from nonprofit groups, including hospitals and foundations, and establish a pool of subsidies for ambulance services and the 911 center.
Under the plan, municipalities would match the nonprofits’ contributions, either dollar-for-dollar or with in-kind contributions. “This is to both guarantee the EMS provider a predictable income source and to ensure that the community has some ownership of its EMS service,” the report said.
In an interview, Mr. Lamb said it’s too soon to say how much money might be sought from the nonprofit sector. He said helping ambulance companies would be an extension of the hospital community’s mission.
Susan Manko, spokeswoman for University of Pittsburgh Medical Center, said in an e-mail that the hospital network “already provides training, medical direction, supplies and other services to city and other EMS services at low or no cost. Additionally, UPMC has always supported the city, county and region in a myriad of ways that often goes unnoticed and under-reported,” such as providing hundreds of millions of dollars in charity care and a $100 million pledge to the Pittsburgh Promise scholarship program.
“It’s unlikely there’s another nonprofit academic medical center anywhere in the United States that’s doing more for its region than UPMC already does for Pittsburgh, Allegheny County and Western Pennsylvania,” Ms. Manko said.
Mr. Lamb wants to pilot the funding program in congress municipalities and, if he has enough support from nonprofits and municipal governments, eventually take it countywide.
In Pittsburgh, EMS operating expenses topped about $12.1 million in 2008, while revenues reached only about $10 million. In other congress municipalities that year, deficits among EMS providers ranged from $35,000 (Parkview Emergency Medical Services in O’Hara) to about $331,000 (Prism Health Services in West Mifflin).
In all, 17 ambulance services operate in congress municipalities. In 2008, only six were self-sufficient, according to the report. No figures were provided for Northwest EMS, described as a for-profit enterprise.
Pittsburgh Mayor Luke Ravenstahl, the congress chairman, is open to Mr. Lamb’s proposal. However, the mayor would like to see the finances fleshed out, mayoral spokeswoman Joanna Doven said.
As Mr. Lamb tells it, ambulance companies are hurting for many reasons.
Support from municipalities fluctuates, and household memberships are low.
“The revenue generated from the annual membership drive is a crucial component for maintaining our operations: unfortunately, last year, only 25 percent of eligible residents became members,” Prism Health Services says on its website.
But the biggest problem is low insurance rates. “Medicare reimbursements are used as the basis of private insurance payments, and the rates are low in relation to the actual cost of service,” Mr. Lamb’s report said.
The city EMS bureau was one of 13 ambulance services that filed a federal lawsuit against insurers in February, challenging the latter group’s payment practices. The insurers pay patients instead of the ambulance services, and some patients never forward the money, the suit claims.
Mr. Lamb said money from the nonprofit groups could be distributed by the county Emergency Management Agency or a new nonprofit group set up for the task. Eighty percent of the subsidies would go to ambulance companies, 10 percent to the 911 center and 10 percent to ambulance providers’ training or coordination programs.
Money would be distributed by a formula that considered an ambulance service’s call volume and other factors. To qualify for grants, the ambulance service would have to meet certain training standards.
Each ambulance service would receive matching money from the municipality or municipalities it serves. Membership drives and fundraisers could count toward the municipalities’ share.
The county 911 center receives about $8 million a year from a $1 monthly surcharge on land lines. The county gets a smaller share of cell phone surcharges, which are funneled through the state, spokesman Kevin Evanto said.