By John Hazlehurst
Colorado Springs Business Journal
Copyright 2007 Dolan Media Newswires
COLORADO SPRINGS, Colo. — Colorado Springs and El Paso County might soon have a new ambulance service.
Since 1995, the joint city-county committee, the El Paso County Emergency Services Agency has used American Medical Response to serve the area’s emergency medical needs.
During the years that the contract has been in force, the company has received its fair share of criticism. Critics complain that response standards are not strong enough and that the local governments could save money by operating a publicly funded ambulance service in conjunction with fire departments.
For example, prior to 1985, the Phoenix Fire Department relied on private ambulance companies to transport its patients. At that time, seven ambulance companies participated in a rotational dispatch policy. Average response times approached 20 minutes and a 10 minute response time was met only 50 percent of the time.
Going public
The City of Phoenix decided to change to a single transportation service. The Phoenix Fire Department was permitted to compete in the bidding process for this service and won the contract. In November 1985, Phoenix Fire Department Emergency Transportation Services was implemented. The service maintains a response time of less than 10 minutes 92 percent of the time with “most” response times within 5 minutes.
The direct cost for emergency ambulance service in Phoenix is about $7.7 million per year. Cash receipts total more than $12 million, making it a strong profit center for the fire department.
According to El Paso County Commissioner Sallie Clark, who is chairwoman of the ESA, there’s no indication that the Colorado Springs Fire Department will bid for the local contract, despite its potential profitability.
In November 2004, City Council asked the Fire Department to develop a proposal to assume responsibility for ambulance service within the city. That proposal never got beyond preliminary stages, when council members balked at the costs of such an operation.
The request to the fire department was driven by Clark and City Councilwoman Margaret Radford.
“There have been extensive discussions in the past, but I think it’s kind of a dead issue now,” Clark said. “I don’t think that council wants to make the kind of start-up investment that the contract would require. “
That investment would be substantial. AMR has a minimum of nine and a maximum of 17 ambulances on call, depending on time of day, weather, season and other factors.
That would suggest that the city would have to purchase at least 20 ambulances, and hire scores of paramedics, dispatchers, administrators and other support personnel. Given the city’s budget problems, such a commitment seems unlikely.
Problems, deficits
And not every city that has made ambulance service a public responsibility has fared well. In Lincoln, Neb., the city loaned the fire department $1 million in 2001 to take over ambulance transport.
The venture has not exactly been a resounding success. Six years later, the department still owes the city $642,000, and has often been enmeshed in labor disputes.
When the Lincoln switched from a private to public ambulance provider, the city was promised faster, better and cheaper service. But in 2005, fire Chief Mike Spadt admitted that “We’re not making ends meet. “
The ambulance service lost $500,000 during that fiscal year, leading to an emergency loan from the city and a 22 percent rate increase the next year.
Hybrid model
Pueblo, following the model of many cities, neither operates its own ambulance service nor has a contract with an exclusive provider. There are five ambulance services operating about 20 ambulances in Pueblo County. They are licensed by the County Health Department.
The barriers to entry are low. Applicants need only pay a $100 fee, provide proof of insurance, submit to a vehicle inspection and prove that their personnel are appropriately qualified.
Request for proposals
The ESA board is preparing to issue a request for proposals, which will form the basis of a new contract, whether with AMR or another ambulance service.
So far, only Rural Metro Corp., one of the country’s largest providers, has expressed interest in competing with AMR for the contract.
According to David Patterson, the manager of the Colorado division of Rural Metro, the interest is “very strong. We’re very interested. “
“Of course,” he said, “A lot depends on the RFP. We’d hope that it would offer a level playing field for all of the potential providers. But Colorado Springs is a wonderful community, with a lot of potential for good partnerships, and we’d love the opportunity to enter the market. “
Rural Metro provides ambulance service to the metro Denver area, including Denver, Aurora, and Adams, Arapahoe, Douglas and Jefferson counties. The company, which has 7,800 employees and annual revenue of more than $500 million, provides services to more than 400 communities.
Changing expectations
Clark was specific about changes that the board would like to see in a future contract.
“We need to clarify some areas of the contract,” she said. “We have to address ‘level zero’ events, when no ambulances are available. And we need the whole process to be more open, so that citizens from the whole community can have input. The present contract may be too long. Also, there’s some concern about response times - for example, last year Colorado Springs wanted to reduce Code 3 times from 8 minutes to 6 minutes in the urban area. “
Clark also said that she is concerned about what she sees as a tendency by AMR to “cherry-pick” - that is, to allow rural fire departments and ambulance services from other jurisdictions to do transport from outlying areas of the county.
“The Black Forest fire department is doing transport to city hospitals - maybe 19 or 20 transports each month,” she said. “AMR says that it’s best for the patient to have the closest ambulance do the transport. “
But Clark is worried that by encouraging other providers to operate within less dense portions of the service area, AMR is concentrating its service on the more profitable areas of the county. And that may enable AMR to operate with fewer personnel and ambulances.
Prodded by Clark in 2006, the ESA Board renegotiated AMR’s contract to make it more difficult for the company to avoid level zero events by simply passing off patients to out-of-area providers. Such pass-offs are now considered level zero events, and are penalized accordingly.
AMR’s contract with the ESA is highly specific and detailed. The contract mandates equipment standards, personnel qualifications, ambulance availability and severely penalizes any failure to perform.
Coverage zones
Under the terms of the contract, El Paso County is divided into five zones (urban, suburban, rural, frontier, and wilderness), and different response times are specified for each zone.
In the urban zone, for example, AMR must respond to a Code 3 call within 8 minutes 90 percent of the time, and within 12 minutes 100 percent of the time. In the “wilderness” zone, the company must respond within 45 minutes.
Ted Sayer, AMR’s general manager, acknowledges that the ESA might want to tighten response times in some areas of the county.
“So far, we haven’t been in any discussions with the ESA,” he said. “It’s really up to them, as our customer, to define the areas of concern. There may be a desire for better response times in some of the high-growth areas of the county - Gleneagle and Falcon for example. “
Asked about “level zero” events, when no ambulances are available, Sayer concedes that they happen, but minimized their importance.
“If you want an extremely efficient system, you will have these events,” he said. “Depending upon the time of day, weather, and other factors, we’ll have between nine and17 ambulances available. Level zero events typically only last a few minutes, and we’ve never left anybody. “
‘Level zero’ problems
But AMR has fielded complaints from other jurisdictions where it holds exclusive contracts about “level zero” events.
Eighteen months ago, in Victorville, Calif., a community in the largely rural “high desert,” AMR was the object of complaints from fire personnel and rescue workers, who alleged that the company didn’t provide enough ambulances to effectively respond to calls in its service area.
This shortage, the paramedics claimed, resulted in an average of one “level zero” event in every 12-hour shift.
Such a record would be costly to AMR under the terms of the local ESA contract, which assesses a fine of $1,000 for every level zero event. That might explain why such events are rare - “one or two a month,” according to Sayer.
Does Sayer anticipate competition for the new contract?
“Absolutely, and we welcome it,” he said. “We feel we’ve done a great job for the community. “
Clark said that the board’s goal is simple.
“We just hope to end up with a better contract,” she said, “and better service for the community.