A sweeping New York Times investigation of private equity investment into and management of businesses providing emergent and non-emergent medical services in communities across the United States revealed some troubling, but not surprising findings.
EMS broadly reflects the communities we serve and is influenced by the invisible forces of macroeconomics that impact all organizations. Businesses of all types fail because of absent leadership and short-term emphasis on profits.
Politicians at every level of government have a tendency to over-promise, under-deliver and duck difficult decisions. There are several reasons private equity firms get into the business of emergency medical care and firefighting:
- Replace failed leadership unable to balance the budget.
- Exploit marketplace inefficiency.
- Service communities with no regulatory or statutory requirement to provide fire suppression or 911 emergency medical response.
- Invest in future trends like the growing population of Medicare- or Medicaid-eligible Americans with an ever-worsening list of health conditions.
The Times investigation into private equity investment in public safety looked at “cost cuts, price increases, lobbying and litigation.” We have previously covered and often commented on those topics — the sudden closure of TransCare EMS, the acquisition of Rural/Metro by AMR’s parent company, the off-shoring of EMS patient billing, mergers and consolidations and the unscrupulous practice of overbilling for non-emergent transports are a few examples.
To know one EMS system is to only know one EMS system. National media investigative coverage of EMS potentially informs and misinforms your agency’s stakeholders, payers and customers. It also creates an opportunity for EMS leaders to communicate their value, for owners and operators to assess the balance of short-term and long-term economics and for field providers to take stock of their employment conditions.
Here are four things those leading and working for EMS agencies should be thinking about following the Times investigation.
1. Tell your story
Assume your municipal leaders read the Times article and that you have civilians in your response area wondering about who will respond and how quickly an ambulance will arrive if they were to call 911.
Invite your local media to report a story on how EMS is funded locally, the challenges of collecting payment for services and the relationships between EMS, other public safety agencies and hospitals to achieve the best possible patient outcomes. Point out your differences and the patient-centric business decisions your agency has made.
2. Diversify revenue
Private equity firms are able to take a risk on EMS agency investments because they own a diverse portfolio of businesses with exposure to multiple markets, customer bases and product lines. In addition to TransCare, Patriach Partners owned 70 other businesses.
Every EMS agency should examine how it is funded and if the mix of reimbursement from taxes, patient billing, grants and other sources is adequate to meet short-term cash flow needs and long-term mission sustainment.
3. Invest in the money makers
Every business has personnel who make direct contributions to revenue and personnel who support the money makers through indirect contributions to revenue. EMTs and paramedics are money makers with every patient contact.
The money makers need ongoing reinvestment and support through education and training, as well as programs to increase their morale, health and longevity with the organization.
The Times critique of the Rural/Metro “Do the Write Thing” missed the point of an important training program. Teaching EMS personnel the importance of good documentation and its connection to payment for services is critical for every type of EMS agency.
Patients have a right to the coverage they are eligible to receive — private insurance, Medicare or Medicaid — and EMS agencies should collect payment for the services they provide.
4. Field providers need to get out before investors
When a private equity investor cuts its losses and liquidates a poorly performing investment, we can be confident those investors have other income streams, will not be seeking unemployment insurance or be looking for job retraining. They have more likely successfully lobbied for regulations to protect their liability from those poorly performing investments.
It is the field providers who have likely hung with a terrible employer for far too long and acutely feel the pain of job loss. The Times investigation gave a useful list of symptoms that should trigger any EMS provider to get off a sinking ship as quickly as they can.
- Stealing supplies: “Paramedics in New York had to covertly swipe medical supplies from a hospital to restock their depleted ambulances after emergency runs.”
- Mandated shifts: “Bryson said she had worked two 24-hour shifts back to back before the call about Ms. Maher came in. Ms. Bryson was technically off the clock, she said, but a replacement hadn’t yet arrived.”
- Ambulances don’t run: “On the day TransCare filed for bankruptcy, more than 30 percent of the company’s vehicles were out of service, some for hundreds of days.”
- Supervisors pay for supplies: “Supervisors regularly paid for supplies out of their own pockets and hoped for reimbursement.”
- Paychecks bounce: “Worried the checks might bounce, some (TransCare employees) piled into emergency vehicles and raced to a 24-hour check-cashing store.”
Loyalty is admirable and honorable. But there is a big difference between helping your EMS employer navigate troubled waters and staying with your employer as the ship augers into the bottom of the ocean.
If you are on a ship heading for the sea floor, the short-term inconvenience of job searching and potentially moving is much better than waiting until you are out of work with no income to find a job. Your safety — physical and fiscal — should always be your top priority.
