‘Even not-for-profit doesn’t mean all-for-free’

As prices soar on gas, lumber and consumer goods, EMS cannot follow market forces to increase prices for our services

With vaccinations for those that want them underway and the infection R number – the projected number of people that one infected person will pass on a virus to – dropping to a manageable level, the storm that has been the public health pandemic seems a little calmer.

There is, however, a staffing and financial tidal wave that has been accelerated by the COVID-quake heading to our shores. The EMS news, full of optimistic reports of bail-out funding and new programs, is countered by closures and reductions in departments, agencies and services.

Last week, the “New York Times” reported that at least 10 ambulance companies in Wyoming are in imminent danger of closing and this scenario is beginning to play out across the country. The article accurately sums up the situation:

"... We as an ambulance industry cannot follow market forces to increase prices for our services when there are fluctuations in the market. We are locked into contract and government rates and the option to bump the price and have it paid, as we all know, is near to zero," Lawrence writes. (Photo/Getty Images)

“The ambulance crews that service much of rural America have run out of money and volunteers, a crisis exacerbated by the demands of the pandemic and a neglected, patchwork 911 system. The problem transcends geography: In rural, upstate New York, crews are struggling to pay bills. In Wisconsin, older volunteers are retiring, and no one is taking their place.”

Meanwhile, on the East coast, the Richmond Ambulance Authority (RAA) is facing a million-dollar cut to its subsidy that was put in place to fund the high levels of uncompensated care caused by the lower socio-economic levels of RAA’s payer mix. For RAA, an internationally respected EMS system that has mastered the delivery of high performance, high-value mobile healthcare with an extreme focus on financial and operational efficiency, this may come as a blow as margins in their 501c3 organization are and were already tight. This one hits close to home, as the former COO of RAA, I often noted the harsh economic fact that not-for-profit does not mean all-for-free – everything costs something, whether it is the financial or human capital.

Rural America has taken much pride in caring for itself over the decades, with volunteer rescue squads and fire departments providing local and personal care to the community, shaking the boot outside the local supermarket and conducting fundraisers to keep the wheels on. This gift of time and effort created a free good that localities enjoyed, and county budgets most probably did not need to account or accrue for. Over time, that has changed, as volunteers and volunteering have diminished. That gap has had to be filled with combination services of paid and volunteer staffs, increasing the cost of doing business and, in many cases, this is an unfunded mandate, but someone has to pay.

The NYT quoted Andy Gienapp, the recent administrator for emergency medical services at the Wyoming Department of Health; “Communities are faced with confronting the very real crisis of, ‘We don’t know how we’re going to do this tomorrow because nobody’s doing it for free.’”

Everything costs something. In the case of the City of Richmond, city officials observed that the pandemic had impacted tax revenues and forced the city to make cuts across city agencies, including freezing about 600 jobs and pulling from its rainy-day fund to make it through the current fiscal year. The problem is, cutting EMS funding could turn that rainy day into a disastrous tempest.

Market forces and EMS costs

Money doesn’t grow on trees – well perhaps. Since the beginning of the public health emergency, lumber prices per thousand board feet soared more than 348%. The solution for wholesalers and home improvement suppliers is to increase the retail price and pass the cost on to the customer, whether they are buying a new house or a piece of plywood.

What does that have to do with us? The answer lies in the fact that we as an ambulance industry cannot follow market forces to increase prices for our services when there are fluctuations in the market. We are locked into contract and government rates and the option to bump the price and have it paid, as we all know, is near to zero.

In the absence of volunteers, municipalities must be prepared to fully and appropriately fund and resource lifesaving in their communities. This must be achieved by investment from the public purse and by supporting the legislative and political efforts to ensure sources of federal payment for services delivered are realistic and reflect both the cost of doing business and readiness.

As we begin to emerge from the pandemic, we can celebrate that throughout it all, we, as a profession, did the right thing and bailed out the wider healthcare community with our actions. With that done, we must now face the reality that the industry needs intensive care and focused life support.

Luckily, our collective national associations, acting in unison since the beginning of the public health emergency was declared, have worked hard to secure funding and waivers to provide relief. The recently announced confirmation that payment for treatment in place (TIP) is effectively backdated to March 1, 2020, is some good news and represents a concerted collective effort in association lobbying.

But in the final analysis, we all need to rally to ensure that our elected officials at every level of the political stratosphere, from the national capitol, through state houses, to boards of supervisors, can see the wood from the trees and understand the risk to the emergency response coverage they are facing.

EMS One-Stop With Rob Lawrence

In this episode of EMS One-Stop With Rob Lawrence, Rob is joined by Justin Grohs, manager at Great Falls Emergency Services, Montana. Grohs also serves the American Ambulance Association as chair of the Rural Task Force.

Together, they discuss the realities, challenges and funding of rural EMS, where staffing and financial stressors have been further exacerbated by the pandemic.

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