Competition creates tension between Tenn. ambulance companies
A new ambulance headquarters in the county has created more jobs, but at the expense of drawing employees from other local firms, which has resulted in a lawsuit
By Josh Flory
KNOXVILLE, Tenn. — A well-known incumbent, an upstart challenger and a battle over health care.
It may sound like the latest dispatch from the political campaign trail, but this back-and-forth tussle is a business dispute, with market share in East Tennessee’s medical transport sector up for grabs.
In February, fledgling transport firm Priority Ambulance announced plans to establish its corporate headquarters in Knox County and bring more than 50 jobs to the area.
Since then, the company has moved to hire workers from other local ambulance firms — including the dominant player in the market, Arizona-based Rural/Metro Corp. — and has inked service deals with two municipalities.
In one case, Rural/Metro has responded by going to court. In May, an affiliate of the company sued the city of Lenoir City, alleging among other things that city officials were trying to prevent the company from transporting Fort Loudoun Medical Center patients to destinations outside the city.
The wrangling comes despite the fact that a major plum is off the table for now. In 2012, Knox County awarded a five-year contract for the county’s emergency ambulance service to Rural/Metro, which has had that contract since 1985.
The CEO of Priority Ambulance is Bryan Gibson, a former Rural/Metro executive who most recently was CEO of FirstMed EMS, a North Carolina-based ambulance firm that was owned by a private equity company called Enhanced Equity Funds.
Gibson’s hiring at FirstMed was announced in July, but FirstMed abruptly closed its operations in December.
A lawsuit filed the same month alleged that approximately 2,000 employees were terminated by the company. Gibson has said he only worked at the company for 120 days, and was brought in to try and turn it around.
Priority is a portfolio company of the same private equity firm, although Gibson said that when he joined FirstMed “there was no idea of launching anything else.”
In fact, Gibson indicated EEF was one of several private equity firms that were interested in the management team he had put together.
“We had an opportunity to make several different choices, which financing arm to choose,” he said. “And we understood and liked EEF because they had a sense of the industry.”
Rural/Metro has traveled a rocky financial road in recent months. The company filed for Chapter 11 bankruptcy protection in August, a proceeding that has left some local companies with unpaid claims.
Gregg Swersky said that years ago, Rural/Metro was one of the first clients that he landed as a salesman for Revenue Recovery Corp., the local collection agency that he now leads.
According to bankruptcy documents, Revenue Recovery filed a claim of more than $125,000 in the case, and Swersky indicated he only expects to get 10 to 12 percent back.
“It was hard to swallow but it was part of doing business, and it does happen,” Swersky said.
Several former Rural/Metro officials have joined Priority, including Dennis Rowe, Rural/Metro’s former East Tennessee general manager; Rob Webb, a former division general manager; and Ron Parker, the former market general manager for EMS operations in Blount County.
Asked about Priority’s recruiting, Gibson estimated that EMTs and paramedics were initially offered bonuses worth up to $5,000 and $10,000 respectively, although he said he wasn’t aware of current bonus offers.
As for management positions, Gibson said many of the new hires were familiar with him, adding that wherever they came from “they understand that we understand that it’s a local business and we want to be community involved.”
Priority last year donated $5,000 to a Wreaths Across America team sponsored by Knox County Mayor Tim Burchett, and the company also hired former Knox County Commissioner John Mills as director of government relations. (The company also contributed $400 to a recent East Tennessee Children’s Hospital fundraising effort by a News Sentinel reporter.)
Which isn’t to say that Rural/Metro is sweating the competition. Jerry Harnish, the company’s regional director, said his company has 720 employees in East Tennessee, most of them in Knoxville, and that the number of Rural/Metro employees hired by Priority has “not been significant.”
He also noted that there are several companies competing for non-emergency service in Knox County, saying that “we’ve not noticed any decline in transports. We’re up a little over last year.”
While the Knox County emergency contract isn’t up for grabs right now, Priority has managed to secure emergency service contracts in both the city of Loudon and Lenoir City.
Don White, the public safety director in Lenoir City, said that previously, Rural/Metro would dispatch ambulances from outside the city limits, but that Priority has committed to provide two ambulance crews inside the city.
“We had just never been approached before about actually having our own ambulance service,” White said, adding that the arrangement doesn’t require the city to pay anything.
Lenoir City attorney Jim Scott said he expects the lawsuit filed by Rural/Metro to be withdrawn or dismissed. Rural/Metro did not respond to a request for comment regarding the lawsuit.