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Iowa nonprofit ambulance agency asks to be county department to stabilize its finances

“The cost of actually providing services has really outpaced the reimbursement receipt,” said Linda Frederiksen, executive director for MEDIC

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MEDIC expects to fall $1.51 million in the red in fiscal 2023 as costs to provide ambulance services outpace reimbursements, executives say.

Photo/MEDIC EMS

By Sarah Watson
Moline Dispatch and Rock Island Argus

DAVENPORT, Iowa — A possible solution is on the table to stabilize MEDIC’s finances as the ambulance service in Scott County faces staffing shortages and rising operating costs.

But it’s unclear if Davenport is on board.

MEDIC, the nonprofit ambulance service serving nearly all of Scott County, is asking the supervisors to declare emergency medical transportation an “essential county service” and make MEDIC a county department, funded in part by taxes.

As a nonprofit, MEDIC expects to fall $1.51 million in the red in fiscal 2023 as costs to provide ambulance services outpace reimbursements, executives say.

“The cost of actually providing services has really outpaced the reimbursement receipt for providing the service,” said MEDIC Executive Director Linda Frederiksen. “Pretty much every time an ambulance service, in general, goes out on a call...They’re almost always writing a deficit check to their bank account, sadly.”

The move to be part of county government, MEDIC executives say, would stabilize the ambulance service’s budget, allow them to pay competitive wages, and ensure ambulance service is available for county residents that call 911.

Patient trips in a MEDIC ambulance are reimbursed from fees, billed to a patient’s insurance. Frederiksen said federal and state programs that insure seniors, low-income individuals and people with disabilities — Medicaid and Medicare — typically reimburse at rates lower than what it costs to make an ambulance trip.

A combination of staffing shortages driving higher wages, more patients with Medicare and Medicaid, and higher costs of supplies have made MEDIC’s budgets harder to predict, Frederiksen said.

MEDIC expected a loss of $800,000 in fiscal 2022 but actually netted about $300,000. Frederiksen said that the unexpected surplus could be attributed to delayed spending on new ambulances, a leaner staff, and more privately insured patients than expected with higher reimbursement rates.

Under the proposal supervisors discussed Tuesday, Scott County would declare EMS an “essential county service” and MEDIC would be considered a department of the county.

If supervisors approve, MEDIC’s funding shortfalls could be covered by a new property tax that would need to be approved via voter referendum or from Scott County’s general fund, which would not need to be on the ballot.

Already, the county sets aside up to $200,000 each year to cover MEDIC’s budget shortfalls.

“Really, we’re talking about upping that support,” said Scott County Budget Director David Farmer.

On Tuesday, supervisors seemed to support the concept of MEDIC as a county department and asked staff to further research the transition from MEDIC as a nonprofit to part of the county government.

If supervisors decide to fund MEDIC through a voter-approved tax, called a 422D agreement, it could go on the ballot as early as spring 2023, but would more likely be fall 2023, Farmer said. Sixty percent of voters in the election would have to approve the provision, which could be a local income surtax or a property surtax.

County Administrator Mahesh Sharma said MEDIC, with an expected $13.1 million budget, would become the second-largest department of the county.

“Bringing in MEDIC to the county would be a very large, but very accomplishable task,” Farmer said.

Farmer said if the county does bring MEDIC under the county’s wing, it could unlock more state and federal funds since MEDIC would have a governmental status instead of a nonprofit.

Davenport exploring EMS through its fire department

Supervisors peppered Farmer and Frederiksen questions on Tuesday about what would happen if Davenport decided to offer its own emergency medical transport system.

Frederiksen said about 19,000 of MEDIC’s roughly 36,000 calls each year are from Davenport. Without those calls, Frederiksen and Farmer expressed, the cost to provide the service would go up and response times could slow with fewer staffed ambulances.

Farmer said without those calls, the county taxbase’s support (which includes Davenport) for MEDIC could increase from $1.5 million (the 2023 estimate) to $5 million annually. He said that’s because the county could be paying for staffed ambulances that wouldn’t field as many calls.

“We would be creating a fragmented system, which would impact service delivery for all residents of Scott County,” Farmer said. “It would impact relationships for emergency medical transports for hospital systems in our area. It would potentially create a larger tax burden for the county and for Davenport if the city goes on its own.”

In an email, Davenport City Administrator Corri Spiegel wrote that the city continued to research emergency medical transportation models.

“The City has been researching different models that exist in Iowa and evaluating how emergency medical transport services may be provided in Davenport in the future,” Spiegel wrote. “We continue to refine the service delivery modeling, which includes an option of Davenport Fire providing service within our community.”

Staffing down as calls for service have risen, MEDIC says

Frederiksen said as MEDIC faces staffing shortages, calls for service have increased 20%.

“That’s huge,” Frederiksen said.

Frederiksen said across the industry, emergency medical professionals are facing burnout after the COVID-19 pandemic. MEDIC is down 15 emergency medical technicians, she said, but MEDIC is working on recruitment through programs in Eastern Iowa Community College.

“In all occupations, there’s just not enough people out there to fill these positions,” Frederiksen said.

Most supervisors expressed support for a county-wide ambulance service, and plan to ask staff to further explore the transition of MEDIC to becoming a county department.

Frederiksen said response times have been “a little bit longer than we want them to be,” with short staffing and increased calls.

Frederiksen said the service aims to respond to 90% of life-threatening calls within 7 minutes and 59 seconds. She said more recently, MEDIC has responded to about 80% of calls in that time frame because of short staffing.

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