By Todd Sheridan
Deployment metrics enable EMS administrators to demonstrate the productivity of their agency, show a return on investment and effectively use resources. Since many new EMS leaders lack familiarity with deployment metrics, they may struggle with meeting budget goals and contractual obligations, jeopardizing the stability of the agency.
Equipping new EMS leaders with an understanding of deployment metrics will prepare them to maintain a stable budget while keeping up with dynamic customer demands.
Deployment metrics assess how well a system is performing in terms of supply and demand. Demand is volume — the number of requests for service, and the number of actual transports. Supply, most simply, is the number of ambulance units in service.
Charts can help you tell a story or pitch a solution, especially to stakeholders within the department and community. For example, a graph that compares supply and demand — deployment and volume — conveys a simple, powerful message.
Graphic comparison of supply and demand. (Courtesy photo)
However, units that are not deployed effectively will not meet demand. A more useful measure of system performance is response time compliance or the percentage of responses that meet a time to arrival on-scene goal. Timely and accurate dispatch data is critical to deriving useful numbers to calculate response time compliance.
Volume and response time compliance can, and should, be measured daily to allow leaders to make immediate adjustments for overall performance improvement. Monthly and annual reports can reveal trends and inform strategic decisions and budgeting.
Understand cost of doing business
In addition to managing system performance, EMS leaders must understand the cost of doing business to successfully manage an agency budget and make strategic decisions. Unit hour cost, or burn rate, is an easily calculated measure of the cost of doing business. It is calculated by dividing total unit hours [1] by total operating expense. Analyze unit hour cost monthly to compare current costs against your annual budgeted unit hour cost.
Once you calculate the unit hour cost, you can determine how many transports each unit needs to perform during a shift to support the organization’s operating margin, which is net revenue minus the total expense.
To calculate the number of transports each unit will need to perform, multiply the unit hour cost by the length of the shift to determine the cost of that shift. Divide that cost by the average amount of revenue collected per transport to determine how many transports are required for that unit to cover its own cost. The agency operating margin will determine how many additional transports may be needed.
Calculating unit hour cost also allows an agency to budget using predicted volume, based on historical trends. Divide the estimated total number of annual transports by budgeted annual unit hours to arrive at the target unit hour utilization (UHU). For example, if during the calculation you determined that your agency needed to conduct 3,000 transports during the year, and you were budgeted to have 10,000 total unit hours, then you have a target UHU of 0.3 (3,000/10,000).
An agency can then use this value to estimate profit or loss, based on unit hour cost. By setting a target operating margin, and predicting volume, it is then possible to determine the supply of units needed to meet system needs while remaining financially stable. UHU can be monitored frequently to determine how daily performance impacts budget goals. Assigning a dollar value for each transport to the UHU (by dividing the target UHU by the cost per unit hour) can enable leaders to precisely measure system performance. This is critical, as it enables a very tight feedback loop; staffing and deployment patterns then can be adjusted quickly to match dynamic system requirements.
Low UHU calls for adjustments in order to keep the agency financially stable — revisit staffing levels, evaluate the deployment plan and consider other sources of missed revenue opportunities, such as referrals to other agencies when your agency has units available. However, high UHU may also require staffing and deployment adjustments to meet response time compliance and prevent employee fatigue and burnout.
EMS providers who take on leadership roles usually face a very short runway to develop crucial new skills in resource management. Often, little from their career up to that point has prepared them for this new responsibility. It is important to demystify this skill set as early as possible. Frequent discussion and review of agency deployment metrics can empower street level supervisors and even frontline employees to make decisions that support system success.
[1] Total unit hours are calculated by adding together the hours that each unit is in service. For example, if during a 24-hour period you have 4 ambulances in service the entire time, and another 3 in service for 12-hour shifts during the day, the total unit hours for that 24-hour time is 132 ((24*4)+ (12*3)).
About the author
Todd Sheridan, a senior associate with Fitch & Associates, is a performance-driven leader with expertise in operations, organizational development and data analysis. Currently, Todd serves as a Director of Operations for Robert Wood Johnson University Hospital in New Jersey through an interim management contract with Fitch & Associates. Before joining Fitch & Associates he served in various EMS and fire agencies including with the Richmond Ambulance Authority.
