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Drawing a line on ambulance services

Debate rages on whether city firefighters or private firm should respond to medical calls


by: TRIBUNE PHOTO: JAIME VALDEZ - Portland Fire & Rescue firefighters Brady Donahue, Lt. Mike Wight, Sam Mulder and Monte Shirley assist a man who fell down on the sidewalk in front of Pioneer Place in downtown Portland.It’s 2:40 p.m. on a sunny Friday when a 9-1-1 dispatcher notifies Fire Station No. 1 that an older man fell and hit his head on the sidewalk in front of Pioneer Place shopping center. The man’s head is bleeding, but it’s unclear if he had a heart attack, seizure or just stumbled.

A minute later, a Portland Fire & Rescue engine arrives and four firefighters jump out. One asks the man and bystanders what happened. One applies pressure to the man’s forehead to stem his bleeding. Another readies a bandage to apply to the wound.

Three minutes later, two American Medical Response paramedics arrive via ambulance.

There’s little chatter among the six firefighters and paramedics; everyone seems to know exactly what to do and who should do what.

At 2:45 p.m., the AMR crew pulls out a stretcher, carries the man to the ambulance, and drives him off to a hospital emergency room. Firefighters clean the blood off the sidewalk and head back to the downtown fire station at 2:48 p.m.

If the man has private health insurance, AMR might get paid $922. Portland Fire & Rescue won’t get anything except the satisfaction of helping a man in need.

As city officials and others look to prune spending, some question whether there’s a duplication of service between the Fire Bureau and ambulance company, and if six people really are needed to respond to nonemergencies. Others say it’s time for the Fire Bureau to take over the ambulance company’s emergency medical services contract.

“There is potential significant new revenue to the city in assuming the ambulance transport service,” the City Budget Office suggests in its analysis of Portland Fire & Rescue’s 2013-14 budget request. Fire departments in Eugene, Bend and elsewhere provide ambulance service, and Portland could collect $26 million to $39 million a year in fees if it followed suit, the budget analyst notes.

City Commissioner Steve Novick is angling to oversee Portland Fire & Rescue when Mayor Charlie Hales doles out bureau assignments to fellow commissioners, and wants to be an agent of change at the bureau.

Novick has talked about wanting to see the Fire Bureau take over ambulance service, though he has since softened that position. Portland Fire & Rescue Chief Erin Janssens got the message.

She’s begun collecting data on the idea and researching what transpired two decades ago, when the bureau made an earlier bid to take over ambulance service. “I believe the mayor is probably supportive of our pursuing this,” Janssens says, noting that Hales was the city commissioner in charge of the Fire Bureau at the time.

Noah Siegel, Hales’ policy director, says the mayor doesn’t have a “burning passion” to take over ambulance service this time around, but it’s definitely on his radar. “We’ve all mentioned it as something worth another look, but that’s pretty much as far as it’s gone,” Siegel says.

The Fire Bureau’s 1993 bid, supported by Multnomah County commissioners who oversee ambulance services, was rejected after a bitter political fight. Ambulance paramedics, fearful of losing their jobs, gathered signatures to force a 1994 referendum, and county voters sided with them.

Multnomah County commissioners are talking about re-opening the ambulance-contract bidding process next year, well in advance of the September 2015 expiration of AMR’s contract. County spokesman Dave Austin says county commissioners will turn to the issue after they pass the county’s 2013-14 budget, within a few weeks.

Dr. Jon Jui, Multnomah County’s medical director for emergency medical services, isn’t so sure the county will be ready for bidding next year, given the “revolutionary” changes under way in state and federal health care. Reconfiguring ambulance services should be part of the transformation that is under way, Jui says. Though it’s not his call, he says it’s “intuitively obvious” that the county should delay reconfiguring its ambulance system until it knows how pending reforms will clarify who is paying the bills and how reimbursements will occur.

Novick, a health policy wonk, understands that, and has changed his perspective about seeking a city takeover of ambulance service. The system is irrational and inefficient, Novick says.

“Although the Fire Bureau provides a medical service, they don’t get paid for those medical services,” he says. And ambulances only get paid if they transport a patient to an emergency room, which often is unnecessary.

Just replacing the ambulance company with the Fire Bureau won’t solve those problems, he says.

Dual role

City officials around the country argue they must post firefighters around the clock anyway in case of fire or other emergencies, so it doesn’t cost much extra for them to respond to medical emergencies and then transport patients to the hospital.

Randy Lauer, American Medical Response’s general manager in Oregon, says it makes sense for firefighters to respond to medical emergencies because they often can get there faster, and urbanized areas generally require more plentiful fire stations than ambulance posts. But he says the city overstates the money it might make by taking over ambulance transport services.

“When they get into the full analysis of this, they’ll figure out that it’s going to cost the city more than they’re going to wind up collecting in revenue,” Lauer says.

About 70 percent of AMR’s costs are in personnel, he says, and firefighters earn more than AMR paramedics and get far more more expensive pension and other benefits.

Around the country, some fire bureaus are taking over ambulance services, as Portland is considering, but others are getting out of the business, says Jay Fitch of Fitch & Associates, a prominent EMS consulting firm based in Missouri. Costly public pensions are often a major reason for privatizing ambulance services, Fitch says.

About 22 percent of the patients AMR transports to emergency rooms don’t pay anything because they have no insurance, Lauer says. About half of those transported are insured by Medicare and Medicaid, which only pay AMR $408 — the same amount they paid 12 years ago, Lauer says.

That’s why the base rate of $922 is so high, to make up for those who aren’t paying their share. For every dollar the base rate were to go up, AMR would only collect an additional 18 cents, says Lauer, who argues the current reimbursement system is not sustainable.

Dr. Justin Denny, the new Multnomah County health officer, empathizes with AMR. “These folks are making about $30 per transport in income for the company,” he says. “And that profit margin is shrinking over time.”

If the city takes over ambulance service, Jui says, “I’m not sure it’s going to be a money-making proposition.”

Sticker shock

People transported by ambulances are often outraged by the $922 bill, but that pales in comparison to their hospital tab. However, ambulance services “literally open the door” to higher spending in the American health care system, Lauer says.

People without insurance know they can dial 9-1-1 and get emergency or first-aid service at their doorstep, plus medical treatment at a hospital emergency room, often without paying. More and more people without health care insurance are using the EMS system as a substitute, Jui says. Neither 9-1-1-dispatched ambulances nor hospital emergency rooms will deny service for lack of ability to pay.

Yet emergency rooms are one of the most expensive ways to deliver health care services. And they’re not designed to provide the kind of preventive care that can lead to lower costs down the road.

Then there’s the fear of lawsuits, which literally drives many ambulance companies to take people to emergency rooms even when it’s clear there’s no real emergency. “We’re very conservative because of that,” Lauer says. That’s why any comprehensive health care reform should go hand in hand with legal liability or “tort” reforms, he says.

Jui favors changing the way ambulance services are paid to a “capitation” model, in line with the health reforms pushed by Gov. John Kitzhaber and Oregon’s new Coordinated Care Organizations, and encouraged by the Obama administration. Under that model, an ambulance provider would be paid a lump sum to offer services — as needed — for the entire coverage area, based on the total population served. The idea is to cut down on overuse of ambulances and emergency rooms, and shift to more preventive health care to lower long-term costs.

Novick likes Jui’s idea, and says he is heartened by Multnomah County Chairman Jeff Cogen’s interest in a more creative approach to the ambulance services.

“The reason for taking over the ambulance service would be to have a more rational, integrated system,” Novick says. “We don’t need to take over the AMR contract to make that work.”