What San Diego’s Ambulance Contract Is Worth

What San Diego’s Ambulance Contract Is Worth

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Lots of people want to run San Diego’s ambulances. There’s money in medical emergencies.

The city’s inching toward putting its ambulance service contract out to bid, and two private companies, with high-powered lobbyists in tow, and the city’s fire union have all made clear they’d like the job.

Just how much money they’re all fighting over, however, isn’t clear. A New York private equity fund owns the city’s current ambulance provider, Rural/Metro, and its financial information isn’t public.

Dissecting what the city’s ambulance contract could be worth provides a window into why everyone wants it so badly. You can do a rough estimate in two easy (and one not-so-easy) steps.

How Often People Use Ambulances

Every time someone calls 911 for medical help, the city sends an ambulance. Those ambulances take people to the hospital 90,000 times a year. That’s the first key data point.

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What Ambulance Trips Cost

When someone goes to the hospital in an ambulance, Rural/Metro charges that person. The average patient charge is written into the company’s contract with the city and now stands at $1,820. This is the second key data point.

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From here, the calculation seems relatively straightforward – and it looks like the ambulance contract is worth a ridiculous amount of money: $163.8 million a year.

Ambulance Equation How Much People Actually Pay

Now comes the hard part. Rural/Metro doesn’t get all the money it actually bills people. Medicare, the federal health plan for senior citizens, says that the company can only receive up to $444 for the highest-priority ambulance rides in San Diego no matter what the company charges everyone else. Some other people don’t pay their bills.

The percentage of ambulance bill payments the company gets – its collection rate – is the not-so-easy step to figuring out the ambulance contract’s value.

Michael Simonsen, Rural/Metro’s spokesman, wouldn’t say what the company’s collection rate was. His competitors, he said, would love to know.

“They have smart people,” Simonsen said. “They can try and figure it out.”

What matters is what kind of health insurance the people taking the ambulance trips have, said Bob Holdsworth, a Connecticut-based EMS consultant.

Medicare patients make up more than a third of ambulance riders statewide, according to the California Ambulance Association. Ambulance systems also collect less than their sticker price from patients with Medi-Cal, the state-run insurance for residents with low incomes, and those with federal military insurance, because those health plans, like Medicare, also pay ambulance providers lower rates. Add in the uninsured and those with private insurance to round out what a collection rate might look like.

“It’s a function of who is in the ambulance,” Holdsworth said.

Frank De Clercq, the head of the local fire fighters union, has tried to do the math when figuring out how the city’s Fire-Rescue Department might be able to compete for the ambulance contract. He estimated that Rural/Metro’s current collection rate is around 33 percent.

Let’s assume De Clercq is right. If the 33 percent collection rate is right, then annual ambulance revenue works out to $54.6 million.

“I think you’re in the ballpark,” Simonsen said.

Ambulance Equation 2This estimate means that San Diego’s ambulances bring in just a little less than the Tampa Bay Rays baseball team’s payroll this year.

The $54.6 million figure also matches up well with what Rural/Metro has put on paper recently.

Before private equity fund Warburg Pincus finalized its purchase of the company in 2011 – Rural/Metro’s now in bankruptcy – the company talked about San Diego’s ambulances in a Securities and Exchange Commission filing.

Rural/Metro said it expected to make $55 million a year in revenue in its two-year contract with the city that ended this June. That number included the value of the company’s transport services between hospitals and additional revenue for providing services at special events. Both of those services could well be in the city’s next ambulance contract – and the $54.6 million estimate doesn’t take their values into account.

But a few trends show that ambulance revenues in San Diego are growing. The average cost of an ambulance trip has gone up almost 40 percent in the last four years and Rural/Metro’s seen a spike in calls, meaning more rides to the hospital.

Of course, none of these numbers take into account how much it costs to provide ambulance services to the city.

For instance, Rural/Metro pays the city more than $10 million a year for the exclusive right to transport 911 patients, a number that has increased along with an ambulance trip’s price tag.

“By far, the biggest beneficiary of this contract financially is the city of San Diego,” Simonsen said.

Rural/Metro’s ambulances go to about 120,000 911 calls each year, but only take someone to the hospital three-quarters of the time. That means the company doesn’t get any money from a quarter of its ambulance responses.

And whoever ends up winning a new contract has to supply enough ambulances, EMTs, paramedics and computer programs  to make sure they show up to medical emergencies when they’re supposed to.

To make money off the deal, ambulance providers will have to figure out how to do all of it for less than roughly $54.6 million.

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Liam Dillon

Liam Dillon

Liam Dillon is senior reporter and assistant editor for Voice of San Diego. He leads VOSD’s investigations and writes about how regular people interact with local government. What should he write about next? Please contact him directly at liam.dillon@voiceofsandiego.org or 619.550.5663.

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20 comments
ConcernedCitizen1904
ConcernedCitizen1904

Can the city actually afford to bid for the contract? Haven't issues already been brought up concerning San Diego FF's not being paid enough and leaving to work for other cities. What would this mean for us, would we see and increase in taxes to make up for the the 30 ambulances and all the equipment to supply them. Which by the way I've heard is around $150,000 to $200,000 each ambulance, not to mention the wages of these crews. plus benefits. Why not just dump the cost on a private company? Unfortunately for the employees of these companies they don't get paid enough. Avg EMT in San Diego makes $10.00hr and Paramedics make $15.00hr with private companies. Whereas Fire medics and Firefighters start of their employees at $45,000 to $60,000 a year. Seems to me it would make more since to let the private companies handle it. Especially if there are companies out there that can supply better equipment and competitive prices that have been around for awhile.

Aaron Klein
Aaron Klein subscriber

Fit4duty. Thank you, I will look up those writing and videos. I know that it would not be a cost neutral system if the fire dept. took over EMS but my understanding is that all money would have to stay on the EMS side and would not be able to be used for any fire suppression budget items. But the City is prevented from making a "profit". Unlike for profit companies obviously. Also, what do you think about the fact that these "private" companies get to use the fire side for assessments, patient treatment and free labor? I know they are charged some fees by the city but I wonder if there is an EMS system out there that is solely run by a for profit agency? One where they have to have all the employees necessary for lifting bariatric patients for instance? What would the transport costs be?Or how limited would the service be? Private, for profit EMS providers are heavily subsidized by the taxpayer simply by using public fire agencies as free labor.

Aaron Klein
Aaron Klein subscriber

I work downtown, station 1. I will read your response a little better and respond with more detail but one point I would like to make about the fact that the City charges the franchise fee and rent that you say is running up costs for the end user...what do you think profit does? Rural Metro is able to make money because they are operating in one of the few sections of public safety that can actually bill for the service they provide. The fire side does not bill for putting out fires in homes or responding to traffic accidents where we do initial mitigation of leaking fuel. We do not charge for responding to busted sprinkler heads where we do salvage and overhaul and stop more damage from happening. There are tons of issues that the fire side deals with every single day that we do not charge for. We do it for the common good and it is paid for collectively by the citizens of San Diego. And now another point about the EMS side. I am a paramedic and a firefighter. The majority of work I perform are medical assessments and treatment responding on a fire engine. I start I.V's, give meds, do radio reports, etc. I would guess that at least half of all the work performed for our patients is done by a fire medic working off a fire engine. Do we charge Rural-Metro for that? Do we keep track of our hours and then bill Rural-Metro? No. Rural-Metro charges their patients for the work we do. If Rural-Metro was solely responsible for ALL medical treatment they would have to run duel medics and probably run three person ambulances at the least because they would not have firefighters to carry gear and lift gurneys and go to the hospital with critical patients, etc., etc., etc. So you claim that the franchise fee and "rent" drives up costs for the end user. I think that Rural-Metro, a for profit, privately held company, is making tons or money and getting a HUGE subsidy from the tax payers already. If the fire side was only fire, the costs of transports would either have to be way higher, or the care would have to be much less. And this is the way it is nation wide. I am fine with private companies bidding for EMS contracts. But if they had to make their money without using the taxpayer funded public safety system already in place, they could not do it. I hope you can see my point. It is that for profit companies are not operating like most companies. They are living on top of the taxpayer and no one seems to see that. You stated that the fire stations exist for the public good? I agree. But right now these fire stations are operating for the good of Rural-Metro and their stockholders. Oh, and about those five medics R-M gets for free every day? It's actually more. Yesterday it was seven. I forgot we still have single role medics who are City employees. They are probably the most experienced medics in the system so I feel bad that I missed that the first time. My apologies to them.

Aaron Klein
Aaron Klein subscriber

Hummm. Interesting opinions. Im guessing you have some ties to Rural-Metro but are not stating that in order to seem unbiased. I've thought that on one of your past posts as well. Maybe I'm wrong. I will be upfront about my back ground. Im a San Diego fire medic and former Rural-Metro employee. And you are correct that many of R-M employees are dedicated and hardworking...but they dont stick around very long because R-M pays diddly for wages. You state an average of $65,000 for a medic? Hardly. Try more like $65K for a full crew. The medic makes about $38 and the emt makes under $30. I know. I was there not that long ago and I left to make a livable wage. R-M knows they can pay that because there are lots of people who need the box time to lead into other careers. And as for the fact that R-M should not have to pay for using City buildings? So a private, for profit company should get free use of taxpayer maintained facilities? R-M needs to house their ambulances somewhere. If, as happens in other areas, they had to rent or buy facilities it would be more expensive and the cost passed along to the user would be a lot more than it is now. Also, as to that $10 million, what about the "free" employees R-M gets each day. Every day 5 firefighter-medics work on ambulances. We call it our Paramedic Rotation. The transports we bill end up in R-M pockets not the City of San Diego. But the cost of these paramedics is on the City. At a very conservitive estimate of 5 transports a day these ambulances would generate nearly $6 million revenue for R-M, all while paying just half a million in employee costs. That $10 million is offset quiet a bit by these ambulances. And finally for me, I just don't agree that you should make a profit at the expense of peoples lives. R-M is a for profit company. They are responsible to their stockholders. They make money by running more calls per ambulance per shift so there is a limit to the number of ambulances they will put on the street. The City is not out to make a profit. Even staffing each ambulance with much more expensive firefighters, the City could put twice the number of ambulances on the street at all times and still operate well under the $50 plus million mark and have lots of money left over for maintenance, training, upgrades to equipment, etc. In the end, the cost per transport could drop and "the poor working guy/gal who doesn't have insurance" could see some real relief.......... Because the City would not be trying to make a PROFIT! I'm sure you are not going to agree with me but at least I'm in the system and helping the citizens of San Diego each day. I did it once for Rural-Metro, now I do it as a firefighter. Do you have experience with EMS? I actually think you do, I am curious to know how.

Chris Brewster
Chris Brewster

Mr. Dillon: Did you look into the possibility that the Affordable Care Act may significantly increase collections? I would think that if larger numbers of people are insured (especially those who may presently be over-using the service), that 33% may be in the rearview mirror. It depends, of course, on who are presently in the 67%.

Chris Brewster
Chris Brewster subscribermember

Mr. Dillon: Did you look into the possibility that the Affordable Care Act may significantly increase collections? I would think that if larger numbers of people are insured (especially those who may presently be over-using the service), that 33% may be in the rearview mirror. It depends, of course, on who are presently in the 67%.

edwardg
edwardg

Ambulance rates are figured backwards. The RFP sets the standards, equipment, response times, programs, etc. The bidder looks at the call data, analyzes it and figures out how many ambulances are needed for each hour of each day to meet the response time criteria plus a little pad for spikes and for the inevitable penalties that come when you occasionally miss the mark. Say, you need 200 paramedics and they earn $65,000 a year, add in benefits, overhead and infrastructure and you have the price to provide ambulance service to your community. It's not rocket science. The rocket science comes when you try to figure out how you're going to earn the money. Medicare pays, say, $500 a transport. MediCal pays less than $200. Private insurance and self pay make up the rest of the mix and you have to GUESS how many of each type of patient you will transport over the year and you figure your rates accordingly. Ambulance service is forced to cost-shift just like the rest of health care. What gripes me about San Diego, (and other cities) is that charge a ridiculous "franchise" fee, $10,000,000 a year, for the privilege of providing service. And they charge rent for the use of fire stations to place ambulances. Really! Those stations do not "belong" to the fire department, they belong to the citizens of the city. Why should the city charge for their use when they are used for the public good? All these stupid charges that the city becomes dependent on have to be passed on to the end user. How fair is that? The end user is really the poor working slob who doesn't have health insurance. He gets stuck for full billed charges. Charges with city padding built in. If the fire department bids will their pricing include a $10 million franchise fee? Will they pay the general fund rent for ambulances housed in their stations? Will they hide true PERS wage and benefits of firefighters in the fire budget as to undercut the private provider? Historically, this is what fire departments do. They hide the true cost of service within their massive overall budget. I am not anti-fire department. I am anti-unfair competitive practices. There is nothing wrong with the profit motive. This is America. Profit is the reward for the very real risks of failure assumed when embarking in business. Health care is business. Revenue has to equal expenses or you become the federal government (kidding). Rural/Metro's folks are just as hard working and dedicated as their firefighter comrades. Their leadership is equally dedicated. They are all potential consumers of their own product. They are motivated to succeed. And they are motivated to be efficient. I think the city ought to give the contractor a break and drop/reduce the franchise fee, along with other charges and let them pass the savings on to the end user, who is, in the end, the poor working guy/gal who doesn't have insurance.

Stuman
Stuman

Nice article. Here is a couple for you. One looks at the topic a bit differently in the county just north of San Diego, and the other sets the stage for a different approach to the City's upcoming RFP and asks the question of "why can't we divide the city's paramedic contract up amongst 6 to 8 "qualified" ambulance providers instead of one large provider. God knows that it could be managed a whole lot better and we would very likely reduce the amount of the subsidy, and the response time issues. Check these out.... http://www.voiceofoc.org/county/article_7d69b198-2ae7-11e3-b252-0019bb2963f4.html http://marketing-outside-the-box.blogspot.com/ I think they obviously demonstrate that these contracts are VERY profitable and prestigious, That there is the real potential for corruption and bid rigging, and that there is a better way to deliver high performance EMS in San Diego County... act like its a 600 lb Gorilla that you gotta east (one bite at a time...)

edwardg
edwardg

Hi Chris. You pose an interesting question; will the ACA improve revenue? No one knows. Those who say they know are really guessing. There will be more people insured through the Exchanges (subsidize private insurance) and about 8 million more Californians will qualify for MediCal. With MediCal reimbursements so low most providers, fear this. They can usually cut a better deal for themselves with patient privately than what MediCal pays. Ambulance providers MUST accept MediCal as payment in full. Only ambulance providers and ER's are required to accept MediCal. So 8mil new MediCal recipients may not be a good thing from a revenue perspective. It needs to be noted that ambulance service delivery and its financing, is no different, at all, from the financing of health care in general. It's an absolute mess. For profit, non-profit, fire based; all bill in like manner and all shift unreimbursed costs to the insurer and to the private pay patient. All hospitals do this big time. That's why an aspirin is billed out at $8 a pill.

Chris Brewster
Chris Brewster

Mr. Dillon: Thanks. It's interesting to see how this works. Essentially the sticker price is apparently pegged at a level such that those who can pay (via insurance or whatever) pay at a rate high enough to subsidize the cost in the aggregate of those who can't or won't pay (plus some unknown profit for the ambulance company). In theory, we are all equally vulnerable to a possible need for an ambulance (e.g. traffic accident, crime victim, slip and fall). (One wonders if anyone actually pays the sticker price or if this is always negotiated between the ambulance company and insurers.) In any case, my thinking was that if the percent of insured people rises, collection rates will rise as well and the assumptions upon which the ambulance providers have priced care will change to the benefit of the contractors. They could be looking at a bonanza unless re-pricing is built into the contracts.

Liam Dillon
Liam Dillon

Hi Chris- My knowledge of the Affordable Care Act is limited so I can't speak directly to that. I can expand on the idea of the collection rate, though. Ambulance providers like those with private insurance because they can pay the full sticker price. Federal rules say Rural can only get $444 for a high-priority ambulance trip from a Medicare patient. (The federal govt pays 80 percent of that and Rural can try to collect the other 20 percent from the patient.) That's way lower than the $1,820 sticker price. Rural gets even less from Medi-Cal patients. That's why the mix of patients is so important to ambulance company's revenues. They don't have much of a choice on who they transport, but they do way better with patents that don't have publicly mandated payment rates. Another way to look at this rather than collection rate is the revenue per transport. This would take into account all the differing amounts of money that Rural can get. In this case, the estimate would translate to around $600 per transport. Again, much less than Rural's sticker price. Last thing. I linked to this in the story, but here's a statewide breakdown from the California Ambulance Association on ambulance patients: "Ambulance Reimbursement. The average cost of an ambulance transport in California is $589.  21% of patients are covered by Medi-Cal, which pays an average of $150 – just 1/4 the cost.  35% of patients are covered by Medicare, which pays $426 on average per transport.  18% of patients are not insured, yet they pay an average of $233 dollars per transport.  18% of patients are privately-insured. They and their insurance companies together are billed, on average, $1,274 for an ambulance transport to subsidize Medi-Cal and Medicare losses. This cost-shifting results in higher deductibles and health insurance costs. Some private insurers are refusing to pay the billed amount." http://www.the-caa.org/docs/Calif-EMS-Safety-Net.pdf

Chris Brewster
Chris Brewster subscribermember

Mr. Dillon: Thanks. It's interesting to see how this works. Essentially the sticker price is apparently pegged at a level such that those who can pay (via insurance or whatever) pay at a rate high enough to subsidize the cost in the aggregate of those who can't or won't pay (plus some unknown profit for the ambulance company). In theory, we are all equally vulnerable to a possible need for an ambulance (e.g. traffic accident, crime victim, slip and fall). (One wonders if anyone actually pays the sticker price or if this is always negotiated between the ambulance company and insurers.) In any case, my thinking was that if the percent of insured people rises, collection rates will rise as well and the assumptions upon which the ambulance providers have priced care will change to the benefit of the contractors. They could be looking at a bonanza unless re-pricing is built into the contracts.

Liam Dillon
Liam Dillon memberadministrator

Hi Chris- My knowledge of the Affordable Care Act is limited so I can't speak directly to that. I can expand on the idea of the collection rate, though. Ambulance providers like those with private insurance because they can pay the full sticker price. Federal rules say Rural can only get $444 for a high-priority ambulance trip from a Medicare patient. (The federal govt pays 80 percent of that and Rural can try to collect the other 20 percent from the patient.) That's way lower than the $1,820 sticker price. Rural gets even less from Medi-Cal patients. That's why the mix of patients is so important to ambulance company's revenues. They don't have much of a choice on who they transport, but they do way better with patents that don't have publicly mandated payment rates. Another way to look at this rather than collection rate is the revenue per transport. This would take into account all the differing amounts of money that Rural can get. In this case, the estimate would translate to around $600 per transport. Again, much less than Rural's sticker price. Last thing. I linked to this in the story, but here's a statewide breakdown from the California Ambulance Association on ambulance patients: "Ambulance Reimbursement. The average cost of an ambulance transport in California is $589.  21% of patients are covered by Medi-Cal, which pays an average of $150 – just 1/4 the cost.  35% of patients are covered by Medicare, which pays $426 on average per transport.  18% of patients are not insured, yet they pay an average of $233 dollars per transport.  18% of patients are privately-insured. They and their insurance companies together are billed, on average, $1,274 for an ambulance transport to subsidize Medi-Cal and Medicare losses. This cost-shifting results in higher deductibles and health insurance costs. Some private insurers are refusing to pay the billed amount." http://www.the-caa.org/docs/Calif-EMS-Safety-Net.pdf

Stuman
Stuman

Arron, I understand your concern, and you have some valid points to consider. However, the Fire Departments in Southern California have been a catalyst for growth, and their unions have consistently ignored the warnings of civic leaders to continually move their agenda forward. Fire Agencies will tell you that they call volume they get annually supports additional funding for new firefighters. Now, while new firefighters are paid for out of the separate EMS revenue, they're still paid at the same rate as the firefighters who are hire solely as firefighters and receive either no additional pay, or only a minimal added increase for their medic certifications. So, ostensibly they are using the EMS tax money to fund the hiring of firefighters. Now, if that is what the city wishes to do, that is fine with me. But let me provide you some recent lessons on how this is a disaster in the making, because of the fire union agenda. In 2010, the City of Santa Ana California had to eliminate their 100+ year old fire department because they had a very fat contract, that included the salaries, benefits for them and their families, and a retirement package that was not quite as good as what they have here locally. When 2008 rolled arounds and the recession/depression occurred, the cities didn't realize any increases in revenues from taxes. The unions launched an effort to increase the taxes we pay to subsidize these packages so that they would continue. The tax payers said "no", and the unions got PISSED! ( I could go on here, but its a different topic for another discussion) When it came time for the fire department unions to negotiate a new contract, the city was outright and told the unions that their contract demands were unrealistic in the face of the economy and the unrealized tax revenue. The unions wouldn't give in, even when the proof was right in front of them. To make a LONG story shorter... the unions rode that position right into the ground like a jetliner crash. City Council in Santa Ana defunded and disbanded the fire department in Santa Ana, and subcontracted the service out to the Orange County Fire Authority. Santa Ana pays OCFA a fixed amount annually, no more high blood pressure and ulcer treatments for the council or citizens. All of it their own fault. But, again... don't take my word for it... search the internet. I suggest reading the IAFF Monograph position papers created by the fire union. It's titled "Emergency Medical Services Privatization & Prehospital Emergency Medical Services" - Monograph #1. Additionally, you may wish to read the 1992 paper titled "Fire Protection Privatization: A Cost-Effective Approach to Public Safety" - (J. Guardino, D Haarmeyer, R. Poole, JR), and you will see that each side has an agenda, to further, in this insidious little game of capture the flag, with us the citizens footing the bill. But also research the bankruptcy of the City Of San Bernardino. They're in the same boat as Santa Ana... too much debt created in good times, and to few tax dollars to cover it all. That will be a real eye-opener if you can still find the spreadsheet of payroll for the various firefighters, engineers, captains and chiefs at all levels. I went to the Santa Ana Fire Academy as a kid out of high school, and paid my way through paramedic school right after the academy. NEVER had a bachelor's degree until later in life, and my fire career was cut short due to an injury. So, I'm aware of what the union wants. But for the purpose of the discussion here, please allow me to demonstrate.... A "boot" firefighter/paramedic in the City of San Bernardino ( a city smaller than San Diego) started at $70,645/year and maxed out at $94,807 for their position. By the way, this is NOT a degreed position. In a single year, every firefighter/paramedic that had a base salary between these previously stated amounts, had acquired overtime. The highest salary for a firefighter paramedic with overtime that year was $185,039 and the lowest paid received a salary that year of $90,611. The average salary of a firefighter/paramedic in San Bernardino in 2010 was $134,311, without the benefit of a undergraduate degree, or advanced degree - not required when they're hired... ONLY A Firefighter I & II CERTIFICATE & a PARAMEDIC CERTIFICATE. For a Firefighter, without a paramedic certification in San Bernardino during the same period in 2010, the salary bracket is between $64,581 to $83,243, and the annual salary bracket with overtime for a firefighter was between $91,843 to $154,148, with the average salary at $128,198. There were 41 firefighter/paramedics and 12 firefighters on the San Bernardino Fire Department in 2010. •••The total payroll for the 12 firefighters was $1,666,571••• •••The Total Payroll for the 41 firefighter/paramedics was $5,641,941••• •••THE AVERAGE PRIVATE AMBULANCE PARAMEDIC IN SAN DIEGO COUNTY MAKES $ 9.00/HOUR (24 HR CREW) AND $11.75/HR (12 HR CREW) - GRADE 1 $24.88/HOUR (24 HR CREW) AND $32.50/HR (12 HR CREW) - GRADE 34 The Fire Unions have a coverage clause in their contracts with the cities they serve. Its a "Mandatory Staffing" clause, that basically states that each unit they operate MUST HAVE A STAFFING LEVEL OF (# X) individuals that consists of 1 captain ($158,223/annual avg), 1 Engineer to drive and pump water ($140,153/annual avg) and 2 firefighter/firefighter medic ($131,265/annual avg) . When you do the math, the cost of a firefighter paramedic engine company is costing the taxpayer $1536.73 per day just in labor, not including the fuel and equipment depreciation, etc.... I know that it doesn't cost that for a private ambulance company to operate their ambulance in a 24 hour day. So, yes I agree with PART of your statement, but not all of it. I think multiple providers, yes even the fire department too, need to carve the city into sectors and assign a private agency to a sector through a competitive process, keep the fire medic first responders on the fire truck where they belong, not on the ambulance (added cost, more money for the staffing clause on the pumper if you remove the medic firefighters), and we create more jobs, more dollars circulating through the local economy, and the labor unions under control... and no one has absolute power and control over the system. The tail will no longer wag the dog.... That's all I'm after.

Aaron Klein
Aaron Klein

Fit4duty. Thank you, I will look up those writing and videos. I know that it would not be a cost neutral system if the fire dept. took over EMS but my understanding is that all money would have to stay on the EMS side and would not be able to be used for any fire suppression budget items. But the City is prevented from making a "profit". Unlike for profit companies obviously. Also, what do you think about the fact that these "private" companies get to use the fire side for assessments, patient treatment and free labor? I know they are charged some fees by the city but I wonder if there is an EMS system out there that is solely run by a for profit agency? One where they have to have all the employees necessary for lifting bariatric patients for instance? What would the transport costs be?Or how limited would the service be? Private, for profit EMS providers are heavily subsidized by the taxpayer simply by using public fire agencies as free labor.

Aaron Klein
Aaron Klein

I work downtown, station 1. I will read your response a little better and respond with more detail but one point I would like to make about the fact that the City charges the franchise fee and rent that you say is running up costs for the end user...what do you think profit does? Rural Metro is able to make money because they are operating in one of the few sections of public safety that can actually bill for the service they provide. The fire side does not bill for putting out fires in homes or responding to traffic accidents where we do initial mitigation of leaking fuel. We do not charge for responding to busted sprinkler heads where we do salvage and overhaul and stop more damage from happening. There are tons of issues that the fire side deals with every single day that we do not charge for. We do it for the common good and it is paid for collectively by the citizens of San Diego. And now another point about the EMS side. I am a paramedic and a firefighter. The majority of work I perform are medical assessments and treatment responding on a fire engine. I start I.V's, give meds, do radio reports, etc. I would guess that at least half of all the work performed for our patients is done by a fire medic working off a fire engine. Do we charge Rural-Metro for that? Do we keep track of our hours and then bill Rural-Metro? No. Rural-Metro charges their patients for the work we do. If Rural-Metro was solely responsible for ALL medical treatment they would have to run duel medics and probably run three person ambulances at the least because they would not have firefighters to carry gear and lift gurneys and go to the hospital with critical patients, etc., etc., etc. So you claim that the franchise fee and "rent" drives up costs for the end user. I think that Rural-Metro, a for profit, privately held company, is making tons or money and getting a HUGE subsidy from the tax payers already. If the fire side was only fire, the costs of transports would either have to be way higher, or the care would have to be much less. And this is the way it is nation wide. I am fine with private companies bidding for EMS contracts. But if they had to make their money without using the taxpayer funded public safety system already in place, they could not do it. I hope you can see my point. It is that for profit companies are not operating like most companies. They are living on top of the taxpayer and no one seems to see that. You stated that the fire stations exist for the public good? I agree. But right now these fire stations are operating for the good of Rural-Metro and their stockholders. Oh, and about those five medics R-M gets for free every day? It's actually more. Yesterday it was seven. I forgot we still have single role medics who are City employees. They are probably the most experienced medics in the system so I feel bad that I missed that the first time. My apologies to them.

edwardg
edwardg

HI Aaron. You bring up some great points and I enjoy the discussion. It's nice to have an exchange instead of an argument as stuff on the internet seems to degrade to frequently. I was originally from San Diego a long time ago. I am still a paramedic and I am the executive director for a non-profit ambulance service now. I am not down on SDFD or anyone who works there. I have good friends still there, including Javier. I apologize for guessing at your wages. I, in fact do not know what RM pays. I only know what we pay for 11 shifts a month. If wages are an issue then wage points need to be built into the new RFP. I guess we fundamentally disagree on the for-profit vs. public argument. Having worked for the public sector as well, I don't believe for a minute that the public motive is altruistic and "all about saving lives." There is very little efficient about local government. You mentioned the five fire-medics assigned to the boxes daily. Using that example, 5 free medics running 5 transports a day for 365 days a year. My math is 5 free medics x 5/day x 365 x ($600 average collection per call) equals $5.47million, but your point is well taken. My gripe about the franchise fee and rent is that it drives the cost up for the end user, the patient. Fire stations exist for the common good, not just for fire trucks. The city paid for them and they should be used to provide all essential services, regardless of who is doing them. Again, its not about RM making money, its about lowering rates to the patient, and maybe passing on some of the savings to the field staff. Every dollar spent on overhead is money not available for service and staff. I am not naive enough to believe that RM is altruistic either. They certainly take their "cut", but they are not the bad guy because they make a profit. No one is the bad guy. It's about writing a fair RFP that protects the citizens, the provider and the staff while controlling cost. I'm all about SDFD bidding, along with RM, AMR and Falck. I just wish that every time this happens, the rates wouldn't go up the the guy on the street. Nice talking with you, Aaron. Mind if I ask what station you're at. I spent most of my time in OB/Pt. Loma, but proud to say, I worked every unit in the City, plus most of what was once Hartson suburban (La Mesa, Lemon Grove, National City.)

Aaron Klein
Aaron Klein

Hummm. Interesting opinions. Im guessing you have some ties to Rural-Metro but are not stating that in order to seem unbiased. I've thought that on one of your past posts as well. Maybe I'm wrong. I will be upfront about my back ground. Im a San Diego fire medic and former Rural-Metro employee. And you are correct that many of R-M employees are dedicated and hardworking...but they dont stick around very long because R-M pays diddly for wages. You state an average of $65,000 for a medic? Hardly. Try more like $65K for a full crew. The medic makes about $38 and the emt makes under $30. I know. I was there not that long ago and I left to make a livable wage. R-M knows they can pay that because there are lots of people who need the box time to lead into other careers. And as for the fact that R-M should not have to pay for using City buildings? So a private, for profit company should get free use of taxpayer maintained facilities? R-M needs to house their ambulances somewhere. If, as happens in other areas, they had to rent or buy facilities it would be more expensive and the cost passed along to the user would be a lot more than it is now. Also, as to that $10 million, what about the "free" employees R-M gets each day. Every day 5 firefighter-medics work on ambulances. We call it our Paramedic Rotation. The transports we bill end up in R-M pockets not the City of San Diego. But the cost of these paramedics is on the City. At a very conservitive estimate of 5 transports a day these ambulances would generate nearly $6 million revenue for R-M, all while paying just half a million in employee costs. That $10 million is offset quiet a bit by these ambulances. And finally for me, I just don't agree that you should make a profit at the expense of peoples lives. R-M is a for profit company. They are responsible to their stockholders. They make money by running more calls per ambulance per shift so there is a limit to the number of ambulances they will put on the street. The City is not out to make a profit. Even staffing each ambulance with much more expensive firefighters, the City could put twice the number of ambulances on the street at all times and still operate well under the $50 plus million mark and have lots of money left over for maintenance, training, upgrades to equipment, etc. In the end, the cost per transport could drop and "the poor working guy/gal who doesn't have insurance" could see some real relief.......... Because the City would not be trying to make a PROFIT! I'm sure you are not going to agree with me but at least I'm in the system and helping the citizens of San Diego each day. I did it once for Rural-Metro, now I do it as a firefighter. Do you have experience with EMS? I actually think you do, I am curious to know how.

fit4duty
fit4duty

Hi Aaron, I do have Municipal Fire-EMS experience and to be clear both public and private entities are concerned about the bottom line dollar. You are fooling yourself if you believe the SDFD Chief and the City financial analysts are looking at taking on EMS transports as a revenue neutral proposition. And to be clear the City is getting reimbursed for the use of FD medics on the ambulance - there is nothing in this business that is free. Make no mistake it is a business whether public or private. I suggest looking at the writings/videos (youtube) of LA County FDs Mike Metro