Ambulance Glut in Northampton?

Dual Emergency Services
Reporting Ample Rewards

                                  By Edward Shanahan
   Bikers, walkers and runners plying the Bike Trail have to be surprised by the recent frenzy of activity at the point where the trail heads west across Bardwell Street in Florence.

 The long-vacant parking lot at the rear of the dormant Multicolor/Magnat Corp. building is choked with cars. Parked along the apron of the bike trail and along the roadway between the trail and the factory building are several white American Medical Response (AMR) ambulances.

 Welcome to the new base of operations for the private ambulance company that previously had run its vehicles and service from a Conz Street location.

 Welcome also to the changing nature of the economics of providing emergency and non-emergency ambulance service.

 During down times—weekends mainly—as many as seven idle ambulances are parked in this Florence location. At other times two or three AMR vehicles, with the their diesel engines running non-stop, are just waiting for the next call, producing a steady flow of traffic onto Bardwell and along the roadway between North Maple Street and Bardwell, parallel to the bike trail.

 Meanwhile, the city’s Fire Department has within the last two years gotten into the ambulance business in a big way, operating three ambulances and generating enough revenue, according to Fire Chief Brian Duggan, to pay for its operating costs and then some.

 At times there can be as many as 10 ambulances available in the city of Northampton—one for every 3,000 residents—and apparently with enough business to go around for the two services - one private, the other public - to operate without dipping into municipal tax revenue.

 In fact, operating an ambulance service looks more and more like a very lucrative enterprise, whereas it used to be a distinct drain on municipal budgets.

 The combined service provided by a private company in tandem with the back-up city operation, “is a home run
for the city, I think,” says Councilor-at-large James Dostal, a member of the Council’s Public Safety Committee. “AMR costs taxpayers zero,” he said, and “the Fire Department service costs zero.”

 Chief Duggan agrees. “We’re in a good place,” he says referring to the current level of service and the limited claim on tax money.

 What is the key to all this good news? In a word-insurance — namely health care insurance that apparently more than covers the fees charged users of the ambulance services.

 What is happening is that, in the case of both the private and public ambulance services, the users of the service and by extension their insurance companies, are paying the full freight for both emergency calls and such non-emergency work as transfer of patients to doctors from nursing homes or from private homes to the hospital and back home again.

 Duggan said the reliance on insurance payments to fund these services has grown over the years, the result of changing “demographics” that entail more ambulance work for an aging population.

 Providing ambulance service has to be lucrative, says Duggan, in order for private, for-profit companies to continue in the business. Fees for a one-way non-emergency transfer of a patient can start at $400, he said. The Town of Amherst collected more than $1 million in revenue for its ambulance service in the last year, which indicates the scale of revenue that an efficient ambulance service can generate, Duggan said.

 Fewer and fewer communities in Massachusetts now offer ambulance coverage as a municipal function like police and fire protection, Duggan said. In the past, he said, a community absorbed the costs of both emergency and non-emergency ambulance coverage as part of the overall municipal budget. Shifting the burden of financing to the users and their insurance companies is merely another way of privatizing government responsibilities, something Duggan calls a “fairer” way to allocate costs.

 According to David Pelletier, AMR’s director of operations for Western Massachusetts, in addition to the many vehicles evident at its new base in Florence, the company has some 35 employees, consisting of both EMTs and paramedics. It responds to an average of about 3,000 calls annually in Northampton, he said. AMR now operates in 36 states and has some 18,000 employees, according to Pelletier.

 In order to meet its contractual obligations, AMR has two vehicles on the road 24 hours a day, traveling more or less prescribed routes in the same way police cruisers traverse the city in a planned or beat fashion, said Pelletier.

 When there is a 911 emergency call, AMR is the first responder, with either one or two ambulances, with backup provided as necessary by the fire department service. The combination of the two services could provide half a dozen ambulances for a major emergency such as an auto accident, fire, or some other large-scale, life-threatening event.

 The other vehicles, or trucks as they as often referred to, based in Florence are available for the less glamorous income-producing duties of transporting people to medical appointments, ferrying patients to and from nursing homes and Cooley Dickinson Hospital. It is these many non-emergency runs that generate the revenue stream, and subsidize the quick response in a medical emergency, according to those interviewed.

 The ambulance picture was not always so bright, according to Duggan.

  When he first arrived in town nine years ago as the new fire chief, the city was paying AMR and its predecessors a contracted fee – as much as $150,000 a year - to provide coverage. But there were a couple of concerns, he said. One had to do with the service’s guaranteed response time; the other whether the company, which was struggling financially, would remain in business. At that point the city had only a 30-day agreement for service. Beyond 30 days, the city would be on its own, he said, if the company pulled out of town.

 According to Councilor Dostal, at one time the city had to depend on back-up service from either Easthampton or Amherst when the contracted private service in Northampton was tied up and unable to respond to a call.

 To address the response time issue – that an ambulance be on the scene of an accident or other 911 emergency call within 10 minutes – the company said that would require a third ambulance to be on duty 24 hours a day. According to Duggan, AMR told the city it could provide two ambulances for round-the-clock coverage at no cost, but a third ambulance would cost the city between $125,000 and $250,000 a year.

 The city, Duggan said, elected to go with two ambulances provided by AMR at no cost, and then - getting into the act itself to provide back-up support. Using $25.000 in city funds as seed money and $300,000 in federal grant money for start-up costs and training, as well as purchase of equipment, the Fire Department quickly found itself in the ambulance business, with two ambulances responding to 125 emergency calls in the first year, the chief said.

 According to Duggan, the portion of his department’s $3 million budget allocated to the ambulance service is projected at some $160,000. With the recent transfer to the department of $90,000 in new ambulance revenue the service will have generated some $135,000 in income for the fiscal year. “We are more than self sufficient,” Duggan said. The insurance revenue pays not only for overtime for Fire Department personnel, and the costs of maintaining the ambulances, but is more than enough to fund half the cost of a firefighter’s salary.

 In the second year, the city service responded to 220 emergency calls out of a total of some 1,100 calls it went out on.

 The current contract with AMR is due to expire next year, according to Councilor Dostal, and he, Pelletier and Duggan all claim to be satisfied with the current arrangement of Northampton having two ambulance services.

 None of the three seem to believe that there is a potential for active competition between the AMR and the city services where AMR begins to feel the city is skimming off too much of the lucrative non-emergency service, while the city begins to believe that the Fire Department has the ability to operate the entire system on its own.

 Pelletier says that he sees no conflict between the city and AMR in their future goals. “We’re all in it for the community.”

 Asked if the city might want to play a larger role as the sole or primary ambulance service, Dostal replied “that could happen down the road.”

 For his part, Chief Duggan would only say: “What would be the cost of providing the whole service? Towns around us do it.” But at this point, he said: “Who knows what the future will hold.”