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Curmudgeon's Corner

What do you mean, there’s no Big Money in EMS ?

by John McMaster, MBA


curmudgeon  n : a crusty irascible cantankerous old person full of stubborn ideas.

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McMaster, age 21, Orange County,
California and today.
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Probably by now you’ve discovered that unless you work a lot of overtime your next check won’t be enough to buy that new Lamborghini. There’s not just one reason, but many factors involved that have historically influenced the industry and why there’s no standard nationwide.

You can, if you have a paid position in most communities, probably earn enough to make ends meet, buy a car and even a home.  Realistically its more related to what you do with what you make and not how much. You just won’t be eating prime rib and lobster every night or buying a chalet in Italy.

First influencing factor is the history of EMS and the ambulance corps concept.

The very first formalized ambulances and staffing in this country were created during the Civil War and part of the U. S. Army when the need to move injured soldiers from the battlefield.  This was General Order 147, dated August 2, 1862 and signed by Major General McClellan. This was followed by General Order 106, dated March 16, 1864 and signed by the Secretary of War by E. D. Townsend, Assistant Adj, General. The Studebaker Company was given the contract to make the first standardized ambulance wagons, which were pulled by horses.

Prior to this point in time if you were ill or injured the local town doctor (if they had one) would visit you and bring all that he had in his little black bag to care for what ailed you. Drugs were usually involved, no prescription required. Hospitals were in large cities and ambulances were still military vehicles reserved for times of war.

In the late 1860’s hospitals in large cities started adding ambulances to their facilities, Boston and New York, and in Cincinnati, Ohio, the fire department started the first ambulance service. As recent as twenty years ago in one small Northern California community the ambulance was provided by the County Hospital and staffed by an Emergency Room Nurse who was driven to the location by the janitor on floor duty between mopping assignments.

There was a period of time, up until the late 1960’s that funeral homes provided ambulance service because they had a vehicle that would transport someone laying down. More of a matter of convenience then a plan on anyone’s part and it was good PR for the funeral home. 

When the Federal Highway Administration (now the Department of Transportation) published “Death And Dying; The Neglected Disease” in 1967 they estimated that 72% of the ambulance providers in the country were funeral homes. It wasn’t until the creation of EMS, EMT’s and Paramedics that pre-hospital care started seeing any standardization. In the remaining 28% of the country services were either provided by hospitals, fire departments, private companies, volunteer rescue squads, or not at all. Even today, when you get outside large cities there still exists a large volunteer base that provides EMS. They run bake sales, sell subscriptions and do all that they can to generate revenue so they can buy equipment because its still costs money to provide service.

Both the fires service and law enforcement have more of a operational history and formalized background then EMS.  If we were to pick up the daily newspaper or watch the evening news and the main stories were “Rash of heart attacks plague downtown”, or “Vehicle accidents out of control”, there might be more public awareness and concern for EMS. The unfortunate state is the public is rather apathetic because their need arises about once every twenty years and between, whether you eat steak or beans and hardtack is not a major concern.  But, when the occasion arises and they have that need, have bright flashing lights, make lots of noise as you respond from just around the corner, because the perception exists that there is a Paramedic at almost every street corner because they saw it on TV.  And, be prepared for “What took you so long to get here?”

Second factor is economics. It costs money to provide service, even when its done with volunteers.  Vehicles cost money, insurance cost money, fuel cost money and supplies cost money. Maintenance cost money and so do the replacements.

Look in the want ads and see how many KKK-1882-A used ambulances in excellent shape with a 10 year, 100,000 mile warranty and free maintenance are listed.

What you charge is not what you will get. Historically it has been an industry that has collected at best 60% of what it charges, and those aren’t 30 day accounts.

Medicare, which is currently overhauling its reimbursement to EMS providers to lower levels and adding more hoops to jump thru in the process pays a “prevailing rate”. That’s the usual and customary fees for an area that have been in place for at least 18 months, provided the patient is covered by Part B, has met their deductible, and at 80%. And it must be “Medically necessary” according to a guide and have the proper diagnostic and charge codes.

Medicaid pays even less. In most places you couldn’t get a taxi ride for what Medicaid pays, yet it is a large portion of business for providers.

Its actually a statement by the Federal government that places little value on EMS providers.  Its like saying “The services really aren’t worth very much.”

Insurance companies follow suit and have token ambulance service coverage. There are still policies out there that provide a $25 payment for ambulance service.  People will actually say “That’s all Medicare (or the insurance company) believes the service is worth.

For those without any coverage are left to pay from their pockets and sitting at the dining room table I don’t believe anyone has turned to their spouse and said, “Honey, I think I’ll get hit by a drunk driver next month.  Be sure to add that to our budget and I hope that doesn’t take away Susie’s dance lessons.”

Not once in the last 23 years on the Fulton Mall have I been approached by a homeless person asking for a handout who said, “I need to pay my ambulance bill, can you spare some change?”

The third factor is politics. Politicians are elected to office to reduce costs to the community as much as possible and still provide essential services. That’s why we vote for them. Bids are never let and awarded on the basis of who has the highest bid for anything. The bottom line cost is usually the deciding factor. 

In the mid 1990’s the American Ambulance Association put together a system to evaluate a bid process in an effort to make the process fair and efficient for communities and providers. It evaluates the market, inflation, call and transport volume, demographics, rates and revenue streams and the direct and indirect costs to the community.

Those same politicians may also be influenced by fire chiefs who view ambulance service as a cash cow because they are struggling with their own  budgets since 70% of most fire calls are for EMS related incidents. There are no more conflagrations where entire city blocks burn to the ground on a weekly basis.  There are better building codes, building materials, better fire codes, fire prevention, training and sprinkler systems and departments are being looked at with the budget axe because it's difficult for politicians to understand potential, unseen threats to a community unless it's terrorist related.  Then they become paranoid and throw large sums of money at such unique concepts as “Color Coded Threat levels”.   

Gone the way of the family farms are the small ambulance providers, where large corporations have taken hold and can exist and function on smaller profit margins. It's economics.
 
The fourth factor is identity. Where does EMS belong?  What works in one community will not work in another.

There’s medical direction involved so there has to be a physician involved somewhere.  Doc left the Long Branch Saloon a long time ago.

In some communities it’s a public third service.  In some it's part of the fire or police department.  In some a hospital provides it. There are also those places that have a private company, maybe even a funeral home that still provides the service.  And let’s not forget the volunteer services who are made up of people in a community who leave their jobs and homes and without compensation so the local community has EMS available.

In most places the local politicians really do know what best works for their community and support it. But no one is throwing money at it.

You can make a reasonable living, but you won’t get filthy rich in EMS. The same applies to teachers, fire, police and the military, all of which are considered underpaid by most people you ask.  We as a society just don’t make an effort to put a higher value on those professions if our taxes get raised in the process.

If you find a matchbook cover and the front is printed with an ad “Earn Big Money $$$ in EMS”, put it down and pick up the one from the art school and draw the parrot for a chance at the art school scholarship.
 


Jan 2, 2006, 11:14
John McMaster 

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