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

Richard –

I had hoped that I would have been asked why the price of gas is so high. That would have been easier to answer then why those in EMS continue to be compensated at what is perceived by most as low compensation.  There is no simple, singular answer because there are many factors that influence the economics of EMS. I don’t mean to emulate Abbott and Costello’s “Who’s on first” routine, but I’m not certain we can get there from here.

A simple answer is, “what will the market pay?” That’s specific to an area, call volume, payer mix, type of contract if a private company is involved or what salaries have been established by the civil service commission if its public.

First, the issue of the personnel pool to choose from.  Programs exist to train people and in order to continue must have a steady supply of applicants to process through to generate the revenue to keep the training programs going. That means there are many out there to choose from.

Second, unlike the Nursing profession, EMT’s and Paramedics are not degreed.  If an EMT were required to complete a two year program and received an Associates Degree, and a Paramedic required a four year education and received a Bachelor’s Degree then we would have better educated personnel who have invested time in to the profession for the accomplishment. That adds value to the personnel and improves quality. The problem is, in doing so we complicate the personnel issue for small communities who depend on volunteers, and most of this country is made up by small communities.  It is difficult now for many small communities to maintain a cadre of dedicated volunteers who will leave their jobs, get up in the middle of the night and spend week ends doing charitable events to raise money just to fund the basic operational costs. They still have to attend ongoing CE to keep certified on their own time and travel money just so they can provide a free service in their local community. Their only compensation is knowing they did a good job, and once in awhile someone may say “Thanks”. Historically a majority of those in EMS are doing something else after 3 years.  There are a few diehards, but promotional opportunities are limited unless the service is part of a governmental body of public service such as police, fire or health department.  Turnover is still a big factor and those training programs continue to turn out a fresh batch of eager applicants on a regular basis. Many of those applicants will accept a position for the opportunity to have the experience, often with another career objective in mind.

Third, the economics of EMS is high investment and the return is not immediate.  Nor is it an environment where you go to the local car lot, buy an ambulance and set up shop and go in to business.  There are a lot of regulatory agencies involved, each with a set of dictates as to how the operation will function within each agency’s mandates. Fees are usually regulated by State or local agencies, and sometimes by contracts with the local governing bodies. Even though it’s a business it’s not like a retail establishment where everyone stops at the cashier and pays before leaving. Nor are there weekly specials to draw additional customers in during stroke week. Putting an ad in the local paper or on the radio for “Fractured hips, half price this week only” would not be appropriate. There is also “cost shifting” involved to compensate for those who are covered by subsidized programs that pay much less then what it costs to provide the service as well as those who do not pay. Historically the industry collects about 60% of its fees charged in a one year time period.  Then there is the issue of call volume and payer mix. Not every community is the same and Federal programs, of which many of the patients are covered by pay a “prevailing rate”. The more calls for service and the larger the service area the more revenue is generated. You can’t make expenses on just a couple of calls each day. The large companies that compete and bid on the large contracts spend a lot of money up front going after those contracts and the return is not immediate. It usually requires 5 years to see a return and hope that there is contract a renewal at the end. At least with Treasury Bills you have a guarantee and a set return.  EMS involves a lot of risk and capital outlay in the commercial endeavors. Cash flow is a big issue with any business, even EMS. No cash flow, no ability to meet expenses unless it’s a philanthropic hobby for someone who just won the Mega Millions Lottery.

If you look at the customer base, many patients are elderly and on fixed incomes.  The young and healthy are not the one’s using services unless they are involved with doing something stupid or are a victim of circumstance.  In 1996 it was reported that 92% of our population retires at or below the poverty level. I don’t think any have a coffee can in the cupboard with money put away marked “OPEN IN CASE OF EMS EMERGENCY”. At least in my 43 years I’ve never come across one.  Usually they are concerned with the cost of the current health crisis and how it will impact them financially.

Fourth, the local politics have a lot of influence as to who provides the service and I’ve never been given the direction from those above me to spend whatever we have to in an RFP process.  The common factor in every political body is to evaluate cost and spending the least amount of taxpayer money for anything. Whether its EMS or paper clips, cost is a bottom line factor and a mandate given to those elected by the taxpayers. Usually committees are formed for the evaluation process and responses to RFP’s are picked apart and rated.  In the end its no different then going to the store and shopping for dinner for a family. You can buy yourself a steak and get some macaroni and cheese for the rest or you can buy some ground round and a lot of Hamburger Helper and feed everyone as best you can.

Fifth and last is history.  EMS is different in every community and for many years a majority of this country, 72% was provided by funeral homes more as a convenience and public relations service because they were available 24/7 and had a vehicle that would accommodate someone in a supine position. Then we put rules on it as to personnel, training, equipment, vehicle design and that’s when the changes started. Volunteers took over in many places, or fire, police or health departments in others.  A few entrepreneurs saw a business opportunity in communities large enough to support it.  As of yet EMS has yet to find its home and will continue to be different from one community to the next.
 
Other then buying quick pick Mega Millions Lottery tickets to stuff in pay envelopes as an added bonus on payday, I’m not sure we can accomplish what we’d like to have. And not everyone can be a winner.

 John E. McMaster, MBA
Curmudgeon's Corner Columnist