The Costs of Care

     Let's face it: These days, there's much more talk about the gas pump than the heart. Both send the necessary fuel through the hoses, but one has become increasingly more expensive to operate. Now, don't send me nasty letters. I'm the first to point out that patient care is the No. 1 goal in EMS. But I am also quick to follow up by saying that in order to provide care, at some point, you must be concerned about the costs of care. So, how do you combat these rising costs?

     First, consider inflationary cost increases in any agreements you enter into, such as contracts with hospitals, nursing homes, insurance companies, health management organizations, preferred provider organizations or Medicaid brokers. All of these payers should be open to negotiating clauses that protect you in the event of unforeseen expenses. An inflationary clause might look something like this: "In the event that fuel prices go above (a set dollar amount), payer agrees to increase mileage rates by 15 cents per mile for every 50-cent increase in fuel prices above the set dollar amount. These increased rates will become effective upon notice from provider." You will probably need more detail than this, but you get the idea. Since contracts often are effective for several years, such a clause may prove to be worth its weight in gold (or oil). But, you say, we are already locked in to the contracts we have. Yes, I understand that, and we all know that hindsight is 20/20. But, while you cannot go back and change the terms of existing contracts (unless you can convince the other party to allow you to, which is a possibility), you can be more careful in negotiating new agreements, keeping in mind that your current contracts may have an automatic renewal clause. If they do, make sure you advise the other party before the automatic renewal date that you want to amend the agreement. Be sure to let them know that you don't want to end the contract, you just want to tweak it a bit.

     Second, make sure your concerns are heard. Medicare is probably the number one payer of ambulance claims. Make sure your Congressmen know about your needs and expenses, since they can add money to your pocket through temporary Medicare increases. Meanwhile, many state Medicaid programs are cutting payments, but remind your local lawmakers that cutting Medicaid money cuts matching federal funds, too, and may not be in the best interest of your state. Also, private insurers typically pay rates they deem to be "reasonable and customary." Keep track of the numbers and be prepared to challenge them for increases. It will be up to you to show that their payments do not sufficiently cover your costs.

     Next, cut the cost of the gas that goes into the tank. If you are a large city or county, you may have your own fuel depot. Even so, you should consider these other measures (because the increased costs are being felt somewhere in your government's budget or in your taxpayers' pockets). If you purchase your gas commercially, look into getting fleet rates. Fleet rates are offered by many of the major fuel companies and provide significant discounts. Plus, since discounts increase with the volume purchased, think about creating a "fleet" of ambulances outside of what you operate. Large associations like the American Ambulance Association (AAA) or the North American Ambulance Alliance (N3A) may be able to work an agreement for all of their members to be a part of a single "fleet," thereby maximizing the amount of fuel purchased and getting the highest possible discount for members.

     Finally, limit the fuel that goes out. This can be done by limiting the operating time of vehicles that are not on call. Posting vehicles in areas where the crew can wait on calls inside an office or public building instead of having to sit with the engine running to stay cool or warm will also help limit gas consumption. Scheduling nonemergency transports so vehicles can pick up a patient at the facility they are transporting another patient to will also increase the efficiency of your operation by limiting the unloaded legs of nonemergency trips when possible.

     Some of these suggestions may be easy to implement, while others may require a significant change in how you operate. But if change in your operations is the only way to leave some change in your budget, maybe it's time to start looking at the areas where the most effective changes can be made. The sooner the better (before the change you're looking for is between the couch cushions).

     G. Christopher Kelly is an attorney practicing in Atlanta, GA. Chris focuses on federal laws and regulations as they relate to the healthcare industry and specifically to the ambulance industry. He also lectures and advises ambulance company clients across the U.S. Contact him at chris@emscltd.com.