Q&A with Boo Heffner

In a few short years, Falck has become the third largest ambulance company in the U.S.

The company purchased Care Ambulance in Southern California in 2010, then Lifestar Response, which operates in seven mid-Atlantic states. The next acquisition was Cape Cod Ambulance and then American Ambulance in Florida. Over the next two years, Falck acquired five companies and is now operating in 14 states. Boo Heffner, President and CEO of Falck USA, recently spoke with Best Practices in Emergency Services about Falck’s plans for the U.S. market.

Why did Falck choose to enter the U.S. EMS market now?

Falck has been in the U.S. market for a while through its investments in Rural/Metro. Three years ago, we made the decision to go out on our own because we saw this potential. It finally materialized what the Affordable Care Act would be, and what it would look like, and it was going to change how prehospital care is delivered and reimbursed in the U.S.

What can Falck bring to the U.S. from its European experience?

If you look at the reimbursement models here vs. Europe, they are completely different. In Europe, Falck has learned to be highly efficient. It’s a fixed-fee reimbursement model—you receive X dollars to run the service for a geographic area.

There are also performance-based contracts. In Europe, utilization is watched closely. You have to have enough units to meet the response time standards, although maybe not everybody goes to the hospital. Instead, paramedics determine if they can go out on a preventive basis to check on frequent users and check their blood pressure, etc., and make sure they are doing what their doctor tells them to do. There is a great deal of emphasis placed on preventive medicine rather than reactive medicine. This is what Falck does in Europe that they can bring to the U.S.

Some EMS operations are embracing community paramedicine and mobile integrated healthcare. What is Falck’s take on this?

There is no doubt the Affordable Care Act is going to change the landscape of reimbursement in the U.S. We are already working on a preventive medicine model in some of our East and West Coast operations. Either via phone or via a physical visit, we’re taking high system utilizers and implementing preventive measures to ensure these people are OK. We are working with insurance companies as well as certain healthcare organizations and other entities that will reimburse for such services. The challenge in the U.S. is to prove to the payers that this is the way to go.

As the system sits today, two of our largest payers, Medicaid and Medicare, do not reimburse providers for such services. That’s a challenge all providers face. We’re putting our emphasis on insurance companies and other payers that have responsibility for these patients and showing them the benefits of preventive healthcare to reduce unnecessary transports to the hospital.

What is Falck’s long-term objective?

I mean this from the deepest of our hearts: Under no circumstances is it our objective to be the largest ambulance company in the U.S. It is our objective to be the best and prove to the EMS community that a large private ambulance provider can be successful in the U.S. for a long period of time.

When we acquire an ambulance company, we retain the owners, the management and the culture. We allow them to prosper and grow with the resources that an international company brings. We also allow the owners of these companies to make an investment in the company they sold for the betterment of the company down the road.

Falck funds 100% of our acquisitions and capital expenditures out of our own operating cash flows. We don’t rely on private investment. The majority of our company is owned by two Nordic-based nonprofit foundations that take their proceeds and distribute them in the form of grants to healthcare and research entities. That’s significant because traditionally in the U.S., roll-ups have been held by private equity or publicly traded firms. We are a 107-year-old company. We’re not flipping the company. We are long-term players.

What’s next for Falck?

We are in play against our regional and national competitors. We consider ourselves to clearly be a very formidable competitor in municipal contracting and large institutional contracting. The only caveat is we will not bid against a municipal fire department that is providing transport services themselves. Communities are stretched right now, and we’re not going to go in and undercut them. However, if the fire department and the fire union said, ‘How could we build a public-private partnership?’ we’d do it.

 Jenifer Goodwin is associate editor of the monthly newsletter Best Practices in Emergency Services.