News

Officials Take Sides in Calif. Ambulance Battle

10/10/2011

Oct. 10--Nearly everyone in Riverside seems to be choosing sides in an ambulance service turf battle between current provider American Medical Response and outsider Mission Ambulance.

The city firefighters' union opposes Mission's bid to serve Riverside.

Councilman Paul Davis questions whether the city's ambulance policy violates antitrust law by favoring American Medical Response, or AMR, which operates in more than 2,100 communities in 38 states.

In Riverside County, AMR has an exclusive contract to handle nearly all 911 ambulance calls. But for non-emergency or routine calls, everywhere but the city of Riverside is an open market, with 29 companies holding county permits to run calls such as taking patients to dialysis appointments or from a hospital to a convalescent home.

Riverside has for years used franchise agreements to control who runs non-emergency ambulances in town. Any company can apply for a franchise and several have, but to date AMR is the only company to be given one.

At a public hearing Tuesday, the City Council will decide whether to grant Mission's request to operate non-emergency service in Riverside, which would end the de facto exclusive status held by a single company for at least 50 years.

AMR officials and others in the industry say the non-emergency, or "retail," side of the business is where companies make a profit because more of those patients pay, and often at higher rates, than 911 patients. Riverside Firefighters Association President Tim Strack says he's concerned about AMR losing business on the retail side because it could affect the company's commitment to spend $1.4 million a year for equipment and training for city paramedics and hundreds more in-kind dollars for their continuing education.

"We work hand-in-hand with them to provide the highest level of emergency services possible in the city," Strack said.

The company partners with the city for training exercises and special events, and it lets city paramedics take classes it offers for state-required certification. Strack said the classes would otherwise cost several hundred dollars per person, and 76 firefighters need them.

If AMR loses retail business to a competitor, Strack said, "they may not go bankrupt over it but they're going to be a lot less excited about doing extra stuff they're not making any money on."

And if the Fire Department loses the $1.4 million and the classes, there's no extra cash in the city budget to make it up, he said.

AMR officials could not be reached for comment.

City officials have cited a similar concern, that competition on the retail side could hurt AMR's viability as a 911 responder, nearly every time another ambulance company has applied for a retail franchise.

The city's ambulance policy says that after officials determine if there's a need for another service, they can consider the financial impact of competition on the current provider. Past applications have been denied in part because officials concluded approving them "would threaten the economic viability of the existing franchisee."

Councilman Paul Davis has questioned that premise. A small business owner himself, Davis has said the city doesn't protect businesses like his from competitors, and it shouldn't. In an email to constituents he asked whether the ambulance policy could violate antitrust laws, which are intended to stop practices that unfairly limit competition.

There may be legitimate concerns about the city's policy and how it is being applied but the antitrust question is likely not applicable because government agencies are in most cases exempt from those laws, said John Landry, an antitrust attorney in Los Angeles.

Governments have the power to make rules and decisions that limit competition or create monopolies -- for example, with quasi-governmental services such as railroads and trash collection, Landry said.

Though he was not familiar with the specifics of Riverside's ambulance rules, Landry said, "My sense is that there is immunity."

Some observers contend the ambulance issue boils down to money, but even there it's hard to determine the facts. Davis asked Riverside Fire Chief Steve Earley for financial statements to show how AMR might be affected by Mission's entry into the retail market, but Earley responded that it is proprietary information the company has not provided.

Earley does have statistics on AMR's retail service in the city, which show in the first six months of 2011 the company responded to more than 6,300 calls. County data show during the same period, AMR ran about 11,000 emergency calls in Riverside. In 2010, the most recent year for which the county has AMR's financial statements, the company spent $35.8 million on uncompensated care, but it also reported $5.9 million in profit for the year.

With so much blurring of the line between 911 and non-emergency ambulance service, it's tough for officials to know whether they're comparing apples to apples, said Councilman William "Rusty" Bailey. He said he's not sure it's appropriate to compare a company providing all kinds of ambulance calls with one that only offers some services.

"We need to look at that policy and say, 'Is this the best way to make a decision?' " he said.

Earley is recommending that council members deny Mission's application on Tuesday, but that won't be the end of the issue. Los Angeles-based Alpha Ambulance also has applied for a Riverside franchise, and General Manager Wes Kingsbury said he's anxiously watching what happens with Mission.

Alpha opened an office in Riverside after doing market research and hearing from medical facilities that weren't happy with AMR's service, Kingsbury said. He provided a copy of a letter from a Riverside woman who wrote that her daughter had to wait eight hours for an ambulance to get her newborn baby from one facility to another for additional care.

Kingsbury said he thinks the Riverside market is big enough for more than one ambulance service, and he noted that AMR operates around the country.

"One city's not going to make or break a financial impact on a national company," he said.

Ambulance hearing

The Riverside City Council will hold a hearing on Mission Ambulance's application to offer non-emergency medical transportation in the city, which would end a de facto exclusive privilege held for years by American Medical Response.

WHEN: 3 p.m. Tuesday

WHERE: Riverside City Council chambers, 3900 Main St.

INFO: www.riversideca.gov/city_clerk/agenda.asp