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Three companies are positioning for a piece of Lee County's emergency medical services, promising millions in savings by either sending in a management team to run the county's operation or taking over ambulance responses.
While Assistant County Manager Holly Schwartz said talks were in their infancy, they prompted administrators to delay hiring a new public safety director and push back another round of discussion on Bonita Fire's 3-year-old effort to take over ambulance services inside city limits.
Both actions were delayed until March, while officials evaluate outsourcing offers.
"Administration hasn't really had the opportunity to find out exactly how they will find these savings, but we will confirm that it's not at the expense of patient care," said Schwartz, who is temporarily serving as public safety director.
Costs for patients
Two companies that pitched proposals to commissioners, Grady EMS and Rural/Metro Corp., charge patients in the Atlanta area more for ambulance rides than Lee County bills here.
Grady charges $1,628 for the most basic ride to a hospital in Fulton County, according to 2012 published reports.
In neighboring DeKalb County, patients pay $750 for a basic trip to the hospital in a Rural/Metro ambulance, according to published reports.
Those price tags range from 50 percent to more than three times the $525 Lee collects from patients for its least expensive ride.
Taxpayers, however, subsidized about $15 million, or 44 percent, of the cost associated with Lee's emergency responses in the fiscal year that ended Sept. 30, 2011, according to county documents and officials. The expense of 71,825 responses that year totaled $33.7 million, while Lee collected $18.7 million from patients.
While Lee billed more than enough for ambulance rides to cover the tab, insurance programs such as Medicare pay less than the county's fees and other patients don't pay at all or can't cover the remainder after private insurance picks up part of it.
As commissioners look for ways to cut an operating deficit of $30 million, that $15 million subsidy for emergency responses is the same number Commissioner Frank Mann said he hopes outsourcing could save the county. "It's very exciting to contemplate that in one department alone we might save half of our annual deficit."
A portion of that $15 million should fall to the wayside in absence of Medstar. County officials said they expected to save $2 million by outsourcing the county's helicopter response to medical emergencies. The $15 million also covers some of the cost for incident management teams that respond to storms, brush fires and disasters.
Spearheading Grady's effort, Dan Robuck said Lee could save $15 million every year by privatizing through his company.
Robuck said it cost Grady $24 million to field 132,000 calls in the Atlanta area and it collected $24 million in fees. The $15 million savings would take several years to realize in Lee, he said.
"If you look at it, Grady's doing considerably more calls, with more employees, without that same subsidy. That's the potential savings," Robuck said. "Can you get it all in one year? Nope. Can you get it there in 3 to 5 years? Yes."
A third company, American Medical Response, expressed interest in Lee after hearing reports officials were examining privatization. County staff has yet to speak with AMR representatives, Schwartz said.
Tom Diaz, AMR's general manager, said his company often takes over the entire service, buying out a government's assets and hiring its employees, as opposed to just running the management side of operations.
Specifics of an outsourcing plan, Diaz said, would be left for county officials to decide if they put out a request for proposals.
When Rural/Metro took over Health Central in Orange County, emergency medical technicians and paramedics were offered the same benefits, said the the company's division general manager, Chris Blach. "We brought all the staff over whole as far as their pay rates, their seniority and their shifts schedules and so forth."
Commissioner Cecil Pendergrass, who is retired from the Fort Myers Police Department and has worked as a union representative, said he won't support taking "ground troops" off the county's payroll.
"There's no savings there," Pendergrass said. "What they would do is come in and hire people for minimum wage and you would get minimum service. Lee County EMS provides better service."
Move to privatize
The offers to outsource EMS came on the heels of the commission's November decision to privatize medical airlifts. By giving up Medstar's flight certificate, effectively ending the 34-year-old county-run airlift program, commissioners helped the county dodge federal fines that could have amounted to more than $1 million, according to a recently released FAA letter and county officials.
In August, Aeromed was tapped to temporarily step in for Medstar. County officials have yet to contract a permanent provider, but it's possible county paramedics will be stationed on-board privately owned and managed helicopters.
After Medstar was shut down, officials gave the go-ahead for a private company to step in for Lee's ambulances and start toting some patients between hospitals, Lee Memorial Hospital spokeswoman Mary Briggs said.
One of the proposed options is partial privatization of ground ambulances, where a corporation could send in a chief executive officer, financial officer, billing representative and others to run the county's operation, Schwartz said.
Outsourcing solely the management portion of Medstar was an option staff presented before commissioners surrendered the county's certificate to fly patients for a fee.
The cost to privatize Medstar's management started at $300,000 a year, not including expenses the contractor would incur, according to the only company that expressed interest in solely privatizing Medstar's management, Keystone Med-Flight.
Rural/Metro does not contract with any government for the management portion of operations. Diaz and Robuck did not recall such an agreement their companies have with another government or how one would work.
The purchasing power Rural/Metro brings, Blach said, would result in savings on supplies.
Grady would use proprietary computer software, Robuck said, to deploy units.
In 2008, Lee spent $500,000 for software that supposedly predicts when and where an emergency would likely occur and aids in positioning units accordingly. The software, Optima, costs $60,000 a year to maintain.
Additionally, the county outsources its billing to a private company, Intermedix, which attempts to collect on ambulance bills.
Last year, Lee wrote off $8.9 million in ambulance bills. Part of that debt was written off because the county is prohibited from collecting from Medicare and Medicaid patients after the government-insurers pick up part of the tab — an amount that is less than the county's bill.
Bonita fire's effort to start up its own ambulance service has been met with resistance from county officials.
Commissioners agreed in May to split $75,000 for a forensic auditor and special magistrate to settle the matter; however, the agencies haven't agreed on an auditor in eight months since, Bonita fire spokeswoman Nicole Hornberger said. The commission was set to discuss the matter again Feb. 5, but county administrators pushed back talks to March 5, while they discuss outsourcing.
Commissioner Larry Kiker said he doesn't see a problem with Bonita fire bringing patients to the hospital. The district is responding to calls and stabilizing patients, while they wait for Lee ambulances to arrive. "There's a 3- to 4-million-dollar savings right there," he said. "We don't have to do anything except get rid of the work."
Search for a new public safety director
Appointing a qualified public safety director was one of the recommendations made in an audit, which pointed out the hands-off management style of the former public safety director, John Wilson, led to infighting among senior staff and turmoil that threatens the county's EMS Department.
Wilson abruptly left his job in Medstar's wake.
Lee County set the maximum salary for a public safety director at $115,300. That is less than fire chiefs in smaller departments collect to manage a smaller budget.
For example, Bonita Springs' recently appointed chief will collect a $124,000 salary in his first year of work, with a guaranteed bump to $40,000 after the second year, according to a contract the fire board approved earlier this month with Joe Daigle.
That department has a $26.4 million budget compared with Lee's $43.4 million public safety budget.
"It's very exciting to contemplate that in one department alone we might save half of our annual deficit."