A change in the county's payer mix since 2010
led to mounting losses, says Paramedics Plus.
BOARD OF SUPERVISORS | The exclusive provider of ambulance services in Alameda County says it needs a $5 million infusion of cash to stanch mounting loses since signing the contract five years ago.
Changes in the economics of heath care over the past few years has resulted in far fewer patients using commercially insured providers, which typically pay higher premiums for service, said county staff and a representative for Paramedics Plus, which has provided ambulance services in the county since 2010.
At the time, Paramedics Plus executives estimated nearly a quarter of its users would be paying the higher standard. Therefore, allowing the deal to financially pencil out for the company. Instead, the figure is now about 16 percent, well below the forecast and “causing a significant gap in balanced billing,” said a county staff report.
The proposed injection of $5 million in one-time funds, however, failed Tuesday to gain the required four-fifths majority vote of the Alameda County Board of Supervisors. Tony Schwartz, president of Paramedics Plus, expressed disappointment, but suggested the company and county will continue to seek a solution for propping up the ambulance service.
Despite support from a majority of the board, Supervisor Keith Carson’s strong vote in opposition was amplified by the recusal of Supervisor Nate Miley, whose daughter is employed by Paramedics Plus.
Carson questioned Schwartz at length about the company's business model in other states, in addition, to its profitability. Although Carson lauded the ambulance provider for its past performance, he also questioned yet another unbudgeted expenditure for the county, which only last Friday approved $80 million in cuts to balance its next fiscal year budget.
From debt regarding Alameda Health System and unfunded liabilities to $175 million in obligations to the Coliseum, Carson said the county is making too many disparate financial decisions in a disjointed fashion. “We’re not looking at the cumulative debt,” said Carson. “What is the impact on the future of this county?”
Controversy over Paramedics Plus acquiring the exclusive contract in 2010 instead of the previous provider centered around allegations the Texas-based company purposely underbid the contract as a pretext for entering the California market. AMR, which previously held the county contract, sued Paramedics Plus for violating the state’s predatory pricing laws. But an Alameda County jury later found in favor of Paramedics Plus.
Propping up the ambulance provider may prove cheaper for the county than any other options available, including a takeover of the company’s operations or searching for another provider, county staff said Tuesday, both of which would be cost prohibitive to taxpayers,
Schwartz told the board Tuesday afternoon. “If we’re not the providers, the cost will be more.” He added, the additional $5 million will not make the company whole, but reduce losses estimated to run as high as $10 million over the life of the current contract.
Alameda County Supervisor Wilma blamed inaction by legislators in Sacramento for failing to provide solutions for a number of similar financial failures for ambulance providers across the state. Chan said she supports the expenditure, which she noted, does not come from the general fund, but a $9.3 million EMS trust fund set aside for times like these.
The typically verbose Alameda County Supervisor Scott Haggerty said the alternative to paying $5 million in aid "will cost us three times as much,”. He predicts the southern and eastern portions of the county, which Haggerty, in part, represents, will be hit hardest by any disruption in ambulance services. If not, he later warned, “You might as well throw grandma in the trunk and drive to the hospital.”