Facing possible new cutbacks, The Medical Center of Central Georgia considered selling its ambulance service this month but decided not to.
Ben Hinson, owner of Mid Georgia Ambulance, said that about a month ago he made a formal offer of $2 million for the ambulance service’s assets, with a guarantee that the employees would be retained with equivalent pay and benefits.
He said Medical Center CEO Don Faulk declined the offer in a letter the first week of August.
Faulk sent an e-mail to employees explaining the decision to keep the ambulance operation a hospital department. “From the cost, quality and business development perspectives, it is very important that we retain our EMS service,” he wrote.
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Through employees, Faulk declined to comment last week about Hinson’s specific offer.
The Medical Center holds the 911 license to serve about 60 percent of Bibb County. Mid Georgia Ambulance covers the rest, from Mercer University Drive to the northern county line west of Interstate 75. Ambulance coverage areas are set by a regional emergency management service council.
Hinson said he has talked informally with Medical Center officials for 20 years about buying the hospital’s ambulance service, but this was his first formal proposal.
And he’s not giving up.
“We think there are efficiencies that will benefit the community for us to run it all,” he said. “We want to partner with them. We don’t want to buy them out and be the enemy.”
The Medical Center ambulance service covers not only Bibb but Jones and Baldwin counties. Mid Georgia Ambulance is the primary ambulance provider in all or part of seven counties, including those in the Columbus and Adel areas.
MANY DELIVERY OPTIONS
The decision about how to approach ambulance service is part of the larger struggle of a health-care industry squeezed by the recession.
“We used to think ambulance services were fairly recession-proof,” said Gary Wingrove, president of the National EMS Management Association. “We’re now hearing that services are seeing their run numbers drop for the first time in history.”
Last fall, the Medical Center identified ways to cut $43 million in expenses annually, partly by laying off more than 200 employees.
The process had little direct impact on the ambulance service, which lost no staff and didn’t put off any purchases, said Lee Oliver, the hospital’s assistant vice president for emergency services. Oliver was a vice president at Mid Georgia Ambulance before moving to the hospital.
More cuts are on the way for the hospital since the Bibb County Commission reduced funding for treating the poor from $2.9 million to $1 million.
In Georgia, there is no preferred method of ambulance service delivery. It is handled by hospitals, private companies, county governments and fire departments.
Major hospitals in Augusta and Savannah still run their own ambulance services, which compete with private companies and in some cases fire department ambulance services, while in Columbus fire departments and private companies handle it all. Houston County is served by Houston Healthcare’s hospital-based ambulance service.
Earlier this year, the two major hospitals in Athens teamed for the first time to hire a private company to run ambulances in Clarke County. Mid Georgia Ambulance was one of the two top contenders for that contract, but lost the job to Conyers-based National EMS.
Dee Burkett, vice president for professional services at Athens Regional, said his hospital and St. Mary’s Health Care System decided to split the cost of outsourcing because the longtime competitors were each losing about $1 million a year.
“If you have a part of your operation that is not your core business, and someone else who specializes in that alone can do it and collect more money for less payroll cost — we can save that money and apply it to what is our core operation,” Burkett said.
Most Athens Regional ambulance employees were hired by National EMS, but those with longer tenure took pay and benefit cuts, he said.
Houston Healthcare has never considered outsourcing its ambulance service, said David Borghelli, director of emergency services. He said the nonprofit hospital sees ambulance response as a community service, as well as a key link in the chain of emergency care.
Borghelli said he did not know whether Houston’s ambulance service pays for itself.
PROFITS AND LOSSES
Weighing the pros and cons of keeping ambulance service within a hospital, “There are huge advantages on both sides of the street,” said Courtney Terwilliger, who runs a hospital-based ambulance service in Swainsboro. “I have tax breaks because I’m government-funded, but private companies tend to be more efficient in how they move.”
In his e-mail to employees, Faulk basically said the hospital should keep its ambulance service because it makes a reasonable profit, provides better quality care and helps the hospital get patients. Hinson disputes those claims.
Operating the Medical Center ambulance service is expected to cost about $5 million this year, said Cindy Busbee, assistant vice president for corporate communications, in an e-mail. It is expected to earn about $300,000 in profit, based on an average of revenue and expenses for the first four months of fiscal 2009, she said.
Hinson, who developed an ambulance-specific accounting system that grew into its own business, said he believes the Medical Center is actually losing about $2.4 million on its ambulance service.
He calculated that estimate using his own model, without access to the Medical Center’s actual financial information.
Hinson suggested that because the Medical Center takes money from Bibb County, the hospital should be asked to provide financial information to an objective accountant who could analyze whether ambulance service is actually profitable for the hospital.
“As long as they’re getting any money from the county, ... they shouldn’t be able to say, ‘We’re good, don’t worry about it,’’ ’ he contended.
Hinson said he thinks he could make the ambulance service more profitable because “one department of a hospital can’t be as flexible as we can.” He would not say how much profit he thinks Mid Georgia could make.
He estimates that Mid Georgia could transport more patients per hour. And a private company is more diligent about bill collection for ambulance service than a hospital, which has bigger bills to focus on, he said.
Burkett said Athens Regional determined that private companies successfully collect more than a hospital department.
In an interview several weeks ago, Faulk said owning the ambulance service ensures that the hospital gets more paying patients.
Legally, any ambulance must take a patient to his or her preferred hospital. But if the patient has no preference or is not well enough to express one, emergency responders decide.
Because the Medical Center treats the majority of the uninsured in Bibb County, it needs insured patients to subsidize the cost of doing business. Controlling the ambulance service ensures that the hospital gets both paying and nonpaying customers, Faulk said.
Terwilliger, who is chairman of the state Emergency Medical Service Advisory Council, said most hospital-based ambulance services predate the current zoning system, created 25 to 30 years ago.
Until then, hospital ambulance services sometimes dangerously raced each other to accident scenes to try to score patients.
Faulk said that in Macon, paying patients come disproportionately from north Bibb County. In his e-mail to employees, Faulk wrote, “It is to our strategic advantage to have ‘presence’ and our name out in the community, specifically on the northside of town.”
But Mid Georgia Ambulance already serves most of north Macon. And in the 12 months ending July 31, Mid Georgia took 62 percent of its Bibb County patients to the Medical Center, Hinson said.
He said Mid Georgia Ambulance has a rule that all patients ages 15 or younger must be taken automatically to the Medical Center, which is best equipped to treat children.
During Athens negotiations, how patients would be routed was not discussed because the hospitals didn’t want to violate antitrust laws, Burkett said.
But since National EMS took over in March, Athens Regional has not seen a significant change in the number of patients delivered by ambulance, or in the ratio of insured to uninsured patients, he said.
Information from The Telegraph archives contributed to this article.
To contact writer Heather Duncan, call 744-4225.