REGIONAL— As ambulance services across rural Minnesota struggle financially, there’s one factor that has contributed more than any to the flow of red ink for most services: the skyrocketing cost of payroll.
For years, most small-town services relied on a stable of volunteers who were willing to respond at all hours, often for no pay. In more recent years, most services began paying volunteers for the time they spent on runs, but not for the periods of time they were simply subject to page. That increased the payroll costs for ambulance services, but not to an extent that jeopardized their financial viability.
But as services increasingly struggled to fill their staff rosters, and to meet the requirements of state law to maintain an on-call schedule 24 hours a day, seven days a week, many services have begun to pay ambulance staff to sign up for periods during which they are subject to page. A review of area services by the Timberjay has found a significant variation in how area services pay their on-call staff and those differences can significantly influence the financial status of those services.
Area services also differ in the status of their on-call workers, and most consider the hours they spend on-call to be non-work hours, rather than on-duty hours. The federal Department of Labor and the Internal Revenue Service describe this distinction, which is an important one for rules like overtime, as “waiting to be engaged” or “engaged to wait.” Those “waiting to be engaged” are considered off-duty and are free to do as they please as long as they can respond quickly, usually within ten minutes, in the event of a call. Those waiting to be engaged can work any number of hours and are not subject to rules like minimum wage or overtime.
Unlike most other services in the area, the Ely Area Ambulance Service, which offers a full-time advanced life support service, provides full-time on-duty staffing, paying EMTs $18 an hour while on duty, and paramedics $23 an hour. During those hours, the ambulance crews remain at the hall (engaged to wait) and are expected to be out the door in three minutes or less in the event of a call. That commitment allows the Ely ambulance to provide a quick response and a high level of care, notes Chuck Novak, who chairs the nonprofit board that manages the service. The cost of maintaining that service, however, has become a major issue in the community as the city of Ely and area townships have had to contribute increasingly significant sums to help cover annual deficits that now exceed well over $200,000.
Novak said other volunteer ambulance personnel are needed at times to fill gaps in coverage, or to serve as “second shift” when the on-duty staff are on a 911 call or are needed to transfer a patient from the Ely-Bloomenson Community Hospital to medical facilities in places like Virginia or Duluth. Those volunteer staff are subject to page during those times without pay, although they are compensated when they are required to respond for a run.
Most other area services compensate their volunteer staff for the hours they agree to be subject to page, and that varies considerably.
Eveleth is another area department that relies on on-duty staff, rather than on-call personnel to respond to the 800-850 calls a year that the service receives. “They’re required to be at the hall or very close to it,” said ambulance director Therese Elverum, who is also an EMS instructor. The department’s EMTs are paid $12.50 an hour, although that increases to $14 hour for those staff members who work more than 48 hours a month. Elverum said most of her staff put in the extra hours and that the pay bump is a good incentive to do so.
The Tower Area Ambulance Service made its shift to a paid on-call staffing model in 2018 and the impact on the service’s financial picture has been dramatic, increasing the city’s payroll for its ambulance crews from the $50,000 a year range prior to the change to well over $200,000 today. The city’s on-call pay is higher than most other small services in the area, which includes $11.50 an hour for EMTs and $10.50 an hour for Emergency Medical Responders, or EMRs. Those staff also are paid substantially more when they’re required to respond to a call.
The state’s Emergency Medical Services Regulatory Board had noted Tower’s remarkably high rate of pay during a 2021 review of the service and had recommended that the rate be reduced to a more typical on-call rate of five or six dollars an hour.
City officials have not acted on that recommendation, however, out of concern they could lose staff or impact morale by reducing a rate of pay to which its staff has become accustomed. City officials have tried to find ways to reduce payroll costs, but have faced pushback from ambulance staff and have yet to enact any changes.
Tower Ambulance Director Dena Suihkonen agrees that the pay rate was probably too high when first set several years, but she argues that factors like inflation have brought the pay rate, which has remained unchanged since 2018, to a more reasonable level. She also notes that the Tower service handles considerably more runs than other services in similarly-sized communities. The greater number of runs should benefit the Tower ambulance service financially but even so, the city had to subsidize operations of the service by more than $40,000 last year, an amount equivalent to ten percent of the city’s levy.
“Ideally, it would have started at 5-6 an hour,” said Tower Clerk-Treasurer Michael Schultz. He acknowledged that the high pay established in the beginning, prior to his service with the city, wasn’t sustainable and has made it difficult to control payroll because of the morale implications of pay reductions.
Reducing the on-call rate by $2.50-$3 an hour, however, could save enough to allow the city to cash flow operations.
Other area services pay their staff considerably less than Tower when on-call. The Cook ambulance service pays its EMTs $7 an hour for their first 100 hours per month, although that increases to $8 an hour after 100 hours, and $9 an hour after 200 hours.
EMRs are paid $5, $6, and $7 dollars an hour respectively. Cook ambulance staff is also paid $2 per loaded mile for handling transfers from the Cook hospital. Assuming five hours for a typical transfer to Duluth and back, that amounts to almost $40 an hour.
On-call personnel up the road in Orr are paid $5 an hour, which is the same rate paid to on-call staff in Babbitt. Both of those services have managed to operate without significant financial challenges. “We’re actually a very thriving ambulance service,” said Babbitt Clerk-Treasurer Becky Jaeger. Both of those services also pay their on-call staff considerably more when they’re required to respond to a call.
Paying the highest rate in the area for off-duty on-call ambulance staff is Hoyt Lakes, which pays $15.84 an hour, but doesn’t pay additional when their on-call staff is mobilized for a call. That high rate of pay contributes to operational deficits for the service, but unique circumstances at Hoyt Lakes help the service operate closer to break-even than its high on-call pay rate might suggest.
“We take a lot of transfers because have a hospital in our service area,” said Melanie Olmstead, ambulance supervisor in Hoyt Lakes. “Last year, we took 431 transfers,” she said, virtually all to Duluth.
Inter-hospital transfers tend to be the most profitable type of call for ambulance services, so the huge volume of transfers at Hoyt Lakes helps them generate far more revenue than a similarly-sized service might otherwise. What’s more, said Olmstead, the White Hospital, which is served by Hoyt Lakes, is within the Aurora zip code, which means they generate additional revenue from St. Louis County, which pays a subsidy to ambulance services that serve hospitals located outside their zip code.
Despite the healthy revenue stream, Olmstead said the Hoyt Lakes service is still losing money, about $82,000 last year, although she said they’d be closer to break-even if she hadn’t made some larger equipment purchases. “Without our transfers we would not be doing okay,” she said.