MT IRON— Members of the Legislature’s Emergency Medical Services Task Force heard a consistent message during a packed Dec. 13 field hearing here, called to take input from ambulance operators, EMTs, and city officials in northeastern Minnesota. Speaker after speaker told lawmakers that rural ambulance services are facing unprecedented financial and staffing strains from a funding system that no longer covers the cost of providing 24/7 ambulance capacity to rural communities, and that the situation has reached crisis levels.
The Dec. 13 meeting was the first in a series of legislative field hearings being held by the task force throughout the state to hear concerns about the status of EMS, particularly in rural parts of Minnesota. The task force was formed earlier this year to respond to a laundry list of issues raised in a 2022 report from the legislative auditor. The bipartisan task force, which includes some legislators with EMS backgrounds, came to northeastern Minnesota at the urging of two of its members, District 3 Sen. Grant Hauschild and District 7B Rep. Dave Lislegard.
Dozens of ambulance personnel and city officials from across northeastern Minnesota spoke to the assembled task force members, and they were remarkably consistent in their take on the challenges they face. While public services like police and fire have long been supported primarily from local tax dollars, ambulance services have relied for years on the fees they collect for their service, which are paid primarily from health care insurers.
That model worked for decades when small ambulance services could rely mostly on volunteers to staff their ambulances, but speaker after speaker said it’s no longer financially viable today.
“Our labor costs are no longer free like they were 30 years ago,” said Hibbing Fire Chief Erik Jankila. “Fee for service does not come anywhere close to covering the cost of providing ambulance service anymore,” he added. “There’s no choice but for the state to step in and provide solutions.”
Other speakers echoed Jankila’s sentiment and noted how the pay structure for most of their emergency calls falls far short of the cost. Speakers described a Medicare and Medicaid pay scale that provides only about a third of the cost of responding to emergency calls, and said those low reimbursements force the taxpayers in their communities to make up the difference.
“We’re left to subsidize Medicare and Medicaid,” said Tower Mayor Dave Setterberg. Glenn Anderson, a member of the Babbitt City Council, said his city has had to write off over a million dollars in billings to Medicare and Medicaid over the last eight years.
Tower Clerk-Treasurer Michael Schultz estimated his city would spend $40,000 or ten percent of its local levy to backfill cash losses to the ambulance service this year. He noted that the city has tried to be proactive on the issue, developing a business plan and meeting with area townships about a possible taxing district overseen by a joint powers board. “But it only works if we increase revenue,” he said.
Members of the task force noted that they are currently working to address the low Medicare and Medicaid reimbursements, which average about $440 per run. “We recognized right away that we have to work with our federal partners,” said Rep. Jon Huot, co-chair of the task force.
“If you have volume, you do better, but we can’t use the same blueprint in rural areas as we do in the metro.”
Adding to the problem in rural Minnesota is the fact that about 90 percent of 911 calls are coming from patients on Medicare or Medicaid. While private insurance companies typically pay more, they make up only a small fraction of the patient base in many rural areas.
Officials from several small cities noted that they often get little financial help from surrounding townships that are located within their primary service areas but don’t contribute financially to the service, except through fees for ambulance runs, which no longer cover the full cost.
Hibbing Mayor Pete Hyduke noted that his city is forced to fund a service that covers hundreds of square miles outside the city limits, while only city residents pay the taxes to support the service, a situation that is commonplace for cities in rural areas. “We need to be allocating resources for the communities that are serving these outlying areas,” Hyduke said.
Virginia Mayor Larry Cuffe echoed that sentiment, noting that his city’s ambulance service is currently losing $500,000-$750,000 annually out of an ambulance operating budget of $3.8 million. “No other neighboring community pays for that service,” he said. “The only entity that helps in any way is St. Louis County, which pays $24 per run outside the city.”
Despite the high cost, Cuffe said his city remains committed to continuing to provide its advanced life support ambulance service. “But give us the chance to break even,” he said.
Several speakers noted that changes in the staffing requirements for ambulance services have exacerbated their financial woes. State law now requires that all ambulance services maintain at least two responders on call at all times, a mandate that has sent labor costs soaring for many services.
“The requirement of having two people on call 24 hours a day, is something that needs to be looked at,” said Babbitt’s Anderson. “Unless you’re willing to finance it.”
Other impacts
City and ambulance services aren’t the only ones impacted by the crisis. Ely-Bloomenson Hospital CEO Patti Banks told the task force that the lack of resources in EMS is impacting her hospital as well. With the increasing consolidation in the health care sector, smaller hospitals are left to handle mostly primary care, as doctors and patients are increasingly concentrated in larger regional centers, like Duluth. Banks said her hospital now relies heavily on local ambulances to transfer higher-need patients to Duluth but noted that those inter-hospital transfers can be delayed, sometimes for days, due to the lack of ambulance personnel.
She noted that current state rules prioritize response to emergency calls over transfers of stable patients and said already overstretched ambulance crews often leave many transfer calls unanswered since there are no repercussions for doing so.
While ambulance services generally can profit from many of those transfers, they can take needed personnel away from their service area for several hours at a time, posing risks to a service’s ability to respond to emergencies.
Staffing challenges
Ambulance directors who spoke related a chronic problem attracting and keeping ambulance personnel. Karin Schultz, who serves on both the Cook and Tower ambulance services, said the Cook ambulance is down to just one or two people handling virtually all of their calls and that the service must routinely rely on the Tower and Orr ambulances to cover calls when they don’t have the personnel available. “We get dinged by the EMSRB [Emergency Medical Services Regulatory Board] all the time for not having people to respond,” said Schultz. “The EMSRB should definitely take a look at who they’re penalizing.”
“Would more money help?” asked Rep. Huot, in response to Schultz’s comments.
“Honestly no,” said Schultz. “Nobody wants to work, and volunteerism is gone.”
Tower ambulance director Dena Suihkonen said her service is facing a similar challenge and notes that she ends up going on nearly every one of nearly 500 calls the service receives a year.
Dewey Johnson, who oversees emergency dispatch for St. Louis County said the signs of overstretched ambulance services are evident all the time to his dispatchers. “We’re noticing that while we once paged only once [to get a response], we’re now paging twice, paging three times, then having to look for mutual aid. Eventually we’re going to page a service and there will be no one there at all to respond.”