More information please

The Ely-Bloomenson Community Hospital Board deserves credit for commissioning the analysis by SafeTech Solutions exploring alternative methods for administering area ambulance services. While the one-time state funding approved this year by the Legislature has helped backfill recent financial losses in Tower and Ely and a number of other ambulance services in the region, it won’t address the ongoing gap between the payments the ambulance services receive and the expenses of operating those services.
That’s why an informed discussion of alternatives is certainly worthwhile.
SafeTech’s proposal for a regionalized service capable of consistently providing advanced life support is worthwhile as far as it goes.
Consolidation of services has long been touted as a cure-all, but such approaches have yielded mixed results, and it’s not clear how consolidation of an ambulance service provides substantial cost savings. School consolidations typically involve closure of community schools and bussing students long distances to a centralized facility, but that’s not a viable option for an ambulance service in a rural area like ours since response time is so critical when it comes to emergency medical services. That means maintaining ambulance halls and staffing in each community is critical.
The proposal by SafeTech envisions halls in Ely, Tower, and Babbitt, each staffed with an EMT and a paramedic. That’s good, but the plan would seemingly more than double the payroll costs associated with the Tower and Babbitt services. With Tower already operating in the red and Babbitt running just above break-even, it’s unclear how an enormous jump in payroll expenses is financially viable.
SafeTech argues that a three-way consolidation of Ely, Tower, and Babbitt, and a new ambulance entity run from the Ely hospital, could help cover those costs through a higher reimbursement for Medicare-qualified runs. Ambulance services operated by critical access hospitals, like Ely-Bloomenson, can qualify for reimbursement at 101 percent of reasonable costs if there is no other ambulance service within 35 miles. But that qualifier would only apply if all three communities agree to a merger. That’s far from a guarantee at this point.
While the study makes a reasonable starting point for discussions, many unanswered questions remain. Even if a merged system qualified for the higher Medicare reimbursement, how much additional revenue will it generate than at current reimbursement rates? How many ambulances would the service keep stationed at the various halls? How many additional inter-hospital transfers would be needed to fill the funding gap? If, as seems likely, a merged system is unable to operate in the black, who fills the funding gap? Unlike Cook, Ely-Bloomenson doesn’t currently have a hospital district that it can levy against to cover funding shortfalls. Is that something that might be proposed as part of a funding package for a new merged ambulance system?
These are the kinds of questions that are typically addressed with the release of a study because such proposals would normally come with detailed financial projections and assumptions. It was disappointing that neither the study nor the financial projections were made available during a public presentation of the plan last month. Ely-Bloomenson’s requirement that the presentation not be filmed or broadcast over local access television was highly unusual.
We reached out to hospital officials last week hoping to get more information about the proposal but were told: “There isn’t more information to share. Conversations will be to decide if the communities are willing to move forward with a regional approach. Then next steps will be determined.”
That’s disappointing. While there is certainly some willingness in the three communities to sit down and discuss the proposal, there is a recognition that the information presented to date is far too sketchy at this point for any community to make a decision on whether to move forward. If the hospital isn’t willing to provide more information as part of any discussions surrounding the proposal, it seems unlikely to advance. As we reported last week, officials in Babbitt were mostly cool to openly opposed to participating in a regional system given that their ambulance service still operates in the black. Without Babbitt, the entire model proposed by SafeTech is a non-starter since the service would not see enhanced Medicare reimbursement.
As SafeTech noted, there is already an element of mistrust between some of the key parties involved in emergency medical services in the area. The hospital’s unwillingness to release information critical to any reasonable assessment of the proposal isn’t the way to rebuild that trust.