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Serving Northern St. Louis County, Minnesota

More patient transfers spark competition

Could affect Tower Area Ambulance’s financial health

Marshall Helmberger
Posted 11/20/18

REGIONAL— An increase in the number of non-emergency patient transfers from Virginia’s Essentia medical center to Essentia facilities in Duluth has sparked a competition, of sorts, between area …

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More patient transfers spark competition

Could affect Tower Area Ambulance’s financial health

Posted

REGIONAL— An increase in the number of non-emergency patient transfers from Virginia’s Essentia medical center to Essentia facilities in Duluth has sparked a competition, of sorts, between area ambulance services.

But it’s a competition that the Virginia Fire Department and EMS is almost certain to win— and doing so will likely affect the financial viability of the Tower Area Ambulance Service’s recent switch to paid on-call (POC) staffing.

Tower’s ambulance service made the switch to POC staffing in April, maintaining a two-person crew on call 24 hours a day, five days a week.

The staffing cost, alone, is significant, but Ambulance Director Steve Altenburg has maintained for more than a year that the cost would be covered by higher revenues from an increase in the number of transfers that the service could provide to area hospitals. So-called inter-hospital transfers are, in fact, lucrative for area ambulance services, typically paying more than twice the average rate of an emergency call.

According to data generated by Virginia Fire Chief Allen Lewis, who also oversees the city’s ambulance service, the typical emergency run generates an average of about $588 in revenue. By contrast, a non-emergency patient transfer generates an average of $1,307.

According to Altenburg, handling just three of those transfers a week would be enough to cover the staffing costs for the paid on-call employees, while also providing a more prompter response in some cases for emergency calls.

So far, the service has completed somewhat fewer than three transfers a week, averaging about two-and-two-thirds per week through the first seven months of the POC staffing.

According to Virginia’s Lewis, he’s been advising ambulance directors in neighboring communities for some time that they shouldn’t expect the growth in transfers to continue. In fact, he said, they can anticipate a steady decline in the number of transfer requests they receive.

The reason for that is straightforward, notes Lewis, who focuses heavily on data for decision-making. While the number of inter-hospital transfers has been on the rise the past few years, virtually all of that increase is attributable to just one medical facility— Essentia in Virginia. Indeed, the Virginia facility made 1,378 requests for patient transfers in 2017, more than all of the other hospitals in the county combined, according to Lewis. And the demand for transfers from Virginia is continuing to rise. Lewis notes that the Virginia EMS received 153 transfer requests in July of this year alone, with 124 of them coming from Virginia’s Essentia facility. That’s the highest number of requests from Essentia-Virginia since Lewis began record-keeping in 2015.

For the past few years, as the number of transfer requests from Essentia-Virginia rose steadily, Virginia’s ambulance service couldn’t keep pace. As Virginia turned down transfer requests, due to lack of staffing or available ambulances, Essentia turned to other outlying services, including Tower’s and Ely’s, to pick up the slack. In 2017, Virginia’s ambulance service turned down 234 transfer requests from Essentia alone. Throw in declined transfers from other area hospitals, and that number jumped to 384, which provided plenty of opportunity for other departments to pick up transfers and the extra revenue they generate. As Lewis sees it, it also meant that Virginia was leaving a lot of revenue on the table— at just over $532,000 a year.

But Lewis warns that the gravy train could soon be running on empty, at least for outlying ambulance services. That’s because Virginia is on a hiring spree in order to build capacity to meet the needs of Essentia. Lewis, who came on as fire chief in 2015, said the department had just 19 employees back when he came on board. Today, the service employs 34 people, and is in the process of hiring four more EMTs or paramedics who will be handling transfers almost exclusively.

That’s confirmed by Virginia Mayor Larry Cuffe, who said he expects the Virginia ambulance could receive as many as 1,800 transfer requests in 2018 given the current pace (the most recent data shows the service on pace to hit about 1,600 requests this year). Lewis said by next year, his goal is to accept virtually every one of those requests, particularly requests coming from Essentia in Virginia. “Last year we turned down nearly 400 requests. I want that to be in the single digits going forward,” he said.

Virginia is in a position to claim most of those Essentia-Virginia transfers because of rules that establish what is essentially first-right-of-refusal for ambulance services that serve a particular hospital. “That’s our understanding,” said Cuffe. “They have to call us first.”

Lewis confirms that, and notes that it creates a certain disadvantage for those outlying ambulance services, such as Tower, that don’t have a hospital in their primary coverage area. Ambulance services in Cook and Ely, which do serve local hospitals, have a certain level of guaranteed transfer activity, should they choose to accept it. Ely Bloomenson generated 143 transfer requests in 2017, according to Lewis, which was a decline from 170 in 2016. The Cook Hospital generated 225 transfer requests last year, up just slightly from the 223 requests the year before. The Fairview Hospital in Hibbing has requested fewer transfers in recent years. In 2017, Fairview requested just 525 transfers, down from a peak of 739 requests back in 2013.

Indeed, with the exception of Essentia-Virginia, transfer requests from hospitals in northern and central St. Louis County have been generally declining in recent years. In 2017, all of the other hospitals generated 1,266 transfer requests, which was down slightly from the 1,282 requests those same facilities requested in 2016. And the 2016 total was well below the 1,420 transfer requests those same hospitals generated in 2013.

With the exception of the Virginia ambulance service, which is in a guaranteed position to capture the revenue from transfers from its local Essentia facility, the potential for increasing staffing based on transfer revenue would seem tenuous. “For outlying services, that model just isn’t going to work anymore,” said Lewis.

Other factors may be undermining that model as well. Geoff Galaski, executive director of the Ely Area Ambulance Service noted that transfer requests dropped noticeably last month, which is a trend that affected the Tower service as well. Altenburg reported just nine transfers in the month of October, well below the level the service will need to fund its paid on-call staffing. Six of those nine were transfers from Essentia-Virginia, and are expected to trend downward in the near future as Virginia increases its capacity to meet the demand.

Galaski said the October slowdown is likely due, at least in part, to a new company, Meds-1, which has taken over the Buhl ambulance service and is taking more transfers than the old service. Given their proximity to Virginia, that service has begun taking up some of the transfer activity that other, more distant, services had previously handled.