The City of Detroit has been facing some serious financial issues over recent years, and now they are faced with running out of cash before their fiscal year is over. It’s a pretty big deal. I’m not exactly sure how they got into this situation, but if I had to make a guess, I would say they spent more money than they took in (as if there’s any other way?). One of the major side effects from their financial woes is a horribly broken EMS system. Ambulances sitting idle because they can’t afford to fix them, response times to critical calls exceeding an hour in some cases, poor employee morale, and a bad working environment are just a few problems that the public can see.
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With the state jumping in to fix the problem, city officials now have some serious changes to make. Privatizing the EMS system is now on the table as a big possibility. Personally, I think it should have been on the table a long time ago, but that’s neither here nor there at this point. The talking heads at City Hall say it will save money while the union heads say it will cost the city money. So which is it?
There are a lot of details I don’t know about Detroit’s EMS system so I can only speculate based on some assumptions, so if I’m wrong about something, please feel free to correct me.
It’s pretty obvious at this point that Detroit EMS operates at a loss. This isn’t much of a surprise to me given the unemployment rate in Detroit and the fact that 911 simply isn’t a money-making enterprise. It’s very rare to find an EMS system that actually makes money on 911 calls alone. Where the money is usually made is event standbys and inter-facility transfers. Most private ambulance services use both to offset their losses from the 911 calls.
I’m not sure if Detroit EMS runs inter-facility or just 911, but I’m going to assume they only run 911. If I’m correct, then it is going to be virtually impossible for any service – whether it be public or private – to operate without a subsidy. So what can they do? Well 2 viable options exist. They can either pay a private service a fixed subsidy to run the 911 calls, or they can pay them no subsidy and give them exclusive rights to the inter-facility transfers and 911 calls. Personally, I think the second option is better at this point.
They can set performance requirements as a condition of the contract. These might include response times, minimum staffing, complaint resolution, etc. The service that wins the bid is required to operate within their budget and meet the requirements of the contract. I have seen this type of exclusive operating contract work very well in several areas, including a few that I have personally worked in. Where things usually go wrong, is when the city decides to start over-regulating the ambulance service to the point that they can’t afford to operate without a subsidy. At that point your right back to square one.
If the City of Detroit goes through with this decision, then my advice to the city is this:
Pick a good company with a good reputation. There are plenty of them out there. Give that company exclusive rights to all emergency and non-emergency responses within the city limits. Set reasonable requirements and hold them to it. After you do all that, stay the hell out of their way. Don’t start trying to fix something that isn’t broke.
I’m sure plenty people will disagree with me on privatization, but we do know that the public system isn’t working for them. The city has proven itself incapable of keeping a balanced budget, so why not wash their hands of it and allow someone else to manage the EMS operations? I really hope the best for the EMT’s and Paramedics working in Detroit. We’ll see what happens in the next couple months.