December 22, 2014

Privatizing Detroit EMS

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.

About Sean Eddy

I'm a paramedic in North Texas. I have been working in EMS for over 10 years now. I enjoy the outdoors, music, shooting, computers and fitness. I currently run DroidMedic.com, and MedicMadness.com . You can e-mail me at sean@medicmadness.com.

  • http://profile.yahoo.com/G5U5X64MR4XKCBQXUTULFELO5I AM

    The first and most obvious reason is that Privatization has been proven in almost all cases to not save money and more often then not to be more expensive.  So as a cost saving measure it makes absolutely no sense, ironically however I am not sure that I disagree with you that privatization is an answer here.  The OTHER issues in place here require fast resolution and providing a fleet of functional ambulances, trained staff, and increasing the response times may best be realized by an already staffed system.

    That however in my mind would still only be a short term contract however EMS is too critical to remain Privatized I’ve have very little positive experience with 911 privates, volunteer and civil service are almost always light years better.  For general use and transport Privates have a place, not 911 imho.

    • http://mitb.net Nathan Kline

      Could you elaborated on how privatization is proven to cost the city more money? Your opinion seems to be based on your personal experience alone. While that may provide some insight into the pro’s and con’s of a private EMS system, you didn’t even provide any anecdotal evidence. Please back up your honest opinion with supporting evidence, so we can make an honest assessment of your argument.

      • Ddp015

        DEMS budget for a year is 23 million. Thats if they see all of that. The city pays a private company 1.8 million for 2 trucks for the casinos which are provided by a private company. DEMS made the city 17.3 million dollars last year pulling over 140,000 runs. It costs the city less then 6 million a year to run DEMS. if you bring a private company in it will cost them a lot more in the long run.

        • Twilliams

          Are we really suprised by this???? How can an ambulance service generate money when over half the people don’t have insurance, and these bills never get paid! Oh what about the people that call an ambulance to utilize them as a CAB. Insurance companies usaually won’t pay for just a ride. Really people!! EMS in Detroit is screwed up system. When someone really needs an ambulance, it is delayed because of  the other people are using it as a CAB, & that is why Detroit has delayed responses. If people paid their bills in Detroit, well then they would visit their family doctor which is cheaper then an ER visit. Detroit is Broke!!!

    • Mark Baird, MSM

       Interesting position on public agencies always being light years ahead of private ambulance providers.  So you would say that DCFD ,DFD, FDNY, or SFFD provide better EMS response than a private provider, such as SUNSTAR EMS in Pinellas Florida or EMSA in Oklahoma City, OK?  I believe that SUNSTAR and EMSA have a much higher cardiac arrest survival rate than any of the fire departments listed.  If you could provide some examples as to how civil service agencies are almost always “light years ahead” of private providers.  However, I will stipulate that civil service providers almost always cost more than private providers do.  I have been in the EMS industry for 24 years and have seen good fired department and private EMS providers and terrible ones.

      • http://sixlettervariable.blogspot.com/ Christopher

        Seattle’s Medic-1 and Wake County NC are both examples of public EMS done “right”. Public, private…neither is the “answer” for Detroit to be honest. They have little to no tax base, little to no insurance base…if you ain’t got no money, whatever system you choose is going to need subsidy!

  • Medic Wicket

    One suggestion you made was for them to pick a reputable company. As much as I agree with that sentiment, it will come down to lowest bidder. I would suggest they go with a PUM, which have shown to be very successful, but even then the city would still have control, which hadn’t worked.

  • FREPLUG

    PRIVITIZING IS NOT THE ANSWER.  SIMPLY GIVE THE EMPLOYEES THE TOOLS TO WORK WITH.  NO PRIVATE SERVICE IS BIG ENOUGH, REPUTABLE ENOUGH, OR EXPERIENCED ENOUGH TO RUN THE CITY OF DETROIT.  I HAVE BEEN BOTH ON DEMS AND IN THE PRIVATE SECTOR, NOW WORKING FOR A FIRE DEPARTMENT.  PRIVATE WILL NOT WORK IN DETROIT!

    • Resquejunkie

      Huron Valley Ambulance is fully capable. By far the best private company I worked for prior to being a career FF/Medic.

    • Howdy234

      AMR, Paramedics Plus, Rural Metro, Acadian are all big enough

    • chilly352

      People that don’t like private services are just mad that they are expected to make runs and not sit in a recliner.

  • Derek Sadaj

    Having worked for private e.m.s. companies for the last 18 years in Detroit and the suburbs let me help you out with a couple things. The first being emergency runs and inter-facility transfer exclusivity, wouldn’t work because of the 10 or so hospitals within the medical control zone. They’re owned by 4 or so different hospital systems who all compete with each other and have various private services who handle the transfers. One of the other things that they used to do was subsidize 3 units during their peak hours. That ended after casinos were built in Detroit and then those units were used there, i believe that’s a contractual issue with the casinos. One of the other things that they did a couple years ago was make D.E.M.S. a division of D.F.D. separate in that you work one or the other depending on who you apply/get hired for. Also D.F.D. doesn’t respond to E.M.S. calls unless it’s for extrication, a wash down or lifting assistance with a bariatric patient. One of the other problems constantly plaguing the system is that a good portion of the citizens will call stating an emergency (chest pain, DIB) and it turns out they have something totally different going on like a doctor appointment, cut finger (a week ago and now it’s infected) and the like so that when someone actually needing medical assistance calls, there are no units available. I have lots of friends who work for the City of Detroit and they are disgruntled yes, frustrated yes but also some of the hardest working and experienced that you will find anywhere. I don’t know what the solution to the problem is but I do know that it’s broken and has been for some time, probably some of the corruption and mismanagement within the executive level has caught up with public safety. 

    • Jreekie66

      It’s a common occurance everywhere that people call and ambulance for non emergencies.  There should be a right of refusal in which a bandage is applied, the patient is billed and referred to a doctors office.  In my area most of the people who make these calls are on public assistance or illegal aliens and have no private doctor.  If they began being forced to pay and perhaps transport is refused once in a while, the problem may resolve.  the only problem I see with this is the rare person who actually has a true emergency but does not express it well or has a history of bs calls.

    • Tumaira Pettress

      Not to mention they can’t repair EMS private or not without repairing police response times. With a great majority of calls being violence related how can EMS respond if police never arrive to clear the scene. I can’t speak for anyone but I like going home at night. EMT’s are not armed and not the police.

  • Mark Baird, MSM

    What about if Detroit began a Public Utility Model EMS System, where the utility would be controlled by a governmental board, much like Pinellas County Florida, and a private contractor would be brought in to provide the personnel and equipment?  This way, the PUM would be responsible for running all ambulance service calls, emergency and non-emergency, within their jurisdiction.  This is the case in KC,MO, where MAST was merged into the fire department, but still is the only provider allowed to provide ambulance services within the city limits.  I believe this type of system would allow the provider to greatly offset the losses that will inevitably take place in providing the 911 response in Detroit with the positive revenue from non-emergency calls. I have no idea what Michigan Law says about this type of exclusive operating area for emergency and non-emergency calls, but I know it is legal in many states, including California, Missouri, and Florida.

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  • Tony C. long time medic

    Since many others have provided many points why privatization wont work in Detroit. I will add the biggest 1. I am confident based on their payor mix a private company won’t make money. Ever with non-emergency transfers you need to have a good payor mix. On the employee side, you know the people who actually provide the care? The usually are not paid well and poor benefits usually a large turnover in the privates. EMS personnel should not be disposable tools. Why haven’t we seen any type of study on how to improve services, as well as find innovative ways to keep the non emergent out of the back of ambulances?

  • attendant

    I like the idea of a Mutual aid system involving the city, Volunteers, and private EMS.  In the 90’s NYC was beginning to utilize this system.  when fdny took over they shut down the MARS desk, effectivly shutting down most of the volunteers who survived on donations and third party billing.  When they became overwhelmed and could not cover their calls, they realized their mistake.  Now they have gone in the other direction and in some area’s you are more likely see a Hospital private ambulance (often staffed by transcare) or a private for profit company than you are to see fdny ambulances.   The northern suburbs funtion with a mix of volunteer and private agencies.  It is not perfect but it seems to work.   The biggest issue I have seen is that the for profits are not big on training.

  • Griffdogg23

    City run EMS, Fire dept EMS or private EMS won’t work EVER anywhere in any city period!! This is what happens when you have a free health care system meaning 911. Don’t feel good or dropped a can of tuna on your foot? Don’t worry call 911 and you can get a free ride to the hospital. Yes a free ride! Homeless guy wants to get out of the cold walks to a pay phine calls 911″ i can’t breath” gets a free ride to a warm bed and free meal. 911 has gotten way out of control. Maybe it’s time to get rid of it or make people prove they have insurance ( even insurances are sayign no we aint paying) or make people pay up front be for they get thier free ride. Can it even be fixed? I’ve worked for private services that have gone under due to money, I’ve worked for a major city fire dept EMS that tried nothing but take take take from employees to save money. I guess there will never be a right.

  • Dan Greenhaus

    Privatization will NOT work in Detroit. All it will do is push the problem onto a private company, who will do the job for as long as the initial contract stipulates, realize they are losing too much money, and bail.  

    I would wager a large portion Detroit’s population is uninsured.  So a private company will not be able to get money for these transports (and sending people to collections isn’t the answer), and it will result in a loss for the company.  You can only run so many runs for free before you are losing money, go bankrupt, and can’t provide the service.The only answer is for the city to run the service, as they can run in the red, and be subsidized by the city via taxes.  But the city also needs to fund the EMS system properly, which includes staffing enough units to handle the call volume, fixing the broken trucks and buying new ones when new ones need to be bought, and investing in a dispatch and ambulance tracking system to ensure the closest ambulance is sent to the call.  

    But based on their actions, and all the recent news articles, youtube videos, and media coverage, I don’t think the City of Detroit (like many many cities in the US) consider the status and repair of their EMS to be a priority for them.  They would much rather ignore the problem, blame someone else for their mismanagement, and refuse to take the steps to do what is needed to solve the problem.

  • http://profile.yahoo.com/3ZHMXMG5U6TEB66NBUQU6GCGWU Heather

    First, my hats off to the EMT’s and Medics who have been sticking it out through this whole mess. I know what it’s like to feel like you’ve got one foot nailed to the floor and are doing nothing but running around in useless circles. My hat is off to you for staying on to take care of the legit emergencies. 
    If I could make one sound suggestion re: non emergency transports (inter-facility, mostly), take a look at how University of Pittsburgh Medical Center handles their inter-facility transports. I’ll use the number of services who have UPMC medical command as 10, for the sake of illustrating this point. Okay, so 10 private ambulance services have medical command through one of the UPMC facilities. These services are all based outside of the city of Pittsburgh, and are spread over several counties. UPMC’s transportation department has a scheduler, who schedules rotations of ALS and BLS units from the various services to handle their inter-facility transports. Each service gets their fair share of shifts so that it’s evenly distributed. Under the agreement between UPMC and the ambulance services, UPMC pays -x- amount of dollars to the service provider, in addition to what the service is able obtain in reimbursement from the patient’s insurance. If the patient is a self-pay, there is a different amount paid by UPMC, and signatures from the patient/responsible party are obtained for future use, should the patient get retroactive insurance to cover him//her back to the date of initial visit. At the service I worked for, we had 2 dedicated UPMC trucks, and if that call volume was high and the extra resources were available, additional units were sent in to the city. Even if the referring facility/system doesn’t pay extra for the services, it may well be worth a look. 

    Admittedly, Pittsburgh has mainly three hospital systems in its region, UPMC, West Penn Allegheny and Forbes, not as many as Detroit, I’m sure. But, you have to consider this: UPMC has gone from one hospital (Presbyterian)  to multiple facilities (acute care hospitals. LTAC’s, specialty facilities, long term care facilities and satellite acute care offices, etc.)  with international affiliations and holdings. There just may be something there worth checking out. 

    Surely, it will not be an immediate fix, but those non-emergency inter-facility trips willl pay the bills and fund better equipment for the people working on the Detroit EMS. 

  • Jack Bode

    A public model can work in Detroit, turn a profit and provide outstanding care.

    My agency is in a large urban area. Here are some basics:

    1. Public Hospital based- Level One Trauma Center and the safety net hospital of consequence.
    2. 60,000 emergency 911 responses. We don’t do BLS, inter facility transfers or wheelchairs.

    3. Our Unit Hour Utilization was 0.42 for the entire year. During the summer it was 0.455
    4. Due to our safety net mission, our patient mix sucks and our reimbursements really suck
    5. We get zero public subsidy.

    6. By any measure, the medics are well paid – on par with police and fire, including the pension.
    7. Each and every year, our department profits several million dollars.

    So don’t kid yourselves. It can be done. My suggestion is to search out successful public models and discover what they are doing right.

  • volly12090

    This is why I VOLUNTEER!!!!  It is saving tax payers in our town money.  The discussion of hiring in paid to cover the area 24/7 has come up numerous times in our area but that would cost our tax payers even more of something they don’t even have.  I have volunteered for our local fire dept and rescue squad for over 10 years now and have enjoyed every minute of it.  I work 2 part time jobs and am a mom of 3! 

    • Resquejunkie

      Volunteer service serving a population of a million will NEVER work. I was a volunteer for some years as well before I went full time down south.

    • Thepessimist

      There is a problem with volunteers. They are not professionals. Stick to being a Mom. You apparently are good at it. Volunteers are often under trained and over intentioned. Stay it of the way. Worst suggestion I’ve ever witnessed to “help” resolve the issues in Detroit. With an average of 350 runs per day, how many would you make. Oh, and you have to live in the city. Which means your kids go to Detroit public schools. Enjoy!

  • Robert Martin

    Another glaring difficulty is going to be infrastructure. It doesn’t seem like most of DEMS’s equipment is serviceable to AMR (for instance) standards, and bringing in 30-50 new trucks is going to be quite an initial startup expense. The employees would likely move over, but it is a hefty initial cost.

    I’m not sure volunteers are a realistic answer at all. It seems like Detroit can’t even stop shooting at eachother. Perhaps breaking the city into smaller chunks?

  • an old dog

    One only has to look out county to Huron Valley Ambulance and their working model with some of the communities like Jackson.  They have a working model that works and is yet profitable. It’s all political and the politicans need to get away from having a “taste” of the proceeds. 

    • Bill Smith

      Apples and oranges.. HVA services an area where people have insurance beyond MasterCaid, employment to cover cost not picked up by insurance and don’t use the system as a taxi service

  • Too Old To Work

    If the Public Utility Model is so successful why are so many of them going under? Of course the key to the PUM model is System Status Management and getting the fire departments to respond first to stop the response clock. The cost savings are illusory, it’s in reality cost shifting.

    Detroit’s problem is that it’s Detroit. Successive corrupt administrations that steal the tax payers money. Fix the under lying corruption and a lot of Detroit’s problems will fix themselves.

    http://www.judicialwatch.org/blog/2010/01/detroit-corruption-keeps-piling/

    It won’t matter who runs EMS as long as the people who run the city are crooks. You can be sure that a contract to a private ambulance would go to the service that provided the best bribes, not the best price or service.

    The voters of Detroit are getting exactly what they deserve.

  • Ktflame2001

    EMS in Detroit is an interesting case study in itself. I am not a resident of Detroit and I do not proclaim that I know a lot about what’s going on in the Detroit FD, but I do know that EMS is deplorable and if it does not get fixed quickly people will continue to die unessesarily. I have over 25 years of experience in the Fire and EMS arena and have been following Detroit’s EMS wows for several years now. I have come to the conclusion that two things will need to take place; either EMS should be removed from under the Fire Department and a new EMS agency be formed or remain in the Fire Department with its own autonomy and budget.