Squeeze Me Tighter: EMS and Healthcare Reform

      The early optimism about healthcare reform waned as summer wore on, swallowed amid partisan rancor, growing public skepticism and the vulgar realities of patchworking together such an enormous package of law.

   But when Congress took off for the month in August, preliminary legislation was on the table that spelled out what America might expect from a final bill, if and when one's passed. And there are components in there, frankly, that should be of great concern to EMS and the ambulance transport industry. The well-intended efforts of lawmakers could lead to unintended consequences with profound ramifications for the way we do business.

   "Any healthcare reform package that ultimately passes will have impacts on EMS and medical transportation, and the consequences of those impacts aren't fully known," says Rick Keller, an expert on EMS finance and resource utilization with industry consultants Fitch & Associates. "We don't know how significant they'll be. The unintended consequences could be huge."

   There will be a lot of coulds in this discussion, because as it's written, nothing it talks about is final. What's in the preliminary legislation lawmakers unveiled in July could change tremendously in September, when Congress reconvenes and begins its final push toward disposition. The most ambitious aspects may be gutted, mooting some of this discussion (though remember it for the future; these questions aren't going away). Heck, a bill may never be passed at all.

   But if one is, and it retains certain elements included at the break, it will likely cause problems for a lot of people in the emergency medical response and ambulance transportation businesses. Lots of money and operational ability are at stake. Those end-of-life death panels you heard about may have been a crude partisan rhetorical contrivance, but in a worst-case scenario, dispassionate councils of non-EMS bureaucrats may indeed hold your future in their hands.

THE COSTS OF DOING BUSINESS

   Concern No. 1 involves perhaps the biggest issue under debate, a possible public insurance option.

   Consider a public health insurance program by which the government pays emergency and ambulance providers for services provided to those it insures. Now consider the existing public health insurance program by which the government pays emergency and ambulance providers for services provided to those it insures.

   Per a 2007 report from the Government Accountability Office, that program, Medicare, reimburses many ambulance providers at less than their actual costs of providing service. While noting a wide national variability in the costs of ground ambulance transport, the GAO determined that on average, Medicare repaid urban ambulance providers at 6% below their average costs, and so-called "super-rural" providers at 17% below. In 2010, the GAO estimated, up to 61% of providers without shared costs could be reimbursed at less than their expenses. Among super-rurals, that figure may be as high as 82%.

   The GAO's numbers assume the planned expiration of temporary payment increases first provided by the 2003 Medicare Prescription Drug, Improvement and Modernization Act (MMA) and increased by the 2008 Medicare Improvements for Patients and Providers Act (MIPPA). That expiration may or may not happen. But the point is, for many ambulance organizations, every Medicare patient is a money-losing proposition.

   Now imagine millions more such patients, treated and transported under a public plan based on a reimbursement structure that's similarly insufficient.

   "If people start shifting from commercial plans to a government plan, and they reimburse by a similar methodology, that will have a real ominous impact on EMS," says Keller.