EMS Revisited: Surviving Tough Times

How to ride out an uncertain economy

This article originally appeared in the January 2002 issue of EMS World Magazine.

Economics wonks seem to agree: The United States is headed for (or is already in) a recession. Times were getting tight even before the terrorist sucker punch of September 11; in its aftermath, the American economy, like the Americans who fuel it, seemed depressed and sluggish. With an imminent war unlike any fought before, people weren’t sure how to react.

The EMS economy, unlike that of many industries, in some ways transcends the economic winds that buffet other professions. However hard times are, people don’t stop getting sick and injured. However, neither is EMS fully immune. If a department’s revenue shrinks, big-ticket purchases become important decisions to be weighed with care. In some places, it’s already happening. Departments that think they’re exempt, experts say, are deluding themselves or are rare departments indeed.

“EMS is vulnerable on a couple of fronts,” says Bob Holdsworth, president of EMS consulting firm Holdsworth Pelton, who has been advising clients on girding for the coming economic storm. “As more people are laid off, there will be more uninsured patients. There will be personnel shortages at the insurance companies. Then there is the Medicare fee schedule. These are all things I’m telling our clients to be prepared for. They should have enough credit line, cash reserves or a combination of the two for a minimum of 90 days of operation.”

Stretching the Net
As the ‘safety net’ of American healthcare, EMS is depended on to catch those who fall through the cracks. As the U.S. economy contracts, that number is likely to rise.
“As people are laid off, many are opting not to take their COBRA insurance with them because they have to pay for it,” says Holdsworth. “That means there are more people who might need to use an ambulance who are going to have problems paying their bill.”

Another factor is the new Medicare fee schedule, which will reduce revenue for most providers, in some cases dramatically.

“The fee schedule is going to be a nightmare,” says Holdsworth. “What I’m seeing around the country is that carriers are not uniformly prepared to implement it. We’re already seeing claims being denied under the new codes. Our carrier has asked us to start using them so they can get a handle on it, and they’re denying claims under these new codes, saying ‘It’s not medically necessary’ using new rules that aren’t in effect yet!”

Finally, to this increasingly volatile equation, add the combustible variable of terrorism. The attacks of September 11 left the nation jumpy and vulnerable to the anthrax assaults that followed. Many Americans had police, fire and EMS virtually on speed dial, and emergency responders were rushing responses to just about every bit of white dust in the country.

“We’re seeing an increased use of 9-1-1 by municipal leaders who expect it to be the safety net when all these scares come through,” notes Holdsworth. “People will call, hysterical that they just got talcum powder in the mail and think it’s anthrax. Some of the departments we work with are doing two and three false alarms a day. The call volume’s going up.”

While the heroic rescue efforts in New York City certainly galvanized Americans’ appreciation for their emergency responders, any boost it provides to EMS is likely to be transient. Donations may be up for now, but when the family finances tighten, they won’t stay there. And while cops and firefighters are in line for unprecedented largess from a grateful Congress, EMS, never as adept at playing the political game, is, as usual, a step behind.

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