MELROSE, Mass.-- The city's Fire Department may get back into the ambulance business more than a decade after budget cuts forced Melrose to hire a private company to run the service.
Mayor Robert J. Dolan has asked a study committee to spend the next several months weighing the cost and benefit of returning the service to the 50-member Fire Department.
Action Ambulance Inc. has a contract with the city through 2008. "If there is a way we could do this without adding undue burden to our budget, then I think it's something we should look at," Dolan said in an interview at City Hall.
Fire Chief John O'Brien, who proposed the idea, estimates an ambulance would require the city to hire eight new firefighters, but could also generate $500,000 in annual revenue.
"We already send a truck to medical calls," O'Brien said. "Why shouldn't we get something back from that?"
Bob Forsey, president of the Melrose Firefighters Union, said the department's rank-and-file members also are in favor of the proposal.
"We want to get the program going right away," Forsey said, adding that he considers a Fire Department-based emergency medical services system as "the best you can have."
The switch would bring Melrose in line with many other local fire departments. As the number of emergency calls have increased, some departments have looked to ambulance services for growth.
Manchester-by-the-Sea, for example, in January hired three firefighters-paramedics to run an advanced-life-support ambulance, which responds to heart attacks, serious accidents, and other major emergencies.
The town's Fire Department already was running the basic ambulance service, answering calls for broken bones, sudden illness, and other less-serious problems.
"It made sense for us," said Manchester Fire Chief Andrew Paskalis. "We're a small town. It wasn't cost-effective for a private company" to base an advanced-life-support ambulance in the community, he said, so runs for serious emergencies were being dispatched from out of town. "Now we can handle it."
Keeping services local is a growing trend, according to area officials."In the last four or five years, communities started moving in this direction," said Jonathan Epstein, executive director of Northeast EMS, the state's regional council for emergency medical services, based in Wakefield.
"It's all related to call volume and revenue generation." Shorter hospital stays and an aging population are among the reasons cited by fire officials for the high volume of emergency medical calls.
In Lynn, the largest fire department in Essex County, emergency medical services accounted for about 70 percent of the 18,000 calls answered last year, Fire Chief Edward Higgins said.
"Fire service has changed. We respond to fewer fires," said Higgins, who credited improved fire codes and safety education. "The reality is, most of our calls are for emergency medical services. We have the fire stations in the community, we might as well provide the service."
Lynn and Nahant opt for a "tiered" system, in which ambulance duties are shared by the fire departments and a private company. Lynnfield, Manchester-by-the-Sea, and Middleton are among the communities that run their own ambulances.
In Lynn, the Fire Department staffs one advanced ambulance unit. Action Ambulance provides backup and handles all calls for basic service. The Fire Department's ambulance generates about $600,000 in revenue each year, enough to break even.
"We're not in this to make money," Higgins said. "We do it because we feel it's a service we should provide."
In Topsfield, the Fire Department is certified to run an advanced ambulance service, and its paramedics regularly back up Middleton. Still, voters at a 2004 Town Meeting rejected a plan to have the Fire Department run the ambulance service.
It would have required hiring two new firefighters and purchasing two ambulances. The town has a contract with Lyons Ambulance of Danvers.
"The ambulance here is a mixed bag for us," said Topsfield Fire Chief Ronald Giovannacci. "We go to the calls, but because we don't transport" patients to the hospital, he said, "we don't get any revenue from it."
Ambulance bills are usually paid by health insurance providers. The financial risk is linked to the percentage of people in a community who have health insurance.
The risk is greatest in urban centers, where there are large numbers of uninsured people. Lynn, for example, has a collection rate of 65 to 70 percent. People without insurance still receive a bill, but often can't pay.
"We chase down payments as much as we can, but there is always a certain amount that you won't get," said Higgins, the Lynn fire chief.
In Melrose, poor collection rates helped doom the city-run ambulance service in 1992. A $4.5 million deficit prompted the city to make cuts across the board.
"It was a perfect storm," O'Brien, the fire chief, said. "We had a deficit. We had layoffs. We lost our ambulance."
If the ambulance were to return, O'Brien said, he would favor a shared system. The Fire Department would provide basic service, while a private company would handle the advanced service.
"That model appears to work well for communities," he said. Under its contract with Melrose, Action Ambulance pays $1,000 a month in rent to the Fire Department to keep an ambulance at its headquarters on Main Street. The company also keeps revenue from ambulance calls.
"They do a fine job. This isn't about Action Ambulance; it's about our department planning for the future," O'Brien said.
One Action official cautioned that the future might not be so bright. The company now runs a $25,000 deficit in Melrose, mostly because of the number of people who are uninsured and can't pay their bills, according to Michael Woronka, chief operating officer at Action Ambulance.
"Our data suggests that Melrose is not as highly insured as people think," he said. He also said Action is not doing enough transports to cover its costs. Action gets about 1,200 ambulance calls each year, about 300 less than it needs to turn a profit, he said.
"We have a tremendous amount of data," Woronka said, "and there is nothing to show that in Melrose our call volume will go up soon. We anticipate losses for the next couple of years."