By Todd Sheridan, MBA; and Fred W. Wurster III, MS, NRP
Over the last 20 years, there has been a significant push for EMS to deliver service to all calls as quickly as possible and with advanced life support (ALS) services on each responding unit.
This model is being challenged today as agencies are experiencing financial hardships, staffing and deployment challenges. Agencies are tackling these problems differently, but there are several common themes that we see in our consultant practice at Fitch & Associates that we felt may be valuable to share as the fault lines of EMS are shifting rapidly beneath us. The current climate and horizon of EMS is evolving and, as such, the EMS delivery model is also evolving.
Financial hardship
Since the Centers for Medicare and Medicaid (CMS) implemented the Medicare Fee Schedule, EMS agencies have been working to “lean” out their business model to sustain services and their bottom line. Unfortunately, since 2017, CMS rates have increased by only 5% and over the same period (excluding 2022 inflation), the Consumer Price Index (CPI) increased 7.7%.
On the horizon, there is proposed legislation that would prevent ground transport units from balance billing patients, which may further reduce revenues.
To make up for these financial losses, 911 response agencies require increased funding from local government and the tax base. Furthermore, as two of the highest costs of providing service are personnel costs and performance expectations, agencies are changing how they respond and deploy EMS units and personnel.
Staffing challenges
With the impact of COVID-19, fire and EMS agencies were not immune to the great resignation and, in addition, fewer individuals are entering the field. Also, during the height of the COVID-19 pandemic, EMS training institutes ceased training activities and thus are not graduating new personnel that would have helped combat attrition rates. Compounding the problem, over the last several years, EMT training requirements have increased and now encompass up to 3 months to complete with a now, lower pass rate. Additionally, paramedic education has increased to the collegiate level requiring up to 24 months and up to 60 hours to recertify every two years.
Salaries prior to COVID-19 were not in alignment with other markets such as big-box stores or fast-food restaurants. Particularly since the pandemic, salaries have notably increased in those markets to match and now exceed EMS salaries. Many of these positions do not require the extensive training, scrutiny, unsafe situations or long working hours that impact work-life balance. EMS agencies are now competing with these new market pressures by either cutting into their profit margins and/or requiring tax-payer subsidies to cover the financial challenges.
To combat attrition, agencies are implementing earn-while-you-learn programs, whereby an agency will extend an employment opportunity to an untrained individual and compensate them as they attend entry level training courses. The agency pays for the individual’s training costs and time in class. Fewer individuals are taking time out their schedule to be educated or volunteer as an entry into the Fire/EMS industry. Graduation rates range from 50% to 70%. The varied graduation rates are due to individuals deciding the career path is not a fit or they are unable to complete the education requirements. One notable positive outcome of the earn-while-you-learn model is that it attracts a larger and more diverse population as there are minimal barriers for entry.
Deployment changes
Agencies are working to leverage opportunities to decrease the overall cost of service without diminishing care. EMS has evolved and is heavily reliant on data. Data has shown that:
- Fewer 911 responses require immediate lights and siren response or even an ALS provider.
- By implementing 911 call triaging in the communications center, dispatchers can determine the patient’s severity upon initial request and by using objective protocols, can determine the most appropriate resources to send.
- Over the past 10 years, fire departments have taken an active role in medical first response (MFR). This has allowed critical patients to receive time-sensitive care, such as CPR or airway management, thus allowing EMS rescues to be the secondary arriving unit to provide care and transport.
With these advancements and the use of data-driven decisions, government entities are studying ways to determine how they can save money by changing response time expectations, changing the crew configuration, and/or implementing community paramedic programs.
Performance Expectations
Government entities are evaluating the cost savings that can be achieved by lengthening ambulance response times without impacting clinical outcomes. Since the expansion of MFR programs and with the investment government entities have made, they are looking for options to leverage this investment and potentially lengthen response times.
Fitch & Associates is often hired to evaluate systems to understand their current performance and to determine if there is an opportunity to expand ambulance/rescue response time for cost savings while leveraging MFR and meeting or exceeding accredited standards. Fitch evaluates system’s performance and benchmarks against the National Fire Protection Agency (NFPA) and the Commission of Fire Accreditation International (CFAI) standards. This allows Fitch to present actionable options to our clients so that they can make policy decisions regarding which model to implement and financially sustain.
Crew staffing
As previously mentioned, over the past 20 years, there has been significant push to staff and equip every ambulance and rescue vehicle at the ALS level. This means, at a minimum, there is one paramedic and one EMT on a responding unit. Many governmental entities have made the policy decision to place two paramedics on an ambulance, making that the costliest model to operate. By combining protocol-driven dispatching with data analysis, agencies can make informed decisions regarding crew make-up, and thereby mitigate staffing and financial challenges.
One of the most notable shifts for agencies is to begin using basic life support (BLS) transport units. In many systems, Fitch has found that up to 40% of all transports are non-urgent and do not require a paramedic. This is further confirmed by dispatchers, who upon initial call taking, more accurately determine what responses are non-urgent, based on protocols approved by their medical director. By using EMTs verses paramedics, agencies can send the BLS transport unit on non-urgent responses and the ALS units can be at the ready for life-threatening emergencies. Lastly, due to the increased completion time of EMS educational programs, agencies are finding they can quickly expand their service by adding BLS units and then work to train personnel at the paramedic level.
Community paramdicine
Over the past 5 years, community paramedic programs (CPP) have been started in various systems to tackle specific community health issues. The goal of community paramedicine is to prevent patients from overutilizing the 911 system and/or prevent readmission to the hospital.
Unfortunately, there is no standardized funding source for providing this service. Even with the goal of the program being reduction of hospital readmissions and CMS penalties on the hospital system for readmissions, many hospital systems are reluctant to help fund a CPP. Lastly, EMS is a fee-for-service industry and is only compensated when a patient is transported. With a reduction in volume or deferral of patient transports, there will be a notable reduction in revenue.
Fitch has evaluated systems where a CPP has been implemented and has found that the cost to the taxpayers to provide the program far exceeded any cost savings to the EMS system. In some cases, the number of response unit hours saved by not responding to CPP-type calls did not allow for any reduction of resources as the hours were too few to reduce even a 12-hour shift per day. Thus, the personnel and time running this program becomes an added expense to the agency. In some agencies, they have found success in providing this service as a community benefit. Fitch urges clients to understand the goals of providing the service and fully understand the cost saved verses expensed when implementing a CPP before making a policy decision.
Ensuring EMS is there for citizens
Fitch sees both EMS agencies and government entities taking a hard look at their EMS systems, as more and more are unable to provide 911 EMS service without a subsidy. It is imperative that both agencies and government take a proactive approach by evaluating their performance expectations against the ability to pay for the desired service level, to determine what will be needed to ensure there is a proper EMS delivery models for those times when a citizen is having one of their worst days.
About the authors
Todd Sheridan, MBA, is a junior partner with Fitch & Associates.
Fred W. Wurster III, MS, NRP, is a senior associate with Fitch & Associates.
