Cambrians will have just one ambulance serving them during the 12-hour night shift, after health district trustees voted Wednesday, March 21, to cut the second shift.
The Cambria Community Healthcare District board voted 4-1 in favor of a recommendation by Administrator Bob Sayers, with Vice President Barbara Bronson Gray dissenting.
The move came following a morning presentation that outlined the financial challenges facing not only the Cambria district, but ambulance operators across the country.
At that meeting, consultant Steve Athey outlined those challenges in stark terms.
Before 2008, Athey said, ambulance districts relied heavily on tax-based government subsidies. But the Great Recession changed all that, as governments ended those subsidies because they needed the money for infrastructure and other expenses.
Districts compensated by raising their service fees dramatically … and passing those costs along to insurance companies. Those companies, however, eventually decided they’d had enough. They refused to pay at the same 80 percent rate they'd been offering when the fees were lower, and instead of sending the money to the ambulance providers, they started paying the patients instead.
The result, Athey said, was predictable: “The collection rate went from 80 percent to 17 percent, because what did the patient do when they got that money? They spent it.”
Reimbursements are falling as the cost of ambulance transports and equipment continues to rise, Athey said, putting service providers in a bind: “The margins are incredibly thin,” he said. “Things are getting harder and harder, not easier and easier.”
Medicare, which pays less, is covering a larger share of ambulance patients, while commercial transports – which pay more – are in decline. Sayers said the district had 47 fewer commercial transports than the previous year, representing “70-some-thousand dollars lost in commercial revenue.”
Sayers said he, Athey, district Operations Director Jason Melendy and SLO County EMS Director Vince Pierucci formulated the recommendation to cut one night ambulance shift while also seeking ways to reduce and spread out workers compensation payments.
Sayers said at the board’s regular meeting Wednesday afternoon that the district is operating in the red, with expenses at $2,836.38 compared to revenue of $2,724.50 for each ambulance transport.
By adopting his group’s recommendations, he said, the district could keep revenues the same while cutting expenses by $245 to $2,591 per transport.
Board member Shirley Bianchi said that, while the district didn’t have as much information as she’d like, the situation demanded immediate action: “We are close to having a burst appendix, and we need to take steps now.”
But Bronson Gray argued that the district had not taken other cost-cutting steps, which might have allowed it to preserve the second night ambulance.
“I do not believe that we’ve made all the cuts in expenses that we can first. We really have not cut anything substantial,” she said. “If we made those cuts, then the bleeding would stop. … It is my strong opinion that we are not ready to do this, and I am not in favor of it.”
Bronson Gray pointed to suggestions that the district conduct a midyear budget review and engage in line-item expense cuts.
Trustee Bob Putney responded by saying the situation was dire, and action needed to be taken at once to avoid the possibility of insolvency.
“If we put this off, I’m convinced by staff, by our EMS specialists that we’ve hired and by Bob Sayers, that we won’t make payroll, which means our employees won’t come to work. That’s not a threat, it’s just what’s penned out on paper. It’s a fact,” Putney said.
“We have to keep this district afloat, and we have to keep the highest level of service that we can afford. And right now, we cannot afford to continue to have two ambulances 24-7.”
Putney moved to accept Sayers’ recommendation and cut the second night ambulance, and Bianchi seconded that motion. Board President Jerry Wood and Mary Anne Meyer also voted in favor of the move.