HELPING EMS & HEALTHCARE LEADERS REVIEW, REFOCUS, AND RESET THEIR ORGANIZATIONS FOR SUCCESS. IN PERSPECTIVE
Volume 1 • JULY 2019
EMS ECONOMICS: KNOW YOUR NUMBERS …ANDWHAT TO DOWITH THEM. A Right and a Wrong Way to Ask for Increased Subsidization
T he economics of business in our EMS world are changing. It’s an unfortunate reality but one every agency will have to address at one point or another. In order to keep operations running, you’ll likely have to ask municipal officials in the community for increased subsidization. It’s important that you do your homework before you get to the meeting at Town Hall. If you pride yourself on not being a numbers person, I’m sorry to say you’ll have to re-think that. Creating a presentation for funding is definitely a numbers game. You’ll need to know the numbers related to your demographics and collection rates, and exactly how the money you’re requesting will be spent — and that’s just for starters. Here’s some additional material you’ll need to gather. RESPONSES VS. TRANSPORTS One important aspect to discuss during these meetings is the number of calls you’re responding to that don’t result in a transport. Nowadays, the vast majority of services are only paid based on their number of transports, but it’s important for city officials to see that even if you respond to 4,000 calls and only transport 3,200, you still had to incur expenses as “cost of readiness.” You had to have a crew ready to respond to all 4,000 requests for service.
HEART ATTACKS DON’T MAKE APPOINTMENTS When money is short, outsiders first recommend cutting back on hours during slower times. While we can reduce the number of ambulances available in the evening, we can’t shut down the service. The basis of EMS is we are available to help 24/7. Just like patients don’t plan for the most opportune time to suffer an injury or have a heart attack, we can’t plan for emergencies not to happen during a specific time of day or night to balance our budgets. In other businesses, you cut back and slow down when it’s slow. In EMS, we can only cut back to a certain point. PAYMENT UNCERTAINTY Municipal officials also need to understand that if you respond to 4,000 calls and transport 3,200 patients, the vast majority of those 3,200 patients aren’t paying full “IT’S IMPORTANT FOR CITY OFFICIALS TO SEE THAT EVEN IF YOU HAD TO RESPOND TO 4,000 CALLS AND ONLY TRANSPORT 3,200, YOU STILL HAD TO INCUR EXPENSES AS ‘COST OF READINESS.’”
price. That’s where understanding payer mix is important. If you can determine the percentage of those 3,200 patients who are on Medicare and Medicaid and then show them that data graphically, then you can pinpoint exactly how much money is lost. EMS is the only niche in medical industry that does not know how it will be paid for any of its services until after it provides said service, and, while it’s not the patients’ fault, the impact on agencies’ abilities to treat is real, and community leaders need to know. All this information needs to be put into graphics that you can send with a budget request. Most services think they can just walk in a meeting and request $100,000 without answering questions, but this strategy won’t get you far. If you need help crafting your own budget presentation, let me help. Shoot me an email at Bob@Holdsworth.com! This month, in Access Point Members Only, we’ll dive even deeper into EMS
economics. Want more info? Go to Holdsworth. com/AccessPoint.
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