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Funding needs in critical state

Funding needs in critical state

By CHRIS MENEES
Staff Reporter
The Twin City Ambulance Service is in critical condition.
Fulton city manager Steve Freedman said the service has reached a critical point in its existence and not taking action is not an option.
The Twin City Ambulance Service (TCAS) board of directors will hold a public meeting Tuesday night to hear and discuss citizens’ comments “on the impending cessation of emergency medical services” to the Twin Cities region, according to Freedman, also presiding director of the TCAS.
The meeting will be held from 6-8 p.m. at Pontotoc Community Center in downtown Fulton. All citizens, government officials, businesses and other impacted parties are being urged to attend.
Freedman said the ambulance service provides immediate and mutual aid response — including both basic and advanced life support service — to a more than 400-square-mile service area.
The service responds annually to about 2,000 calls, which consist of primary 911 calls, inter-facility transfers and requests for fire rehabilitation from fire departments and rescue squads. It also provides stand-by service for special events, such as high school football games.
“Historically, most responses occurred at the advanced life support level of service,” Freedman said in an emailed statement.
Ambulance service is provided from two stations — one in Fulton and another in Hickman, Ky. Areas served include all of Fulton County, Ky., and parts of Hickman County, Ky., Graves County, Ky., Obion County and Weakley County.
Freedman said “major infrastructure” within the coverage area includes schools, hospitals, courthouses, senior citizens centers, detention centers, industrial parks, railroad yards, major gas pipeline structures and various port facilities along a 12-mile stretch of the Mississippi River.
TCAS was formed in 1999 to provide emergency ambulance service to residents and others in the Twin Cities area and is structured as a not-for-profit Kentucky corporation. It has two owners with equal interests — Fulton and South Fulton.
In 2006, TCAS purchased a license to operate an ambulance in the City of Hickman and the surrounding area.
Freedman said providing quality ambulance service takes the dedication of highly-trained professionals who consistently excel in their field.
“Ambulance service is difficult to provide and requires the dedicated commitment of 17 full-time personnel and 24 on-call personnel who are employed by the City of Fulton as firefighters,” he said. “These devoted professionals undergo continuous state-of-the-art training, which allows them to consistently provide the highest levels of patient care and comfort. The quality of (emergency medical service) provided by this group is second to none.”
Freedman said staying in compliance with existing regulatory requirements, as well as incorporating new requirements, takes considerable administrative effort. The Kentucky Board of EMS and the Tennessee Department of Health’s Division of EMS regulate service in the jurisdictions where TCAS operates and perform audits to ensure compliance with regulations.
TCAS funding
Freedman explained the ambulance service’s revenues are derived from EMS billing (60 percent) and membership fees (39 percent).
Voluntary membership fees are collected from residents in the cities of Fulton, South Fulton and Hickman. Plus, some Fulton County residents and a few businesses within the coverage area pay membership fees.
However, over time, participation in the subscription membership program has steadily declined.
“And, more recently, this trend has accelerated,” Freedman said.
Small grants and minor donations are occasionally received by TCAS, but they have never represented a significant source of revenue and account for only about 1 percent of the service’s funding.
Freedman said in the past, because revenues collected did not cover operational costs, the City of Fulton “very generously” paid for many ordinary and necessary expenses on behalf of the ambulance service. Examples of those expenses include administrative salaries, excess overtime salaries, insurance, utilities, fleet mechanic labor, cleaning and maintenance.
“Combined with the seven mutual aid agreements that are currently in place, this arrangement permitted a wide array of stakeholders located both inside and outside the region to get a free ride by receiving the benefits of the service without having to share in its burden,” he said. “In what can be likened to the tragedy of the commons, all have taken advantage of TCAS service, but few consider its maintenance.”
Critical condition
Now, TCAS has reached “a critical point in its existence,” Freedman said.
“The organization is illiquid and insolvent and needs to be recapitalized and restructured, dissolved or sold,” he said. “The monthly revenue collected by the TCAS does not cover the expenses necessary without additional support. In the absence of a cost-sharing agreement amongst the three member cities or some other type of arrangement, the TCAS is dependent on the generosity of the City of Fulton alone to finance its current operations, not to mention the replacement of its aging fleet.”
He said issues related to the model, ownership, governance, management, operations and geography of the TCAS rule out simple solutions. An independent board operates TCAS, but there are factors that reduce the board’s effectiveness.
“Its members have typically not come from an ambulance or business background and the board has not retained outside counsel or experts when needed,” he said. “Due to the ownership structure and the multiple jurisdictions in which it operates, the TCAS’s ability to pursue alternative funding solutions, which might fill the gap, is substantially reduced.”
Freedman said even under ideal circumstances, there are economic barriers to providing emergency medical service in rural locales. He said “the demographic reality of the region results in a payer mix that is problematically structured.”
“Seventy-two percent of TCAS billings are charged to Medicare and Medicaid, organizations that pay according to a set schedule and without regard to amounts billed. TCAS was designed after a market-based business model that is unsuited to the needs and realities of the rural geography under which it operates,” he said. “Further, it makes no separate provision for the dispersed and low-density population that makes the per capita costs of providing services higher than in urban or suburban settings from which the business model appears to have been patterned.”
Seeking solutions
On Aug. 22, the Fulton City Commission adopted a municipal order which authorized Freedman to enter into negotiations with TCAS partnerships to obtain additional funding to support the service.
If no agreement is reached, though, the additional funding previously provided by the City of Fulton will cease Nov. 22.
“Unless an alternative source of funds surfaces or some other workable solution is in place, ambulance service will stop,” Freedman said.
He said discontinuance of ambulance — on even a temporary or incremental basis — could jeopardize public safety and affect the community’s longer-term social and economic sustainability.
“EMS helps provide stability and quality of life, which in return provides a base for attracting economic activity, retaining residents and maintaining community assets,” he said. “Such services are especially critical during difficult times of economic restructuring.
“If ambulance service stops, there will be increased uncertainty and decreased ability to cope with stress and change. Increased out migration of residents and businesses which would be expected to result from this new reality could reduce local resiliency and lead to a decline in community standards. Increased transport time and failure to provide pre-hospital triage would create preventable risks. This should never be allowed to happen here.”
Freedman said since the TCAS is “a vital community service,” provision must be made to ensure it continues — something which he said can only be done “by shifting financial responsibility to all those who benefit, not the City of Fulton alone.”
He said plans designed to extract fair funding must be explored, adding that agreements with benefactors to contribute to shortfalls in proportion to their expected benefit could be one way to close the gap.
“However, this should be accompanied by a substantial recapitalization and reorganization of the TCAS management structure, one that replaces the existing constituent pay-in balance and reorganizes the current board of director structure,” he said. “Other solutions that can be explored include a merger or acquisition with another larger governmental agency that possesses greater reach and a capacity to tax. Alternatively, a merger with or acquisition by a private company with complimentary operations and economies of scale may be possible.”
Action necessary
In any case, “inaction is not an option,” Freedman said.
“The current monetary arrangement for making TCAS a financially viable operation is simply to rely disproportionately and unjustifiably on the City of Fulton. This is unsustainable and everyone who depends on the TCAS will suffer if responsible funding terms are not decided immediately by those with the authority to do so,” he said.
“Such reorganization should not be seen as an attempt to dismantle TCAS, but as the opportunity to return this essential service to as high a state of health as that which it provides the community. Nostalgia for how the TCAS was funded in the past is not a valid reason to shrink from the necessary changes demanded by today’s economic circumstances.”

Published in The Messenger 9.22.11

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