Emergency ambulance costs in Harford remain ill-defined [Editorial]

Before Harford County starts pumping money into the paid ambulance service run through the volunteer organizations, someone needs to get a better handle on how much money will be involved.

For the first time since the government of Harford County became directly involved in paying for a portion of the costs of providing emergency ambulance service, an audit of the finances of the ambulance organization has been done, and the results are fairly disturbing.

The estimated annual cost of ambulance service is $12.2 million, but the revenue going into the system is projected to be in the range of $5.9 million to $6.6 million annually.

The county's total annual budget is well in excess of $500 million, so an additional annual expense in the $6 million range is a relatively small percentage. Still, $6 million a year in new expenses is a substantial addition in a category where just a few years ago the personnel expense was zero.

Perhaps just as important is the financial reality of the situation the county is facing, namely entering into an exclusive service agreement with a private organization, the likes of which is unparalleled.

A bit of background is in order. For decades, ambulance service in Harford County had been provided by non-paid members of the various volunteer fire and ambulance companies. Over the years, as the training regimens for fire and ambulance volunteers become increasingly rigorous, the county government has provided funding to cover equipment and infrastructure expenses to free the volunteers from the need for fundraising.

Over the past three decades, the demand for ambulance service in Harford County has far outstripped the ability of an all-volunteer service to deal with all the calls. Starting about 10 years ago, the volunteer organizations with some of the busier ambulance components began experimenting with paying ambulance crews. The volunteer system has come to rely on paid ambulance crews, resulting in the current system. Under that system, an umbrella organization of participating fire and ambulance companies, known as the Harford County Volunteer Fire and EMS Foundation, pays a staff of ambulance crew members. The idea is for the paid crews to supplement the ambulance service provided by volunteers.

To date, the system organized by the Harford County Volunteer Fire and EMS Foundation appears to have been successful in making sure calls for emergency service are answered, but it has been a financial failure, requiring an unanticipated county bailout in 2012 totaling $400,000. This was in addition to the $2.65 million in direct county funding the foundation received in the 2012 and 2013 fiscal years.

Then came the audit, projecting the costs of operating the volunteer-run paid-staff ambulance service to increase to roughly $12 million, about half of which the volunteer service isn't prepared to fund.

Disturbingly, the half the volunteer fire and ambulance service is prepared to cover is likely to disproportionately impact the costs people and businesses pay for health insurance because almost all that money is expected to come from private insurance companies. The reason: several years ago, the Maryland General Assembly passed a law that requires health insurance companies to pay the requests for donations sent by volunteer ambulance companies as if they were bills, even as people who are uninsured can treat them as simple requests.

The amount of insurance company reimbursements is expected to be roughly $5.9 million to $6.6 million. There's a substantial disconnect between that estimate and what's been collected by the foundation. The audit reports the foundation collected $40,000 in insurance reimbursements in 2012, and nothing in 2013.

The financial disconnect is especially profound considering what a windfall the insurance reimbursement law was to the fire and ambulance companies early on. There was no restriction on how the ambulance insurance reimbursement money was to be spent, meaning it could well have gone to pay for fire equipment or firehouse upgrades, rather than ambulance equipment and supplies.

The result of all this is the county government is in a pinch when it comes to providing the vital public service of emergency ambulance capabilities. For years, it had relied on a private, secretive, all-volunteer system, which was given great latitude and subjected to limited public scrutiny on the grounds that if the county ended up having to foot the bill for personnel costs, the effect on county tax rates would be more than noticeable.

Now, it has come to pass that the county government will be responsible for covering the personnel costs of the ambulance service. (It's worth noting that the fire portion of the volunteer service, to date, has shown itself to have the personnel strength to meet the county's needs without paid staff.) The arrangement, however, is an uncomfortable one as the fire and EMS foundation is a private, albeit nonprofit, organization that is the only bidder for a service that relies half on the largesse of a state-sanctioned targeting of private insurance companies and half on tax revenue provided by the county government.

Furthermore, it remains to be seen how accurate the $12 million a year estimate is for providing ambulance service, and the issue of county liability for a unique county-funded enterprise is unclear.

What is clear is that if the county government is going to end up paying for most or all of the cost of providing emergency ambulance service, it needs to have a much firmer grasp of how much that cost will be, and a good deal more control over the management of the system than it does through the arrangement in place.

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