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Ambulance company shut down causes state of emergency

Illustrating just how vital ambulance service is to Mississippi communities, 16 counties declared a state of emergency when Emergystat Ambulance Service unexpectedly announced it would discontinue service January 23. The company announced the closure at approximately 5 p.m. It would shut down at midnight.

Alabama-based Emergystat was the sole provider of ambulance service in 23 counties across Mississippi (Amite, Coahoma, Chickasaw, Claiborne, Greene, Holmes, Jefferson, Kemper, Marshall, Neshoba, Newton, Noxubee, Panola, Pearl River, Scott, Simpson, Smith, Sunflower, Tallahatchie, Tunica, Wilkinson, Winston and Yazoo).

With the announcement, the affected counties became alarmed, and the Mississippi State Department of Health (MSDH), Mississippi Emergency Management Agency and county boards of supervisors went into crisis mode. MSDH quickly set up a Command Center, and reported fielding hundreds of phone calls the night of January 23. The race was on to head off a potential healthcare disaster.

Crisis averted — for now

Just as quickly as the emergency arose, it was solved, at least temporarily. State and local authorities managed to hammer out alternative plans for all of the affected counties during the night. But at a press conference held the morning of January 24, State Health Officer Dr. Ed Thompson made it clear that challenges remained.

“We are sending Health Department staff into the affected counties in order to help with the transition, and to aid in the licensing of ambulance services so these counties can return to their normal service level as quickly as possible,” he said.

The temporary solutions varied from county to county. For instance, Smith County leased its Emergystat ambulance from the company, and hired the ambulance’s staff. Other counties turned to other ambulance services for help.

One of those counties was Simpson. Magee General Hospital administrator Althea Crumpton says the Emergystat closure was completely unexpected — and scary. A rural county, the sick and elderly depend on ambulance service to and from the hospital.

In Simpson County’s case, the alternative is American Medical Response (AMR), a behemoth ambulance service provider that was already serving six counties in Mississippi at the time of the emergency. It reached an agreement with the Simpson County Board of Supervisors to provide service for 30 days. According to Crumpton, the supervisors were preparing to send out requests for proposals to land a permanent service back in the county at press time.

Crumpton had high praise for AMR, as well as local leadership, who she said did a great job. Jim Pollard, a spokesperson with the Southeast Division of AMR, was also extremely impressed with the local leaders’ response.

“I can’t say enough about the county governments,” he says. “On the night of January 24, nobody was asleep at the switch. The people in those counties can be proud of who they elected.”

Ailing ambulances

This is not the first time AMR has served Simpson County. It was the county’s ambulance service in the 1990s, and transferred the contract — to Emergystat. Pollard says the company and the county hated to part ways, which was done amiably, but that AMR could no longer financially justify holding the contract.

Pollard says AMR felt stepping in to help in the crisis was “morally and ethically the right thing to do. It’s part of our corporate mission. We exist to help people.”

At the same time, he says AMR, which is publicly traded, has to measure its decisions in financial terms.

Emergystat’s closing showed the challenges faced by the ambulance industry today. Emergystat said the closure was due to the loss of liability insurance and financial problems primarily because of slow Medicare reimbursements.

This is not an isolated issue, according to the American Ambulance Association (AAA). Last summer, the AAA released the final report of an ambulance cost study, which polled roughly 1,400 service providers. It estimated that Medicare payments were 8% below average cost per transport in 2004. Only the largest providers were saved from losses, while the smallest carriers saw Medicare payments as much as 15% below cost.

AMR certainly falls into the large category. It serves 38 states and the District of Columbia, and operates nearly 4,500 ambulance nationwide. Yet, it is not immune to the challenges faced, which, on top of insufficient Medicare reimbursements, includes escalating insurance costs as well as the rising price of gasoline.

Pollard points out that AMR serves the metro Jackson counties of Hinds, Madison and Rankin, the Coast counties of Harrison and Hancock as well as Adams County. With the exception of Adams County, all the areas served by AMR have relatively large populations compared to the state’s other counties. That, and economies of scale, allow AMR to operate profitably. Rural areas offer challenging financial environments.

At press time, AMR had 30-day agreements with Simpson, Jefferson and Pearl River counties, a 10-day agreement with Claiborne County and was talking with Wilkinson County. AMR has signed a one-year contract with Amite County, and Pollard was hopeful that AMR could pick those counties up permanently.

With coffers low in many of the affected counties, permanent solutions may not be that easy to find. Factor in that some counties had already paid Emergystat and may have to go through the courts to get the money back, and the situation remains a source of concern.

Contact MBJ staff writer Wally Northway at wally.northway@msbusiness.com.

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