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Can a city ambulance service rescue a struggling budget?

There are two things you can always count on in Amsterdam, NY. The first is that for every GAVAC ambulance you see with its lights on, there’s a fire department rescue vehicle close behind or ahead of it. The second is that city residents will take any opportunity, whether it’s on the web, radio, newspaper, or during the public comments at common council meetings, to complain about their taxes. In the coming months, the city has the opportunity to address the latter with the former.

The revenue estimates from at least three different medical billing companies presented by Fire Chief Michael Whitty last week look promising. The city could potentially realize somewhere between $400,000 and $600,000 in revenue per year by providing an ambulance service, if the fire department can respond to all the calls requiring transportation.

Last year, Whitty presented cost estimates to operate two vehicles. This year, he is proposing only one, and the department may not realize that full amount as it works alongside GAVAC at first. However, even if the city is able to respond to half the calls, the revenue could still make a 1% to 2% difference in city taxes.

What many people don’t realize, and what Whitty has tried to explain to anyone whose mind is open on the subject, is that almost all city firefighters are already trained as paramedics and are already putting in the time responding to emergency medical calls. But because GAVAC has the vehicles to transport patients to the hospital, they can bill the patient or their insurance company, while the city currently can’t.

This isn’t your grandfather’s GAVAC

A city-run ambulance service would most likely cut into GAVAC’s revenues. And that’s probably where some people’s resistance to the idea comes from. The organization started out in the city as a grassroots, all-volunteer organization back in 1966 with a starting budget of $33,500. They enjoy a great reputation in the Amsterdam area. Anyone I’ve ever talked to about GAVAC has had only good things to say about them.

Over the past decades, GAVAC has done well for itself. Today, the organization serves the entire Montgomery County region, operates 12 vehicles, and opened a second station in Fort Plain in 2014. According to public IRS filings, GAVAC took in $3.3 million in revenues, paid out $2.5 million in salary and benefits, and had a $1.7 million fund balance in 2014. Filings for 2012 and 2013 show numbers nearly as large.

To put it bluntly, this is not your grandfather’s GAVAC.

Over a decade ago, back in 2004, many people came out against the idea of the city run service when it was introduced by the previous fire chief, even going so far as to approve by referendum a change to the charter which specifically prohibits the city from forming one.

At the time, GAVAC handed out flyers with the slogan “save GAVAC.”

In 2016, it’s hard for me to imagine that same slogan would stick. They might feel a pinch, but I highly doubt they will go out of business.

I think that over a decade is certainly a respectable amount of time to wait before taking another look at this issue. A referendum doesn’t mean a law has to be carved in stone forever. We have a process, under New York State law, for amending the city’s laws so that they work for the city’s benefit.

Two corporation counsels in a row have now said the same thing: a referendum to remove the restriction from the charter is not needed. And according to New York State law, if a referendum is not required, we cannot legally hold one. If we want to talk about changing state law, then that’s a separate issue. But for now, it’s the framework we have to work with. We all still have plenty of influence on the issue through our elected council members and mayor.

Rising above politics and rhetoric

While considering this issue, Amsterdam residents should remember that politics are often at the heart of these types of controversial topics, and not necessarily what is best for the city. The firefighter’s union is in favor of the city ambulance service. GAVAC workers are not unionized. So predictably, the division on the issue falls along traditional party lines.

And hopefully, Amsterdam residents will also be wise to some very blatant false statements and fear-mongering on the issue emerging in the local newspaper’s editorial column.

In an editorial last June, the Amsterdam Recorder blatantly put words in Mayor Michael Villa’s mouth when they wrote “Villa himself publicly opposed the idea in a letter to the editor published in the April 11, 2015.”

Except if you read the actual letter he wrote, he never stated he opposed an ambulance service, he opposed the manner in which former mayor Ann Thane was pressing the issue, by balancing her proposed budget on projected revenues from such a service even through the council had not approved buying the necessary vehicles or changing the charter. Villa was campaigning against the mayor’s actions, not the ambulance issue itself, simple as that.

In August, Villa stated in regards to the issue, “Look at all the facts. If it’s viable and it shows a revenue stream and we can partner with GAVAC, then I’m open to looking at it and doing that.”

And that is a very pragmatic way of looking at it, and sets an example we should all try to follow.

In the paper’s latest editorial on the subject, published on October 20, the publisher/editors try to scare us with flimsy objections that have been debunked by facts from their very own reporters. But to top it off, the editorial speculates as to whether the city has proper liability insurance and warns “Instead of boosting revenue, it could bankrupt the city if it goes badly.”

This isn’t the first time the paper has tried to scare the Amsterdam community with the bankruptcy boogey-man. The fact is that the city already has medical liability insurance, which has always been required in order for the fire department to respond EMS calls as they have for years. I’ve said it before and I’ll say it again, the paper is not doing the community any service by this type of writing. Frankly, reading these editorials reminds me of why I started the Compass in the first place.

Taking the time to research fully

That isn’t to say that there aren’t valid concerns about the proposed service. But I appreciate the way that this year’s common council is proceeding slowly and cautiously with the idea, with the stated goal of including it in next year’s budget. I’m glad that the relationship between the mayor and council is infinitely better than what is was last year, so hopefully reasoned discussion will take place.

Alderman Chad Majewski has mentioned the possibility of getting an independent third-party consultant to look at the plan. I think that’s a good idea. There’s no magic crystal ball that’s going to predict exactly how much money the city will make on this, there’s always going to be some risk, but getting another perspective could be helpful. An outside consultant might confirm the numbers already presented by Chief Whitty, or it might bring up issues that no one’s thought of. Either way, more research can only help us, not hurt us. We have the time, so why not?

The only thing I ask is that people keep an open mind on the issue. Look at the facts of the matter, and press the mute button on the uninformed rhetoric. People who complain about their taxes on one day, shouldn’t outright reject a plausible way to reduce or at least stabilize their taxes the next day.

Each year, our city officials struggle with the challenge of maintaining essential city services while managing increasing costs and stagnant tax revenue. I believe the numbers presented by Chief Whitty are at least credible enough to indicate that we may have been leaving money on the table for years now by not fully utilizing our existing fire department. Let’s explore the idea fully, so we don’t make a hasty, uninformed decision, but rather a decision that is truly in the best interest of everyone in our city!

About Tim Becker

Tim Becker is the owner of AnthemWebsites.com LLC which publishes The Compass. He serves as both editor and a writer.

3 Responses to Can a city ambulance service rescue a struggling budget?

  1. Pam Swart says:

    Great article Tim

  2. Steve Collins says:

    Here’s an important point to consider…

    Medicaid re-imbursements are final. The provider can not bill the patient for the difference between the billing amount and the Medicaid paid amount. That means that the Medicaid payment is all the provider will receive for that ambulance run. An earlier article in your series mentioned a Medicaid payment of $450. I believe that amount has recently been reduced. Typical billing for paramedic level ambulance service runs around $1,000 in this area which means that the actual collectable amount for a Medicaid run would be well less than half of anticipated.

    Since the proposed service is for the City of Amsterdam only, it would be good to know the number of Medicaid paid ambulance runs for the past few years. The income figures were most likely calculated by simply multiplying the number of runs by the proposed full billing amount. That’s not a real number given the limited Medicaid payments.

    Did anyone take into consideration staffing? It takes two people to man an ambulance. Right now, AFD provides the paramedic while GAVAC provides their normal crew: a driver and a paramedic. If AFD has to also provide a driver for each run, how would that affect the staffing of AFD? Would that mean hiring more firefighters to maintain minimum staffing on the fire trucks? The argument that won’t hold water is that the ambulance staff can do both. Once the city runs its own ambulance service, the ambulances need to be available to respond 24/7. Except for the big fires and other large incidents, they should not be assigning ambulances and their staff to fire calls.

    I’m not saying don’t do it, I am strongly urging that everyone debate the issue using real numbers.

    • Tim Becker says:

      Thanks for the insights Steve. The issue of Medicaid reimbursements is something that is being factored in as far as I can tell. In the last article I wrote, I reported that according to Chief Whitty, when requesting estimates from the three billing companies, he asked them to use a 30% “payer mix” – meaning that 30% of the billable calls would be medicaid or medicare. So the recent estimates provided by three companies should account for the reduced reimbursements like what you are talking about. Now how accurate those estimates are is something that we might want to have a third-party consultant look at to confirm.

      http://mohawkvalleycompass.com/2016/11/fire-chief-reviews-ambulance-service-revenue-cost-and-estimates-with-council/

      With one ambulance, Whitty says there would be no additional staffing or hours. The two firefighters currently driving the rescue vehicle on EMS calls would drive an ambulance instead and transport. The plan seems to be to work alongside GAVAC for the first year, as one ambulance can’t handle all the calls. Exactly how many calls they can handle is something I’m questioning right now.

      Last year, the idea was to run two ambulances. Chief Whitty said that the union had informally agreed to allow firefighters to work additional hours at “straight pay” – no overtime to do this. So there would be additional staffing costs with two ambulances. But the plan for next year is to just run one alongside GAVAC.