Is the city ambulance service making a net profit? While the revenue numbers that have been released recently look promising, what about expenses? I was able to speak with Fire Chief Michael Whitty recently to get answers to those questions.
The biggest expected expense for the ambulance in the 2017-2018 fiscal year was the fees for medical billing services provided by MultiMed which are based on 10% of gross revenues. The projected revenue line for the service in the 2017-2018 budget was $350,000. The contractual expense line for the ambulance service was set at $35,000.
However, it appears that this expense line wasn’t enough to cover all the billing service fees as well as other expenses such as billing software and medical supplies*. So in April 2018, the Common Council passed a resolution which increased the contractual expense line by $20,102 to a total of $55,102 by transferring excess revenue from another line in the budget “non-resident penalties.”
According to Whity, the fiscal-year-to-date actual total expenses associated with the ambulance contractual line is $45,745.
The two biggest expenses from the line besides the MultiMed fees were $6,600 for medical supplies and a $6,700 license fee for the software used by the department to report medical claims to MultiMed.
Whitty pointed out that medical supplies are used not just for the ambulance, but distributed across four different vehicles.
In regards to fuel and maintenance, Whitty said there were no significant changes from last year, given that the department previously operated an emergency medical service vehicle which was taken out of service when the new ambulance was put into service.
In regards to labor, no additional staff were hired to run the ambulance, and according to Whitty, overtime costs have decreased since Mayor Michael Villa’s directive not to call in additional firefighters when staffing drops below six. The city’s previous ambulance provider, GAVAC, provides backup service when the city ambulance is not available.
The first lease payment for the ambulance vehicle is not due until next fiscal year.
So based on the revenues and expenses reported for the 2017-2018 fiscal year so far, it appears that $45,745 in expenses against $284,849 in revenues gives us a “profit” of $239,104 so far.
The fiscal year is not complete yet, and the revenue figure does not factor in June’s deposits. Additionally, revenues for claims filed in the 2017-2018 fiscal year may be counted to the same fiscal year up to three months into the new fiscal year which begins in July. So while the revenue figure is still just short of the $350,000 amount projected in the budget, it seems likely to me that once the books are closed, we will either meet or exceed that amount.
The only other relevant issue that I think is fair to consider when comparing this fiscal year to last, is the fact that we are no longer receiving approximately $100,000 in revenue sharing from GAVAC, the city’s previous provider. That revenue was taken out of the 2017-2018 budget.
What about next year?
Whitty said the expenses for the service are expected to rise due to several factors. First, the city must start paying a $54,700 per year lease payment on the ambulance vehicle. Secondly, Whitty said that renewing the city’s certificate of need, a document issued by New York State which is necessary to operate the service, will be much more difficult to renew than it was to apply for in the first place and will require additional specialized legal expertise. Thirdly, he said that the department’s medical director, a doctor in the area who has been on-call to give medical advice on EMS calls, has been doing the work on a volunteer basis for years. Whitty said he is now in the process of negotiating a stipend to compensate the doctor.
The 2018-2019 budget projects the same $350,000 in revenue as 2017-2018. However, earlier in the month, Whitty made a rough estimate of $442,452 in projected revenues based on average calls during the year. For expenses, the new budget contains a $54,700 line for the vehicle lease, a separate $35,000 line for medical billing fees, and contractual line of $41,670. So the total budgeted “profit” is $218,630 but could possibly exceed that if the chief’s estimate is correct.
* Originally, I had reported that the initial $35,000 contractual line was set to cover the 10% billing fee that would be due based on the projected $350,000 in revenue, and did not include enough for billing software and medical supplies. However, Chief Whitty said today that the initial $35,000 was intended to cover medical supplies and billing software, and that not enough was budgeted for billing fees. The article has been updated to reflect his account.