This document is also available as a downloadable PDF file.

This report was prepared by the staff of the Fire Department at the request of the Marion City Council. The intent of this report is to provide as much information as possible to assist the City Council in making a decision as to the manner in which the citizens of Marion will be provided ambulance service in the future. This report will attempt to discuss as many issues as possible. It must be understood that many of the issues below cannot be responded to in an objective manner until such time as a new Ambulance Authority is formed and they establish a formal financial and operational program. The City of Marion has three fundamental alternatives for ambulance service:

• Option #1 - Join the new governance system proposed by Area Ambulance
• Option #2 - Contract to the newly governed Area Ambulance System as a non-member
• Option #3 - Provide emergency ambulance transport with City of Marion resources

This report is intended to provide the City Council with information by which to make a reasoned decision on this important matter. This report is intended to be objective in nature and is not designed to directly promote or disqualify any of the options discussed.

Historical Perspective

For many years the Marion Fire Department (hereafter designated as “MFD”) has worked in conjunction with Area Ambulance Service (hereafter designated as “AAS”) of Cedar Rapids to provide top quality emergency medical service to the residents and visitors of the City of Marion and a good share of the Marion Township.  The MFD response district currently covers approximately 68 square miles and serves in the neighborhood of 34,000 permanent residents.

The cooperative tiered EMS response system initially was composed of basic first response by MFD that was followed by advance level transport by AAS.  (“Basic response” means that the responders can perform CPR, basic first aid, oxygen administration, baby delivery, simple airway insertion, spinal immobilization, and extremity splinting. “Advanced response” means that the responder can perform all of the basic functions plus IV insertion, cardiac monitoring, heart defibrillation/ cardioversion/pacing, drug administration, chest decompression, endotrachael intubation, insertion of the pertrach device (needle inserted in the neck to provide an alternative airway), and interosseous (in the bone) needle insertion.) Each agency had its unique characteristics that combined synergistically to form a very effective EMS system. MFD, with its close proximity to the patients, was able to be at the patient’s side in just a few minutes following the call for help. The Fire Department first response bridged the time gap from the time of the call for help until the ambulance arrived. Once on scene, the ambulance staff would provide advanced care and transport for the patient.

In the 1980’s MFD became a conditional paramedic level first response service. Since that time, those calling for EMS assistance have benefited from not only advanced level transport but advanced first response as well. In 2003, MFD became a full-time paramedic service with over 78% of its current full-time staff certified as a paramedic or paramedic specialist by the State of Iowa. There is no doubt that advanced first response and transport have directly benefited many citizens, and past citizen surveys and comments have overwhelmingly expressed satisfaction with the present system.

The City of Marion has never made any sort of financial contribution or paid a subsidy for ambulance service. Only those who have actually used the service pay for the ambulance program. AAS has reported for years that operating expenses have exceeded the income generated from user fees. Mercy Hospital has indicated that they have provided an annual subsidy ranging from $100,000 to $300,000 per year to keep the ambulance service going over the years. Beginning in 2002, the current Ambulance Board (composed of two Mercy representatives, two St. Lukes representatives, and one member at large), began to explore other options regarding ownership and governance of AAS. After many meetings and considerable time and effort, a plan emerged that would chart the course for AAS into the future. The plan centered on assembling a new Board of Directors made up of participating member jurisdictions and hospitals to control the assets and assume the liability of the new “Ambulance Authority”. The latest version of the 28E agreement is attached as Supportive Document #8. Key points in the agreement include:

• Marion would appoint two out of approximately fourteen members of the Board of Directors (The actual make-up of the board cannot be decided until all entities commit)
• Ambulance service to Marion would be provided at a level of service to be determined by the Board of Directors.
• Marion would make an effort to direct all of the City’s ambulance calls to the Ambulance Authority by updating its ambulance ordinance. A draft of the recommended ordinance is attached as supportive document # 9.
• Marion would be required to maintain membership for a period of a five-year initial term and rolling three-year term from that point forward unless a significant beach of contract brings about early termination.
• Marion would share in any of the surplus earned by or liability incurred by the Ambulance Authority. Any profit would likely not come back to the city but would probably be retained by the Ambulance Authority for future capital purchases or operating expenses.
• Mercy Hospital will continue to cover all required subsidies for the first three years of the agreement.

After extensive discussions regarding the pros, cons, and unknowns of the new Ambulance Authority, the method of providing future ambulance service to the city of Marion has been basically boiled down to the three previously mentioned options:

Option #1 - Join the new governance system proposed by Area Ambulance.
This option would result in Marion becoming a member and part owner in the new Ambulance Authority. Marion would appoint representatives to two seats on the Ambulance Board to enable it to have a voice in the operation and management of the ambulance service. Since Mercy Medical Center has indicated that they would cover any necessary subsidies during the first three years of the contract, there is no up-front or projected cost for those years. The only projected financial (and operational) impact to Marion in the first three years is the possible loss of the “Marion Ambulance Contract”. Per previous meetings with AAS, at least a minimal subsidy can be reasonably anticipated. However, the pro-forma financial projection provided by AAS shows a profit beginning in the fourth year of the contract. The agreement requires a five-year original commitment and contains a three year rolling clause for all years following the third. It also requires the City to update the ambulance ordinance to exclude small third-party providers in an effort to direct all ambulance business to AAS. Marion would share control of surplus or be held accountable for a portion of the losses experienced by the ambulance program. Performance standards have not been set, nor has the manner in which fiscal responsibility will be assigned been determined. These issues cannot be answered until the new Ambulance Authority Board is seated and establishes bylaws and a business plan. The Marion Fire Department would continue to provide paramedic level first response and would require no changes in personnel or equipment levels.

Option #2 - Contract with the newly governed Area Ambulance System as A non-member.
Per the past AAS Director, “there is no status quo option”. Electing not to join the new Ambulance Authority or to manage ambulance transports with City resources would require a formal contract for service. This contracting option would not result in Marion’s becoming a member of the Ambulance Authority Board and Marion would have no voice in the management of AAS. The City would have the opportunity to negotiate performance standards and any other desirable terms into the contract for service. A contract with AAS would require a multi-year commitment that includes either up-front or per-call subsidies to help to offset the risk being carried by the members of the Ambulance Authority. The current “Marion Ambulance Contract” will likely be significant discussion item during contract negotiations. Marion would not share any control of surplus nor be held accountable for any portion of losses experienced by the ambulance program. The Marion Fire Department would continue to provide paramedic level first response.

Option #3 - Provide emergency ambulance transport with City of Marion resources.
In this scenario, the Fire Department would provide emergency ambulance transport for all calls that originate in the City. There would be no formal membership or contracted relationship to the new Ambulance Authority. Both operations would function as separate entities but would be able to offer support to each other through existing mutual aid agreements. Marion will make all decisions pertaining to operations and finances and would assume all responsibility for any surplus or loss resulting from ambulance transport. This option would require the hiring of up to seven new employees, the purchase or lease of three ambulances, and a financial commitment to provide all of the associated supplies, equipment, and administrative needs of the program. Two variations of this option are presented in this report in order to depict different ways to manage the administrative requirements brought about by the additional oversight that this program requires. This option also relies on an outside agency taking responsibility for the non-emergent transports that originate in Marion for at least the first few years. We have had two (AAS being one of the two) agencies indicate their interest in providing non-emergent care should this option be chosen.

An Ambulance Study Committee consisting of firefighters, mid-grade and administrative officers was formed within MFD to produce this report in an effort to offer a wide range of experience and expertise to the study.  A listing of the Committee members can be found at the end of this report.

Discussion of Issues:

The following pages identify issues that the committee recommends be considered by the City Council in making the decision regarding the future of ambulance service in Marion. Each issue is detailed through the listing of historically-based points followed by assumed and unknown impacts. Any item that is supported by attached documentation will be identified by a footnote.

• Option #1- Join governance
• Option #2 – Contract for service
• Option #3 – MFD provides service

Issue 1 - Patient care

Background information

• Each agency is currently functioning at an EMT-P certified level.
• Each agency currently provides twenty-four hour, seven day a week coverage.
• AAS has been providing ambulance transport for the area since 1971.
• The current EMS program requires a transfer of the patient from one service to another.
• AAS currently staffs 5 units during the day and three units at night that are responsible for the entire metro area. At least one unit is typically posted on the western edge of Marion and AAS has indicated that they are considering a permanent post in Marion.
• AAS currently stations a reserve ambulance at Station #2 that is operated and staffed by MFD personnel in those instances where AAS does not have a unit available. The contract requires MFD to staff, house, and provide daily maintenance in return for a base fee of $35,000 and reimbursement of the actual cost of two MFD staff per transport.[1]
• City of Marion currently has no financial gain/loss resulting from ambulance service. (This does not take into account the current City of Marion contract with AAS)
• Future service will continue to be managed as a not-for-profit program.

Future Assumptions

Option 1 - The Governance Board will set a minimum response time goal of 90% in 8 minutes 59 seconds in Marion.

Option 1,2 - The 28E agreement establishing the Ambulance Authority will recognize the importance and value of fire-based ALS level first response.

Option 1,2,3 - Patients will continue to receive professional care on a 24/7 basis.

Option 3 - MFD would dedicate 3 units exclusively to the Marion service area.

Option 3 - On average, transport vehicles will arrive at the patient more quickly. [2]

Option 3 - In a mass casualty situation when more than three units are needed or should all three MFD units be unavailable, the County-wide mutual aid agreement will be invoked. Member agencies include: AAS, Hiawatha, Palo, Center Point, North Linn Ambulance, Lisbon/Mt Vernon Ambulance.

Unknowns

Option 1,2 - Will the current practices regarding emergency EMS dispatching remain the same? [3]

Option 1,2,3 - Do the citizens of Marion have a preference as to which agency provides their EMS transport service?

Issue 2 - Financial Impacts – [4][5]

Background information

• AAS is currently supported by user fees and hospital subsidy.
• MFD is currently supported through the general fund property tax levy and does not charge user fees for EMS services.

Assumptions

Option 1 - If a financial loss is incurred, the financial obligation/subsidy will be allocated in a pre-determined, equitable basis as established by the Ambulance Board.

Option 1,2 - AAS pro-forma financial projections indicate that they anticipate breaking even by the fourth year of operation of the new governance system.

Option 1,2,3 - Future service will continue to be managed as a not-for-profit program.

Option 1,3 - Marion citizens can reasonably anticipate a possible tax subsidy on top of user fees.

Option 2 - The City will be required to pay an annual contract fee for ambulance services for a multi-year period.

Option 3 - The added MFD staff would fulfill both the anticipated increase in response requirements brought about by ambulance transport and also provide an adequate number of on-duty personnel to staff a future third station at a minimal level.

Option 3 - If a financial gain is realized, no money will be directly returned to the Marion City Government but will be used to either enhance the service or reduce user costs.

Option 3 - The City of Marion assumes control/responsibility for all financial impacts.

Option 3 - If a financial loss is incurred, the loss will have to be covered by an increase in fees, property tax levy, payment from the general fund cash reserves or a combination of all three.

Option 3 - AAS will continue to provide ambulance coverage to the City during the transition period.

Option 3 - MFD will seek out and take advantage of purchasing co-ops to reduce cost wherever practical.Unknowns

Option 1 - How will the financial responsibilities be allocated between members?

Option 1,2 - Will the current MFD ambulance contract with AAS that provides a back-up ambulance response in Marion be continued?[6]

Option 2 - What will be the annual cost to contract for services?

Option 1,2,3 - What will be the actual financial impact to the City of Marion?

Option 1,2,3 - What impact will the new for profit ambulance company have on financial projections?

Issue 3 - Governance

Background information

• The City of Marion currently has full control over the community’s EMS first response program but no control over the AAS transport program.
• The current composition of the AAS Board is two from Mercy Hospital, two from St. Lukes Hospital and one at-large member.
• The anticipated makeup of the Ambulance Authority Board is to consist of 3 members appointed by Mercy, 3 members appointed by St. Lukes, 3 members appointed by Cedar Rapids, 2 members appointed by Marion, 2 members appointed by Linn County, and 1 member appointed by the small communities (combined).
• If any other organization elects not to participate in the governance program, their board positions will be dropped.
• The 28 E agreement concerning the governance concept requires a five year initial and three year rolling commitment.
• Joining the governance system at a future date will likely require an initial investment where there in no up front cost if joined today.

Assumptions

Option 1 - Under the current proposed make up of the Governance Board, the City of Marion will have more voting power than they typically have in regional boards (e.g.: Regional Planning, C.R. Linn County Solid Waste Agency, Emergency Management Agency)[7]

Option 1 - Early termination of contract by a member is possible only if there is a contract breach or 2/3 of the Board votes to allow the entity out.

Option 2 - Control would likely remain much as it is today.

Option 3 - The City of Marion would have total control of all aspects of EMS services in the community.

Unknowns

Option 1 - Which jurisdictions will become members and join the Board?

Option 1 - Will an executive committee be formed within the Board?

Option 1 - What influence will the City of Marion’s votes really carry in the final Board makeup?

Option 1,2 - What operational and philosophical changes can be expected under the new governance program?

Option 2 - Which jurisdictions will contract for services and not join the Board?

Option 2,3 - If a jurisdiction is not a member of AAS, how much participation will they be allowed in Board meetings?

Issue 4 - Liability

Background information

• City of Marion currently has an ordinance requiring the licensing of ambulances and ambulance attendants.
• The draft governance contract indicates that in the event that the Ambulance Authority has insufficient resources to cover the costs of litigation, the two hospitals and Cedar Rapids would pay one-third of the liability each. [8]
• AAS is proposing that Marion’s current ambulance ordinance be changed to significantly increase standards for transporting agencies.[9]

Assumptions

Option 1 - The City Attorney has identified that an ordinance change is a viable option to an exclusivity clause that was a point of contention in the original governance agreement.

Option 1,2,3 - Marion’s current ambulance ordinance will require changes.

Option 1,3 - Marion’s involvement in providing ambulance transportation increases liability exposure.

Unknowns

Option 1 - What is the impact of the Federal Fair Labor Standards Act (FLSA) on MFD employees who work part time for AAS?[10]

Option 1,3 - Will any lawsuits be brought against the City of Marion by current or potential private ambulance service providers?

Issue 5 - Regionalization

Background information

• Marion’s EMS response program is currently integrated into the metro area EMS delivery system.
• The current system functions well.
• MFD currently tiers with three separate ambulance services as a first responder.
• The Iowa Legislature and Governor are strongly encouraging regionalization and/or multi-governmental sharing of services.

Assumptions

Option 1,2 - MFD pharmacy supplies will be provided by AAS.

Option 1,2,3 - Economy of scale savings can be anticipated.[11]

Option 3 - Will result in more transport units available to respond to emergencies in the region.

Option 3 - Will negatively impact the current AAS business plan.

Option 3 - Non-emergent transfers to and from care facilities will be conducted by another agency and paid for through the collection of user fees.

Option 3 - Pharmacy supplies will come from a private provider.

Unknowns

Option 1,2,3 - Can a regional system serve the citizens more efficiently than a local system

Option 3 - What are the impacts resulting from the fragmentation of the metropolitan ambulance transport service?

Issue 6 - Township

Background information

• Marion is currently contracted with the Marion Township to provide fire and non-transport EMS services.[12]
• The Marion Township is currently served by 3 different ambulance transport agencies.

Assumptions

Option 1,2,3 - Linn County will join or contract with the new Ambulance Authority.

Option 1,2,3 - Linn County will take responsibility for EMS coverage from the effected townships and establish contracts for service.[13]

Option 1,2,3 - The Marion Township will still want EMS services from MFD.

Option 3 - The Marion Township will be required to take on the responsibility of replacing Medic 2.

Unknowns

Option 1,2,3 - How will the current contract with the Marion Township be impacted?

Issue 7 - Billing

Background information

• AAS billings are currently managed by Mercy Medical Center.
• AAS currently nets approximately 52% of gross billings.
• Marion currently does no billing for EMS services.

Assumptions

Option 1,2 - AAS will outsource billing services.

Option 1,2 - AAS has applied a collection rate of 52% in their financial projection based on historical data for their agency.

Option 1,2,3 - Suburban collections rates typically average higher returns than urban collection rates.

Option 3 - Marion will outsource billing services.

Option 3 - A conservative collection rate will be set at 65% of gross billings.[14]

Unknowns

Option 1,2 - Will outsourcing AAS billing increase their collection rate?

Option 1,2,3 - Are the estimated collection rates accurate?

Option 1,2,3 - What is the future of Medicare and Medicaid reimbursement rates?

Option 1,2,3 - What is the future of health care providers (e.g. Wellmark) reimbursement rate?

Option 1,2,3 - How aggressive will collection activities be?

Issue 8 - Administrative time

Background information

• Marion’s EMS system is currently managed by a shift captain and administrative assistant chief.
• The current administrative staff and line officers can take on no more responsibilities without a significant impact to their ability to manage the organization.
• AAS currently has office administration and field supervisory staff in place.
• The City of Marion has a future goal of combining as many code enforcement divisions into one so that citizens can be expeditiously served in the most appropriate manner.
• Marion currently is not required to report to the State of Iowa since it is not a transporting agency and uses a report program that was developed in-house.
• Marion currently owns a software package that is capable of fulfilling State of Iowa transport reporting requirements.

Assumptions

Option 1,2 - The current MFD administrative needs will not change.

Option 1,2 - The current MFD EMS reporting system can be retained.

Option 3 - A new MFD administrative position will be warranted to manage the additional responsibilities anticipated if there are no changes in the organization’s current scope of responsibility.

Option 3 - The MFD EMS division Captain’s responsibilities will be redirected to another emphasis field if an administrative position is created.

Option 3 - If the responsibility for the management and implementation of the Housing Inspection Program is moved to another city department, an additional MFD administrative position would no longer be warranted but that department’s cost would rise.

Option 3 - Marion would be required to use the State approved software for EMS reporting.

Unknowns

Option 3 - How much time will the new EMS administrator be able to devote to training?

Option 3 - What is the financial and operational impact of moving the Housing Inspection Program to another city department?

Issue 9 - Facility capability

Background information

• The City of Marion currently has two strategically placed facilities for the placement of response units.
• AAS is successfully posting ambulances throughout the metro area based on anticipated need.
• AAS is considering the placement of an ambulance post in Marion.

Assumptions

Option 1,2,3 - AAS will continue to pursue new post locations based on anticipated needs.

Option 1,2,3 - Marion will need a third fire station in the not too distant future.

Option 3 - The City of Marion currently has adequate physical facilities.

Unknowns

Option 1,2,3 - What will be the impacts of fluctuations in requests for response?

Issue 10 - Future potential opportunities for growth

Assumptions

Option 3 - The decision-makers for the City of Marion would not allow contracted agreements to provide service outside of the community to reduce service in Marion.

Unknowns

Option 1,2 - Will AAS expand their territory at some point in the future?

Option 3 - Will other jurisdictions be interested in contracting with Marion for transport services?

Option 3 - Would Marion be interested in taking over non-emergent and/or long distance transports in the future?

Issue 11 - Public perception and employee acceptance

Background information

• The City of Marion citizen surveys have consistently indicated a high degree of satisfaction in the performance of the Marion Fire Department.
• The public expects a prompt, professional response to their requests for emergency medical services.
• A majority of MFD employees feel that Marion should have its own ambulance service.[15]

Assumptions

Option 1,2,3 - Public expectations will not decrease and will likely increase should the cost of services increase.[16]

Option 3 - MFD union employees may pursue additional compensation through contractual means.[17]

Unknowns

Option 1,2,3 - What is the opinion of the citizens of Marion with regard to which agency provides their ambulance transportation?

Option 1,2,3 - What is the public’s current level of knowledge regarding ambulance transport?

Option 3 - What is the likelihood of additional compensation for MFD union employees

Summary:

This report has attempted to communicate the multiple issues associated with three very different alternatives for the delivery of ambulance transport service in the community. It is unfortunate that the report must be laden with unknowns and assumptions and cannot directly answer many questions. The majority of the unanswered questions cannot be reasonably addressed until such time as a Board of Directors for the Ambulance Authority is seated, establishes organizational and operational goals and objectives, and publishes a quantifiable financial outlook for the organization. Likewise, without historical values produced by a fire-based emergency transport operation in the City of Marion, Iowa, it is impossible to make concrete predictions as to the full impacts of that option. The committee worked diligently to identify the major issues and comment to each. It is very likely that additional issues will present themselves as this process moves forward. We are confident in the fact that no matter which option is chosen in the end; the citizens of Marion will continue to receive the highest quality EMS service.

Thank you:

Thank you to the Fire Department Ambulance Study Committee members who were able to set aside their personal opinions and visions to work together as a synergistic group to produce a detailed and objective report. I am confident that the details provided within this report will act as an informational foundation for a very important City Council decision.

Chief Terry S. Jackson

Fire Department Ambulance Study Committee Members
Chief Terry Jackson
Assistant Chief John Madland
Captain Debra Krebill
Captain Doug Wyman
Firefighter/paramedic Jim O’Brien
Firefighter/paramedic Wade Markley
Firefighter/paramedic Jeremy Greene
Firefighter/paramedic David Gilchrist

[1] MFD ambulance was dispatched nineteen times in 2004.

[2] Based on 2004 MFD  and AAS response data as depicted in Supportive Document #1

[3] A discussion of this subject is attached as Supportive Document #2

[4] A five-year financial projection for AAS given option #1 is attached as Supportive Document #3

[5] Two five-year financial projections for MFD emergency transport given option #3 are attached as Supportive Documents #4 and #5.

[6] The pro forma financial statement attached as supportive document #3 indicates that the contract will continue at the current rate. The previous AAS director indicated that it would not continue on more than one occasion.

[7] Per City Manager Jeff Schott.

[8] Paragraph 32 (Indemnification) of the 28E. Supportive Document # 8.

[9] A copy of a proposed ordinance is attached as Supportive Document #9.

[10] Our attorney has expressed concern over the implications that FLSA have on MFD employees that work part time at AAS. The previous director indicated that this was not an issue for them and that those employees could simply be replaced.

[11] EMS purchasing co-ops are widely used throughout the State to reduce costs.

[12] This contract is available upon request.

[13] The State of Iowa “Home Rule” law allows the county to take over the responsibility of fire and/or EMS services from the Township Trustees by resolution.

[14] A survey of cities of our size that provide ambulance transport indicates an average collection rate of 74.4 %. This document is attached as Supportive Document #7.

[15] Per a survey conducted by the research committee. This document is attached as supporting document #6.

[16] AAS and MFD financial projections are both based on a 3% per year increase in fees.

[17] Per a survey conducted by the research committee. This document is attached as supporting document #6.

The following supplemental documents are also available:

• Response Times
• Dispatch Issues
• Ambulance Pro Forma Financial Statement
• Budget Summary Option 3a
• Budget Summary Option 3b
• MFD Ambulance Survey Results
• Comparison with Other Iowa Cities
• Ambulance Cooperation Agreement
• Alternative Uniform Ordinance