What Really Happened With The Proposed Sale of AMR

A friend and fellow blogger recently posted a blog where he lays the blame at the Trump Administration for the possible sale of AMR due to the possible repeal of the Affordable Care Act, AKA “ObamaCare.”  While it’s certainly trendy to blame President Trump, Republicans, and Russian hackers for everything (and I blame them for my breakfast tacos being fouled up), I offer a more reasoned analysis that lays the blame right back it should lay — at the feet of the management of Envision Healthcare, AMR’s current parent corporation.

In my opinion, Envision Healthcare and AMR engaged in two critical failures that continue to haunt EMS.

First, we in EMS like whatever is new and trendy.  If it’s on the cover of JEMS, a Facebook page, or mentioned by the right “EMS celebrity,” we jump right in.  Whatever is the newest trend, we embrace it and go all out with it. Envision/AMR jumped into community paramedicine and spent like drunken sailors on shore leave.  AMR spent significant cash on critical care classes for paramedics, partnerships with hospital networks and hiring a significant number of “celebrity” EMS physicians.  Yet nobody ever asked the simple question, “Where is the money to pay for community paramedicine coming from?”  Apparently, nobody found an answer to that.  In other words, EMS spends money like the stereotype someone who just got a tax refund check — they put new flashy rims on a car that barely runs.  In all honesty, there’s not even a commonly accepted definition of what constitutes community paramedicine – primarily because community paramedicine programs are designed to meet unmet needs in the local community.  In other words, the needs of one community aren’t going to be the same as the next town over.  And in keeping with the free market principles of the US economy, if there’s money to be made meeting a need, it’s likely that a business will expand to fill that need. The fact that nobody was in the community paramedicine market should’ve been a big, giant, huge hint — there’s not much money to be made in diverting repeat users of EMS.

Second, like I’ve mentioned before, EMS is ill-informed and poorly engaged in the political process.  From the get-go, there was no guarantee that the Affordable Care Act would provide a revenue stream for community paramedicine, much less EMS as a whole. Next, with a Republican takeover of both houses of Congress in 2010, primarily as a response to the enactment of the Affordable Care Act.  The fact that Congress controls the purse strings of the Federal government should’ve been a hint to Envision/AMR that the Affordable Care Act was in jeopardy.  Yet, aside from seeing pictures of “EMS On The Hill Day” where everyone dresses up in an EMS uniform where they do their best impersonation of Idi Amin, I rarely see EMS involved in the political or regulatory at the Federal level and virtually never at the state level.  Healthcare is one of the most regulated business fields out there and to fail to engage, especially effectively, in the political and regulatory process is professional malpractice, if not out-and-out incompetence.  Say what you want about a certain large private EMS company based in Louisiana, but those Cajuns have a government affairs team and in-house legal counsel — and those Cajuns were smart enough not to nibble on the “reinventing healthcare” bait that the Affordable Care Act dangled in front of private EMS.  They’re also profitable and return the investment to their employee owners.  Jokes aside, that’s pretty impressive in any business, much less the EMS business.

Blaming President Trump for the possible sale of AMR is like blaming the dealer at a craps table in Vegas for the bad gambling decisions you made.  In conclusion, Envision took a huge gamble based on a poor understanding of the business and regulatory environment that it plays in.  And sadly, Envision’s employees are possibly going to be the ones who have to pay for the loss.

 

Comments

  1. Robert Ball says:

    Interesting analysis, AC. For the most part I’d agree. I’d also posit that one of the big failings of EMS is a true lack of identity. Are we healthcare or public safety? If we are the former; we’d better start acting like it and learning to play in the same arena as the other healthcare providers and systems. If we’re the latter, we’d better learn local politics much better and realize that as a latecomer to the public safety party, we’ll be hind-teat to other public safety, public health, and public works organizations, and should get used to doing more with even less.

    Community paramedicine can be very beneficial, both to the community and to the healthcare system (where readmission costs can be saved). However, with rare exception (Minnesota’s Medicaid program pays for Community Paramedics…) there is no revenue stream. This means that in the current healthcare payer iteration the only organizations that should employ community paramedics are those who receive a financial benefit from them–the hospital systems. I’d also point out that many of the “frequent fliers” that EMS agencies try to use community Paramedics to manage and reduce transports have mental health issues…a subgroup of patient who historically is not swayed much by this intervention; so it actually costs more to “prevent” the unpreventable.

    Until we understand our identity and behave with that identity in mind; we’ll never get to where we want to be (whatever that may be).

  2. Alan Lambert says:

    Great post!

  3. Tom Cody says:

    Thank you for the article.

    We all know that EMS responders in rural areas spend a small amount of time on ambulance calls. Is there a way that the community paramedic can fill another useful civic chore while not seeing discharged patients or making ambulance responses? I’ve always thought that a dual or triple function paramedic was the key to attracting qualified people to areas of small population.

    I’ve seen some descriptions of some successful CP demonstrations. I’ve also seen a suggested curriculum.

    This is similar to the state of ambulance based paramedics in the early 1970s. At that time, a hospital administrator in Oklahoma told me with an air of great authority, “There will never be paramedics in this Oklahoma. That’s just on TV.”

    IMHO: communities should look for dual or triple roles to productively fill the community paramedics time and talent.

    Very best regards.

    Tom Cody, MS

    • Robert Ball says:

      Tom,

      In Minnesota, the Community Paramedic concept was originally intended for the rural areas. Essentially to give them a form of public health work between low volume of calls.

      I think it’s a good idea, but lack of a revenue stream has stalled it in those areas so far.

  4. The key is getting out of the fee for transport roll and have paramedicine and definetly Community Paramedicine in a practioner roll. Get fee for services that way bill out CP hours and time, something like a PA under a MD. I work in a CP program that is not beneficial to the ambulance company but we are to the city and tax payer based, this comes from taking transports away from the ambulance and saving FD time, manpower and reducing the tax payer liability.

  5. Skip Kirkwood says:

    Robert ball posted, “I’d also posit that one of the big failings of EMS is a true lack of identity” – the old public health or public safety thing.

    Doesn’t matter a bit. Is the Marine Corps soldiers who like boats or sailors who like guns? They spend not a minute on this discussion – they are Marines, they occupy their own niche, and they do what needs to be done. It is time for the EMS community to work in our niche and stop worrying about which team we are on. We are legitimate parts of BOTH worlds!

    • Robert Ball says:

      Sorry, Skip, poor analogy. Marines are combat troops, pure and simple. They are no different than any other frontline combat unit (except in their mind, perhaps).

      A better analogy is that if the Coast Guard. They operate in many of the same environments, and face similar hazards; but except in times of war, have a different mission, different funding and different reporting structure than the Navy.

      We have a different (albeit not much) mission than police & fire, we often have a different funding & reporting structure; but face similar hazards and environments.

      If we want to discuss payers doing something other than pay for ambulance rides, we would be wise to run in those healthcare circles.

      Fact is, we are healthcare providers that operate in the public safety environment. We should operate as such.

  6. George McGee says:

    While expenditures on community medicine seems like a easy target because it has no revenue stream, it likely has nothing to do with a sale. Community Medicine is a drop in the bucket investment in the hopes that the money will come if the program exists, but it wouldn’t be the reason for a company sale. It is more simply that the massive corporate model doesn’t work for EMS, at least to the massive profit and constant gains they are looking for. This has been the case for quite some time and the massive profitability of Envision’s physician staffing company only further highlights the severe limitations of EMS as a profit growth machine. The corporate structure has way too many layers of administrative cost that regional companies avoid and the revenue stream simply doesn’t have many opportunities to grow, given the mix of revenue coming significantly from fixed government payments (Medicare, Medicaid). Envision is also likely looking to continue the trend of maxing out profits for a sale or IPO, rinse and repeat. AMR simply doesn’t grow fast enough from a profit standpoint and is viewed as an anchor, especially when compared to EmCare. Community Medicine is a red herring.

  7. The sale of AMR is nothing new. How many times have they been bought and sold over the last 20 years at least 2 to 3 owners? Really, that many times and they still have the same problems as they did when I worked there in 1997. Poor management, not enough people, broken equipment and pay lip service to their contracts either 911 or private institutions and all the while the higher ups fresh out of business school have no clue how to run an ambulance service receive bonuses for piss poor work. I have worked in both the public and private arenas. Seen alot of trends, but the same problems only go by a different name. Now, CP talk has been around for years and I personally dont think its a trend. Let the local companies or FD get into it because they know the local population. What works in Minnesota, might not work in Michigan or Florida. Some of these states prefer nurses to do followup visitations and those companies get paid for it. Next is the funding issue, the money is gone, its been spent by both parties for frivolous crap. I could go on and it would be just another debate about healthcare financing. But paramedics can be utilized in so many ways from primary care to hospital care not just transporting from floor to floor but in more technical ways. Even the trauma junkie will get tired of the bad paycheck and look at other areas where his or her skill can be applied. Not all paramedics want to be nurse or PA’s or Dr’s. Thats my 2 cents, I appreciate some change back…

    • Agreed!! Doomed to repeat the failures of the past from what I see. I’ve been around a while and I can talk with management about those times, but often looked at like I don’t have clue. Funny thing is most of them were not around. Clouded by the kool-aid they drink!

  8. Good article….I think it applies to healthcare in general… hospitals ballooned like crazy at the thought of everyone with insurance…now everyone is awakening to the reality that no more actual health care dollars were appropriated…..just a lot more people to be covered with what’s there…
    Community Paramedicine may work in rural areas with low call volume but is doomed in areas with high run volume……down time ? What is that ?

  9. So my question is why are we rushing in to MIH/CP? and even more, who will pay for it? The biggest complaint of EMS providers is a lack of wage and recognition, but it seems like most arguments for this expanded practice are to have a more cost-effective health system. If we are striving, as a profession, to be a ‘deal’ over home health, we are trying to put out the fire with gasoline. Home health nurses are by no means well compensated in our industry and those patients generally have insurance. Considering most Medicaid programs reimburse less than 9 cents on the dollar, this is not a winning venture for us. Secondary to all of this, we are a million miles away from any legislation that will actually pay for MIH/CP within CMS programs. Those who are receiving funds currently are on some form of grant or pilot program without guaranteed funding in the future. Ambulance transport makes up less than 1% (0.87%) of the CMS budget and neither the PPACA nor the AHRA feign interest in addressing this problem.

    The AAA (and the Louisiana company referenced by the author) threw out H.R. 745 during the last session that would flip EMS to provider status, but beyond the bill sponsors, there was little interest.

    My belief: AMR is up for sale because according to EVHC Q3 financials, 35% of their current revenue is transport based. With the share for share merger with AmSurg, less than 20% (not exactly half because they are inheriting significant debt) of their revenue will be from EMS. With new board members with a different background, it is easy to see why their board is afraid of the business segment with the highest liability. Makes sense that they want to divest…

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