Providing ambulance service a no-brainer

This editorial appeared in the Derry News on May 16, 2007

To The editor:

There have been recent articles in the newspapers over the ambulance contracts Derry has with Chester and Auburn. Councilor Coyle apparently has three issues:

1. he feels that Derry is not charging enough for ambulance service to Chester and Auburn;

2. he is concerned that an ambulance could be in one of these towns when a Derry resident needs the ambulance; and

3. ambulance contracts should at least be brought before the Town Council.

So let's look at whether Derry charges enough. The net appropriation for town services in Chester is about $2.5 million. Councilor Coyle wants Chester to pay $500,000.

This means 17 percent of its town services budget would be for ambulance service. Are there other towns that pay as much? Yes. Roxbury has a town services net budget of $11,800 and it pays $2,500 for ambulance service, or 21 percent of its town services net budget. Columbia has a town services net budget of $64,600 and pays $6,750 for ambulance service, or 10.5 percent of its town services net budget.

On average, towns contracting out for ambulance service pay 2.2% of their town services net budget for ambulance service. How do Auburn and Chester compare? They pay 4.6 percent and 1.9 percent, respectively. On this basis, one could argue that Chester should pay more, but not Auburn. However, basing the ambulance contract on the basis of the net operating budget is not really a good way to structure a contract.

A more fair way is to look at the cost per call. Chester and Auburn are both over $250 per call, while the average is about $190. On that basis, Derry would appear to charge a fair contract fee. If one looks at the cost per capita, the average is $11, with Chester and Auburn just below it at $10. On this basis, Derry would appear to not be charging enough.

Can the ambulance contracts be more equitable? Yes, there are two areas to be explored:

1. Derry provides ambulance service at a fair rate in return for billing the patient for transport. Therefore, Auburn and Chester should be asked to guarantee the billing fee. This means the next contract should have a clause that adds cost to the contract to cover people from the town that do not pay. For example, the total uncollectible from billing divided by the number of calls of the previous year is the additional cost to that town for the coming year.

2. The ambulance contract does not include personnel costs. One town tries to figure out what the number of hours its personnel spend on ambulance calls and then includes those costs in its ambulance budget. Derry could do the same thing.

According to the fire chief, the average medical call is 45 minutes, which is the time the ambulance leaves the station to the time it is available for the next call. If we assume that the cost of two personnel (including benefits) is $101 per hour, then the labor costs would add approximately $18,000 to the contract for each town. However, if Derry did not contract out its ambulance service, it would still have to pay the firefighters this money, so this concept would need to be carefully considered.

The second issue for Councilor Coyle is that an ambulance may not be available to a Derry resident while out on a call to Auburn and/or Chester. While this is a possibility, it can happen whether Derry contracts its ambulance service out or not. There is a mutual aid system in place such that any town can request an ambulance from another town. For example, Derry provides about 150 mutual aid ambulance calls per year for which it receives no compensation.

The last issue is that the ambulance contracts should be brought before the Town Council. Due to liability concerns, I feel any contracts with other towns should be reviewed by the Town Council.

Let's assume we charge $500,000, as Councilor Coyle has suggested. Auburn and Chester would no longer contract ambulance service from Derry. Derry receives about $100,000 in ambulance fees, plus $90,000 in ambulance contract monies. The town’s costs in providing ambulance service to these towns are roughly $12,000. This means that the town receives about $178,000 in revenue for these contracts. So what Councilor Coyle proposes would have the effect of raising our tax rate by almost 6 cents due to this loss in revenue.

To me, this is a no-brainer. Providing ambulance service to other towns reduces the cost of town services at little to no risk to Derry residents.

Bruce Kling

Derry