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Mendo’s Sudden Ambulance Privatization-Consolidation

Mendocino County began planning to establish an Exclusive Operating Area (EOA) for inland ambulance services back in 2013. More than five years later, after several false starts, state reviews, organizational wrangling, and busted deadlines, the long delayed Request for Proposals (RFP) for the EOA was finally issued last week.

The entire RFP process was carried out in secret by the Sonoma County-based emergency services administrative outfit, Coastal Valleys Emergency Medical Services (CVEMS), on the alleged grounds that allowing the public to participate in the process in any way could give an advantage to a potential bidder.

When the RFP was released last week it prompted questions and complaints as local emergency response organizations started to delve into the RFP’s 142 pages of fine print. 

The first gripe we heard from any local official was when Anderson Valley Community Services District Board member Larry Mailliard saw the very aggressive proposal schedule — deadline for questions March 8, proposers conference March 15, final deadline for RFP questions March 22, letters of intent April 8, and proposals due by May 28. Mailliard remarked that the County took years to prepare it without any apparent sense of urgency, and now all of a sudden they want everyone to rush to get their proposals together?

Other complaints we've heard so far based on very preliminary reviews are related to some of the odd provisions in the RFP:

"Successful proposer shall reimburse the county for the cost of ambulance dispatch." 

What? Why? How?

"Proposers are encouraged to establish agreements to utilize [existing ambulance providers] in conjunction with an ALS provider from the contractor whether staffed on the ambulance or as a quick response vehicle to ensure ALS level of care is available on all calls within the EOA when it is needed." 

Does this mean that the Anderson Valley Ambulance will be be required to hire paramedics? How will that be reimbursed?

"The county does not guarantee any number of responses or transports." 

Why do they have to point this out?

"Contractor shall respond to hazardous materials incidents, working fires, and law enforcement standbys upon request by any public safety agency or dispatch center within the EOA at no charge." 

Standby at incidents and crime scenes for no cost? Won’t this 1) raise the cost, and 2) take a unit out of service for who knows how long?

"Each period in which the contractor fails to meet the 90% [response time standards] within any compliance zone the contractor shall pay to the LEMSA [i.e., Coastal Valleys EMS] a $250 financial liquidated damage for each one 10th of a percentage point by which the contract performance falls short of the 90% standard. Each period in which the contractor fails to meet the applicable response time requirements the LEMSA will review the contractor’s SSP [?], unit hour of production capacities and/or other factors to determine the causes of noncompliance." 

This appears to be very subjective and could lead to some gamesmanship in not only how response times are recorded, but who’s responsible for delays and how they will be recorded.

"All areas have a maximum response time. Every call where the ambulance fails to arrive within the maximum specified time is an outlier call. The liquidated damages for each outlier is $500 per occurrence." Same question.

In addition, the data in the RFP describing current arrangements responses and service arrangements is dated and has very little information after 2016, as if the RFP was developed a couple of years ago and they have been sitting on it since then. The "key contacts" list identifies Alan Green as manager of the Anderson Valley Ambulance, but almost two years ago the non-profit Anderson Valley Ambulance Service was merged into the Anderson Valley Community Services District and is being operated by the Anderson Valley Fire Department.

Despite these problems and the seemingly over-optimistic proposal schedule, there are three private ambulance service companies likely to submit bids: Ukiah-based MedSTAR, Falck (the giant Dutch international company with a local operation which recently pulled out of Covelo for financial reasons and which repositioned some of their units to Rohnert Park creating a service gap that local ambulances had to backfille), and AMR, American Medical Response, a large emergency services outfit based in Colorado, with a major operation in Sonoma County.

In theory, by consolidating all of the ambulance calls in the Highway 101 corridor, including the lucrative "interfacility transfers" (from hospital to hospital, usually not emergencies), the winning contractor would have substantial revenue to so that, with whatever the County is going to pay the low bidder, they can provide "Advanced Life Support" (i.e., paramedics) on every call that calls for a paramedic.

It's not clear how the winning contractor would be paid either. Presumably the winning contractor will not be limited to reimbursements for individual transports under the current paltry payment schemes from the uninsured, Medical, MediCare and a few private insurance payers. We don’t see how they could provide expanded ALS service — estimated to cost at least $500,000 per ambulance, without a substantial contract/cost from the County. At present the County of Mendocino is supplementing existing ambulance services to the tune of about of almost $200,000 a year for "the ALS Grant." How much is the County budget prepared to chip in or subsidize the ambulance services?

One of the top evaluation criteria in the RFP is "integration with existing EMS providers." 

Accordingly, "Due to the number of established ambulance providers within the EOA, the County encourages partnerships to provide a cost-effective service with optimal response times and integration with existing EMS providers.” Besides the existing ambulance services (including the Anderson Valley volunteer service), existing EMS providers also includes community health centers.

"In the communities of Boonville, Laytonville, and Covelo, there are health centers providing primary and urgent care. Proposers are encouraged to discuss joint staffing models to optimize and subsidize the paramedic resource when not responding and transporting patients."

“…encouraged to discuss”? How are such complicated arrangements — balancing call billing revenue, calls and/or staff covered by other agencies, the County funding from the contract, possible deductions if response time averages are not met, cost salary increases over the cost of living, etc. — supposed to be ironed out in time to incorporate them into a bid under the short proposal schedule?

Given that whoever gets the contract will be a private for-profit company, there will be an incentive to shift as much work to outside agencies as possible. For example, in Anderson Valley the contractor, arriving later from Ukiah, could let the AV volunteers do the first response with the patients, then just act as a glorified taxi service over the hill, saving time and cost.

Based on comments at last Wednesday night’s Community Services District board meeting after a very early review of the RFP package, the fire chief and the CSD board expect the Board of Supervisors to do more than just "encourage" the winning contractor to "discuss" arrangements with the local service providers. They expect the Supervisors to not only ensure that the existing (mostly volunteer) Anderson Valley EMS operation is sustained and improved, but that it retains the autonomy that it currently has including its staffing, revenue, and rate setting. And not turn the local ambulance into a subsidiary of a private company.

Whether any of the potential bidders are capable of figuring out the delicate balancing act required by this comprehensive new RFP, remains a very open question.

For the short term, it will be very interesting to see not only how the potential bidders react to the RFP via their questions (and the answers), but whether the existing inland area ambulance providers can work or will with it. 

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