Alternative EMS Deployment Options€¦ · MFD EMS provides care and transport for serious medical...

Alternative EMS Deployment Options

Prepared for the City of Milwaukee Budget and Management Division

By

Jessica Gartner Teague Harvey

Shaun Hernandez Jason Kramer Alex Marach Jason Myatt

Workshop in Public Affairs Spring 2012

©2012 Board of Regents of the University of Wisconsin System All rights reserved.

For additional copies: Publications Office

La Follette School of Public Affairs 1225 Observatory Drive, Madison, WI 53706

www.lafollette.wisc.edu/publications/workshops.html [email protected]

The Robert M. La Follette School of Public Affairs is a teaching and research department of the University of Wisconsin–Madison.

The school takes no stand on policy issues; opinions expressed in these pages reflect the views of the authors.

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Table of Contents List of Tables .......................................................................................................... v List of Figures ......................................................................................................... v Foreword ............................................................................................................... vii Acknowledgments.................................................................................................. ix Executive Summary ............................................................................................... xi Introduction ............................................................................................................. 1 Statement of Problem .............................................................................................. 1 Overview of EMS Dispatch in the City of Milwaukee ........................................... 1

Triaging calls ...................................................................................................... 3 Calls identified as BLS-Private ....................................................................... 4 Calls identified as ALS ................................................................................... 4 Calls classified as BLS-MFD .......................................................................... 5 Equipment ....................................................................................................... 6

Policy Goals ............................................................................................................ 6 Maximize net fiscal effect ................................................................................... 6 Maintain quality of service ................................................................................. 6 Ease of implementation....................................................................................... 7 Public perception of EMS response .................................................................... 7

Data Analysis Methods ........................................................................................... 7 Demand for EMS service and MFD’s EMS capacity ........................................... 10

Response times.................................................................................................. 10 Number of incidents requiring EMS response in the City of Milwaukee......... 12 Capacity calculations ........................................................................................ 12

Policy Options and Analysis ................................................................................. 14 Option 1: Dispatch fee ...................................................................................... 15

Minimize costs and maximize revenue ......................................................... 15 Quality of service .......................................................................................... 16 Implementation ............................................................................................. 16 Public perception .......................................................................................... 17

Option 2: Transport ALS-Downgrade calls without adding med units ............ 17 Minimize costs and maximize revenue ......................................................... 18 Quality of service .......................................................................................... 19

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Implementation ............................................................................................. 19 Public perception .......................................................................................... 19

Option 3: Transport additional BLS-MFD calls ............................................... 19 Minimize costs and maximize revenue ......................................................... 20 Quality of service .......................................................................................... 21 Implementation ............................................................................................. 21 Public perception .......................................................................................... 21

Option 4: Transport all of the BLS-MFD and ALS-Downgrade calls .............. 21 Minimize costs and maximize revenue ......................................................... 22 Quality of service .......................................................................................... 23 Implementation ............................................................................................. 23 Public perception .......................................................................................... 23

Individual med unit analysis ............................................................................. 23 Summary and Recommendations ......................................................................... 24

Recommendations ............................................................................................. 26 Further considerations ....................................................................................... 27

Call to Transport Ratio and Capacity Efficiency Issues ............................... 27 Performance Measurement System and Benchmarking for EMS Operations....................................................................................................................... 28

Appendix A. Milwaukee Ordinance Covering EMS Services and Rates ............. 30 Appendix B: Overview of Data Capture Process ................................................. 39 Appendix C. Calculation of Med Unit In-Service Times ..................................... 40 Appendix D. Federal Anti-Kickback Statute Case ............................................... 41 Appendix E. Average Per-Patient Revenue .......................................................... 43 Appendix F. Yearly Amortized Cost of MFD Med Unit ...................................... 44 References ............................................................................................................. 45

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List of Tables Table 1. Equipment and personnel sent to different call types ................................6 Table 2. Cleaned dispatch data example ..................................................................8 Table 3. Option 2 estimated time and transport capacity .......................................18 Table 4. Option 3 estimated time, call, and transport capacity ..............................20 Table 5. Option 4 estimated time and capacity required to handle ALS-Downgrades and all of the BLS-MFD calls and transports ...................................22 Table 6. Individual med unit analysis ....................................................................24 Table 7. Summary of all of the options’ revenues, costs, and net revenues ..........25

List of Figures Figure 1. Process for dispatching EMS responders .................................................3 Figure 2. Average MFD EMS response time throughout the dispatch process .....11 Figure 3. Annual med unit calls .............................................................................13

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Foreword This report is the result of collaboration between the Robert M. La Follette School of Public Affairs at the University of Wisconsin–Madison, and the Budget and Management Division of the City of Milwaukee’s Department of Administration. Our objective is to provide graduate students at La Follette the opportunity to improve their policy analysis skills while contributing to the capacity of the city government to provide public services to the residents of Milwaukee.

The La Follette School offers a two-year graduate program leading to a master’s degree in public affairs. Students study policy analysis and public management, and they can choose to pursue a concentration in a policy focus area. They spend the first year and a half of the program taking courses in which they develop the expertise needed to analyze public policies.

The authors of this report are all in their last semester of their degree program and are enrolled in Public Affairs 869 Workshop in Public Affairs. Although acquiring a set of policy analysis skills is important, there is no substitute for doing policy analysis as a means of learning policy analysis. Public Affairs 869 gives graduate students that opportunity.

This year the students in the workshop were divided into six teams, three under my supervision and three supervised by my La Follette School colleague Professor Karen Holden. The Milwaukee-related research topics were solicited from various city government departments by Eric Pearson, Budget and Policy Manager in the Division of Budget and Management. The six authors of this report were given the assignment of exploring ways to increase city revenues and increase efficiencies associated with the delivery of emergency medical services (EMS) by the Milwaukee Fire Department.

In Milwaukee, the job of providing EMS and of transporting individuals to hospitals is shared by the Milwaukee Fire Department (MFD) and four private ambulance companies. Under current practice, the MFD dispatches all of the EMS calls but does not charge the private ambulance companies for these dispatching services. The MFD also provides medical services to many individuals who are then transported to hospitals by private ambulances. Reimbursement for these services goes entirely to the private companies. This report uses data from dispatching records and other sources to estimate additional revenues from charging the private ambulance companies for the dispatch services and from transporting a larger share of individuals for whom the MFD provides emergency medical services.

This report would not have been possible without the support and encouragement of city Budget Director Mark Nicolini and project coordinator Eric Pearson. A number of other people throughout city government contributed to the success of the report. Their names are listed in the acknowledgments section of the report.

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The report also benefited greatly from the support of the staff of the La Follette School. Cindy Manthe and Marjorie Matthews contributed logistic support, and Karen Faster, the La Follette Publications Director, managed production of the final bound document.

By involving La Follette students in the tough issues confronting city government in Milwaukee, I hope they not only have learned a great deal about doing policy analysis but have gained an appreciation of the complexities and challenges facing city governments in Wisconsin and elsewhere. I also hope that this report will contribute to decisions about the operation of EMS within the Milwaukee Fire Department.

Andrew Reschovsky

Professor of Public Affairs May 2012

Madison, Wisconsin

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Acknowledgments We would like to express our gratitude to those who provided assistance throughout the creation of this research report. For their patience, guidance, and expertise, we thank the staff of the City of Milwaukee Department of Administration. Particularly, we are grateful to Jennifer Meyer, Senior Fiscal and Policy Analyst, and Eric Pearson, Budget and Policy Manager, within the Budget and Management Division as they informed and guided our approach toward this policy analysis. We also thank the Milwaukee Fire Department for their knowledge and assistance in data collection, especially Captain John Pederson, Emergency Medical Services Battalion Chief Sean Slowey, and Chief Mark Rohlfing. Finally, we thank the faculty and staff of the Robert M. La Follette School of Public Affairs, especially Karen Faster, Publications Director at the La Follette School, and Professor Andrew Reschovsky for their invaluable feedback and guidance throughout this process.

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Executive Summary The City of Milwaukee provides emergency medical services (EMS) through the Milwaukee Fire Department (MFD) EMS division and four privately owned ambulance companies. The MFD dispatch center receives all 911 calls and dispatches the appropriate public or private emergency responder. The private providers do not pay for the dispatch services provided by MFD.

MFD EMS provides care and transport for serious medical emergencies, called Advanced Life Support (ALS). The private providers respond and provide transport to non-serious medical calls, called Basic Life Support (BLS). If it is not clear at the time of dispatch whether a call is ALS or BLS, it is referred to as a BLS-MFD call. Both the MFD and private providers respond to BLS-MFD calls, and first responders determine if the patient needs an ALS or BLS level of care. The level of care needed determines whether public or private ambulance transport to the hospital, if necessary, is provided. There are other instances in which a call has been misclassified as ALS and is “downgraded” to BLS, and private ambulances are called in to provide transport. Whichever entity provides transport to the hospital is able to bill for providing all care.

We analyze EMS services to find innovative ways to compensate for revenue shortfalls and recoup the costs of providing dispatch and transport services while maintaining the quality of EMS services provided. We identify four options:

1. MFD charges a dispatch fee to private providers.

2. MFD transports all of the calls downgraded from ALS to BLS.

3. MFD transports ALS-Downgrades and some BLS-MFD calls, without adding personnel or equipment.

4. MFD transports all of the BLS-MFD and ALS calls. This option would require adding personnel and equipment.

Based on the opportunity for revenue generation, cost recovery, and current excess equipment and staff capacity, we recommend MFD charge a dispatch fee to private providers, as well as transport all of the ALS-Downgrades and some BLS-MFD calls to the extent current MFD EMS capacity allows. We estimate this will result in between $3.7 million and $5.2 million in additional net revenue per year.

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Introduction The City of Milwaukee faces a fiscal environment in which intergovernmental revenue is likely to be flat or declining in the near term. The State of Wisconsin’s 2011–2013 biennial budget resulted in a 4.5 percent decrease in intergovernmental revenue for the City of Milwaukee in the 2012 budget and also imposed a property tax levy freeze on municipalities. The tax levy and intergovernmental revenue are the city’s primary revenue sources. The aid reduction and tax levy freeze create a fiscal environment in which the city must continually search for ways to enhance the efficacy of service delivery and explore additional sources of revenue.

Currently, Emergency Medical Service (EMS) care in the City of Milwaukee is provided through a public–private partnership. The Milwaukee Fire Department (MFD) responds to more serious emergency calls, while four privately owned ambulance services respond to calls involving non-life threatening situations. The MFD and the City of Milwaukee Budget and Management Division have identified the public–private partnership for the provision of emergency services as a potential source of revenue gains and/or cost reductions.

We will analyze the city’s partnership with the private ambulance companies and explore options for increasing EMS revenues and/or reducing EMS costs while prioritizing high-quality care and efficient service delivery.

Statement of Problem The City of Milwaukee’s fiscal situation requires action to improve revenue generation and reduce the cost of providing essential services. MFD is funded partially by revenues from billing for services provided, as well as City of Milwaukee funds. MFD does not bill for some of the services it provides to both the general population and private ambulance businesses. The two most notable instances of these unbilled services are providing dispatch services to private ambulances, and medical services to people who are not taken to a hospital by MFD. Not billing for these services represents an area of significant potential revenue for MFD and the City of Milwaukee.

Overview of EMS Dispatch in the City of Milwaukee Established in 1875, the Milwaukee Fire Department protects citizens by mitigating fire hazards and providing EMS care. Led by Chief Mark Rohlfing, MFD is composed of five bureaus: the Bureau of Administration, Bureau of Construction and Maintenance, Bureau of Instruction and Training, Bureau of Special Operations, and the Firefighting Division(City of Milwaukee Fire Department n.d.a). The EMS Division is housed within the Firefighting Division, and Dispatch is handled by the Bureau of Technical Services, which is housed within the Bureau

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of Administration. The MFD employs approximately 1,000 firefighters. Of those, more than 700 are licensed Emergency Medical Technician-Basics and 140 are EMT-Paramedics (referred to as EMTs and paramedics, respectively) (City of Milwaukee Fire Department n.d.b). EMTs and paramedics are both licensed medical professionals, although paramedics require more training and are able to provide more advanced life support services in emergency situations.

The EMS Division, led by Battalion Chief Sean Slowey, is responsible for providing emergency care and services, as well as administration of EMT and paramedic training and licensing. EMS care constitutes approximately 80 percent of emergency responses by MFD, as well as 95 percent of all of the calls taken through the Milwaukee Fire Equipment Dispatchers. To provide EMS services, MFD uses a variety of equipment for responding to resident calls, including equipment from 37 engine companies and 12 Mobile Emergency Department ambulances (“med units”) (City of Milwaukee Fire Department n.d.b).

Currently, the responsibility for EMS care and transport is divided between MFD and four privately licensed ambulance providers: Bell, Curtis, MedaCare, and Paratech. Based on a written and signed agreement with the City of Milwaukee, these four private companies divide their jurisdictions of responsibility into four areas of the city. The Ambulance Service Board determines the service area boundaries and advises the Common Council’s Public Safety Committee. Under § 75-15-13 of the Milwaukee Codes of Ordinances, the board creates operational handbooks and establishes regulations and safety practices for all of the emergency ambulance providers. Eight members comprise the board, representing: the Public Safety Committee, the Department of Health, the Office of Emergency Management and Homeland Security, Emergency Services, the Milwaukee County Emergency Medical Services Committee, the hospital system, and the public (City of Milwaukee Legislative Research Center n.d.).

While the agreement allows for changing the boundaries of the private companies’ jurisdictions of responsibility, they have not been changed recently and are expected to remain unchanged for the duration of the agreement (Slowey 2012), which runs through 20171 (City of Milwaukee 2008). The private providers provide EMS care and transport in non-life threatening situations and employ EMTs.

MFD provides dispatch services to the private ambulance providers at no charge. MFD receives the emergency calls, determines the address and location of the call, and assesses the severity of the issue. Calls to be handled by private providers are dispatched to the assigned private provider for the call’s location. The vast majority of calls – approximately 87 percent – will eventually be handled and transported by a private provider, but private providers do not cover any of the costs of the MFD dispatch services they use.

1 The City of Milwaukee has the right to terminate the agreement on Dec. 31, 2012, with 120 days notice.

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Triaging calls Emergency calls to 911 go through the Milwaukee Fire Equipment Dispatch, where dispatchers use the Priority Dispatch system to determine the appropriate level of EMS response based on the caller’s answers to an established series of questions. Wisconsin administrative code defines two types of medical service: Basic Life Support (Wis. Admin. Code ch. DHS 110) and Advanced Life Support (Wis. Admin. Code ch. DHS 112). ALS calls are more severe in nature and treatment must be provided by paramedics; EMTs are able to handle BLS calls.

Dispatchers divide all of the emergency calls into one of three categories, each requiring a different type of response. Basic Life Support (BLS) calls characterized as non-serious Basic Life Support (BLS-Private) are dispatched to one of the private ambulance companies; they are designated as first responders. More serious Basic Life Support (BLS-MFD) and Advanced Life Support (ALS) calls are dispatched to the MFD for first response. The sequence for “triaging” calls, the process by which the dispatcher determines the appropriate EMS provider based upon the answers provided in the 911 call, and responding to calls is illustrated in Figure 1.

Figure 1. Process for dispatching EMS responders

Source: Authors, based on information from MFD Dispatch

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Each type of call results in the deployment of personnel and equipment designated to handle the type of situation. The agency that transports the patient, either public or private, is the entity that is reimbursed for all of the services provided, regardless of which entity provided the service. A Milwaukee ordinance establishes the amount that all “certified providers” – including both city-employed and private ambulance companies – can bill for services rendered (Milwaukee Code of Ordinances 75-15). All certified providers must “... provide the most economical service in accordance with accepted medical practice” (MCO 75-15(12)(a)). In addition, city ordinance sets rate limits for private providers for transport services based on acuity level and ancillary equipment used during a call (MCO 75-15(14-15)). See Appendix A for more information on the ordinance. MFD policy is to only bill patients for services provided if it transports the patient. The policy assures that patients do not receive two bills for what they see as a single incident. Additionally, Medicare, Medicaid, and some private insurance companies will only reimburse the entity that provided transport (Slowey 2012).

Calls identified as BLS-Private If a dispatcher determines a 911 call requires non-serious medical life support, the dispatcher assigns the call to the appropriate private ambulance company. Wisconsin state statute 256.15 defines basic life support as treatment an EMT is licensed to administer, including first aid, breathing assistance, and support of oxygenation and circulation (Wis. Admin. Code ch. DHS 110, Binaski 2010).

Personnel and equipment: Private companies staff their ambulances with EMTs; MFD has no interaction with the incident once the call has been transferred to the private company.

Reimbursement: Payers or patients reimburse the private company.

Calls identified as ALS If a dispatcher determines the situation necessitates advanced life support, the dispatcher transfers the call to the Milwaukee Fire Department. Wisconsin state statutes define advanced life support as treatment a paramedic is licensed to administer, including the administration of multiple medications, chest decompression, and cardiac pacing (Wis. Admin. Code ch. DHS 112, Binaski 2010).

Once on scene, MFD paramedics assess whether the call actually requires ALS care. If ALS care is required, MFD will transport the patient to the hospital; this type of call will be referred to as “ALS.”

In approximately 60 percent of the responses, a call dispatched as ALS is not transported by MFD. If a call does not require ALS care, it is downgraded from ALS to BLS-Private. This type of call will be referred to as “ALS-Downgrade.” As soon as a call is determined to be an ALS-Downgrade, a private provider is dispatched to provide transport. MFD paramedics provide initial care until the

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private provider arrives after which the private provider transports the patient, and bills for reimbursement. MFD does not bill or receive any compensation for care provided on ALS-Downgrade calls. In some cases, MFD will receive equipment and materials from the private provider to replace what they used while providing initial care.

Personnel and equipment: MFD sends a fire engine and a med unit to all of the ALS calls. Four EMT-certified firefighters ride on a fire engine; a firefighter with paramedic training may also be on the engine. Two paramedics staff each med unit.

Reimbursement: Payers or patients reimburse MFD unless the call is downgraded to BLS-Private.

Calls classified as BLS-MFD If a call is classified as BLS but the severity of the problem is uncertain, the dispatcher will send both a MFD fire engine and the appropriate private provider.2 The MFD fire engine is dispatched because it usually arrives on site and begins providing care more quickly than private providers, which can result in improved patient outcomes in certain cases.

If the MFD personnel on scene determine the call only requires a BLS level of care, they will continue to provide care until the dispatched private ambulance arrives to continue care and transport the patient. This type of call will be referred to as “BLS-MFD-Private.”

If the MFD personnel on scene determine the call requires an ALS level of care, a MFD med unit is dispatched and will provide care and transport the patient. This type of call will be referred to as “BLS-MFD-Upgrade.”

Personnel and equipment: The MFD sends a fire engine staffed with four EMT-certified firefighters. If the call is determined by the fire engine personnel on scene to be a BLS call, a private ambulance staffed with two EMTs is sent. If the call is an ALS call, an MFD med unit staffed with two paramedics is sent.

Reimbursement: If responders determine the call is ALS and MFD provides transport, the appropriate payer or the patient will reimburse MFD. If the first responders determine the call is BLS-Private, the private company transports the patient and the payer or patient will reimburse the private company. If a private company provides transport, they generally replace the supplies used by MFD to treat the patient, but MFD receives no reimbursement for labor or vehicle operating costs.

2 The dispatch system matches the needs of the patient to the appropriate asset. BLS-MFD is a catchall category used when the caller is not clear about the medical services needed, or when quicker response times could make a difference in the outcome of the patient.

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Equipment Each MFD asset has different medical care capabilities. Fire engines are typically staffed only by EMTs, limiting the type of care that can be administered to a patient. Med units are staffed with paramedics, who can administer more advanced medical procedures. Table 1 summarizes the typical equipment and personnel that responds to various types of EMS calls.

Table 1. Equipment and personnel sent to different call types MFD equipment Paramedics Private company BLS-Private None No Yes BLS-MFD-Private Fire engine No Yes BLS-MFD-Upgrade Fire engine & med unit Yes No ALS-Downgrade Fire engine & med unit Yes Yes ALS Fire engine & med unit Yes No

Source: Authors, based on information from MFD Dispatch

Policy Goals We evaluate each of the options based on their ability to meet the following goals. We base our recommendation on how well each option meets these criteria while minimizing possible negative consequences.

Maximize net fiscal effect We estimate the net effect on the city budget for each policy option. Given the current budget constraints facing the city, any recommendations to changes in services must result in a positive net fiscal impact. We define net fiscal impact as the difference between the change in revenues and change in costs. Any extra costs generated by changes must be exceeded by extra revenue.

Maintain quality of service In keeping with the MFD’s mission to “... be responsive to the needs of our citizens by providing rapid, professional, humanitarian services essential to the health, safety, and well-being of the city,” we analyze each option on its ability to maintain, enhance, or not significantly reduce the quality of service provided to patients (City of Milwaukee 2011). We use two primary indicators to determine each policy option’s impact on quality of service.

First, we consider the impact of any policy option on incident response time. In most cases, a small increase in response time will have a negligible effect on the quality of service. However, increases in response times for time-critical emergencies, such as cardiac incidents, could have negative impacts on the quality of patient care, including increasing the risk of death. One study found that the survival rates of high-risk patients increased if the EMS response time

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was at or below the National Fire Protection Association standard of four minutes (Pons et al. 2005).

Second, we consider the proportion of time EMS personnel are active in the field relative to their entire shift. Research by Brachet et al. (2010) found EMS personnel commit more errors and exhibit generally reduced performance near the end of long shifts or when providing service for extended periods of time. A University of Pittsburgh Medical Center survey of fatigue and safety outcomes in EMS personnel found greater odds of injury, medical error, and safety compromising behavior in fatigued respondents compared to the non-fatigued respondents (Patterson et al. 2012). Work shifts of more than 10 to 18 hours can lead to errors in tasks requiring “vigilance and focused alertness,” such as driving motor vehicles or providing health care (Elliot & Kuehl 2007). Other industries with a history of long hours are making changes to traditional schedules based on studies of sleep and fatigue. In medicine, first-year residents are now limited to 80 hours per week (ACGME 2011). Additionally, the airline industry recently released new guidelines requiring flight personnel have 10 hours of rest (Huff 2012).

Ease of implementation We examine the ease of implementation of each of the options, including the administrative complexity of the option and the likelihood that the policy will be implemented. All administrative impact must be considered, including additional costs and staff time required to change policies.

Public perception of EMS response Due to the procedures used to handle BLS-MFD-Private, BLS-MFD-Upgrade, and ALS-Downgrade calls, there are approximately 50,000 dispatches annually, out of the total 93,383 annual dispatches, at which both the MFD and a private provider are on scene at the same time, which includes approximately 17,000 dispatches in which a MFD med unit and a private provider are on the scene at the same time. These counts are derived from MFD dispatch data, discussed in further detail below. Regardless of whether having MFD and private providers on scene simultaneously is actually inefficient, it presents an appearance of inefficiency to residents, who have lodged complaints through their aldermen (Slowey 2012, Meyer 2012). In our analysis, we will consider how frequently MFD and a private provider respond to the same call.

Data Analysis Methods For the majority of our analysis, we used data provided by the Milwaukee Dispatch Center. The data capture covered March 1, 2009 through February 14, 2011, and included all of the calls dispatched to EMS personnel during this time. MFD Dispatch software automatically assigns a unique call ID number to each call. MFD units are assigned to a call based on the procedures discussed above;

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each change in status by an MFD unit and the time of the status change is recorded by the software. MFD units report changes in status to dispatch via a computer system in each unit. See Appendix B for a detailed description of the data capture process.

Table 2 provides a sample of the cleaned dispatch data for a standard ALS call. The example has a MFD fire engine and med unit arriving on scene, providing transport, and the fire engine returning to the station while the med unit transports the patient to a hospital before returning to the fire station.

Table 2. Cleaned dispatch data example

Unit ID Date Time Incident

ID Action Type Duration

M18 1/26/2011 18:39:10 662010 6 0:01:04 M18 1/26/2011 18:40:14 662010 5 0:03:28 M18 1/26/2011 18:43:42 662010 4 0:21:30 M18 1/26/2011 19:05:12 662010 272 0:05:49 M18 1/26/2011 19:11:01 662010 273 0:41:42 M18 1/26/2011 19:52:43 662010 263 -- E29 1/26/2011 18:39:10 662010 6 0:00:59 E29 1/26/2011 18:40:09 662010 5 0:02:21 E29 1/26/2011 18:42:30 662010 4 0:14:20 E29 1/26/2011 18:56:50 662010 263 --

Action Type Description

6 Dispatch 5 En route to Incident 4 Arrived on Scene

272 Transport to Hospital 273 Arrived at Hospital 263 Returning to Quarters

Source: Authors, based on MFD Dispatch data

Unit ID is the specific unit assigned to the call. In this example, M18 is the med unit and E29 is the fire engine. The date and time fields show exactly when each change in status was input into the unit’s computer; a 24-hour time is used, represented as hours:minutes:seconds. The action type shows the change in status, and the duration shows how long the unit spent performing that action.

The data in its raw form required us to perform a significant amount of “cleaning” of the dataset. In particular, the computer that records this response time data does not account for human errors (i.e., pressing the incorrect button or pressing a button multiple times). Therefore, any inaccurate times that may have resulted from these errors were included in the dataset.

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The data was provided in a compressed text file. It had to be properly imported into a spreadsheet format with correct separation of the variables contained within the data. There were many entries that did not make sense; John Pederson explained that dispatch “reset” codes are contained within the data as well as multiple units being contained within a single entry. There were other incomplete or problematic entries, such as repeated entry of the same code, which would lead to redundant entries and miscalculated durations. Each of these misleading entries was systematically removed to create a cleaned dataset that would accurately represent the activities of MFD.

Date and time were stored in a single variable within the dataset. This was separated into two distinct variables to allow easier calculations and analysis. Next, accurate durations had to be determined for each data entry by calculating the difference between the time of the current entry and the next entry; however, several problems arose in completing these calculations.

First, while redundant entries had already been removed, missing entries had not. These missing entries most likely resulted from MFD personnel forgetting to enter their new dispatch code when changing status. These missing entries often resulted in durations exceeding one day. We removed these entries’ duration data so as not to mislead the calculation of average times and durations. The unit ID and Incident ID codes were not removed so an accurate count of calls, dispatches, and runs could be retained.

Second, the code 27 “location move” presented a serious difficulty. This code is used when the location or destination of the unit changes. Specifically, a responding unit will key in “en route to incident” or “transporting to hospital,” and then shortly after key in “location move.” Based on communication with MFD personnel, this is most likely because of an updated incident location or change in hospital destination. This significantly shortens the duration of the original entries before the code 27. Therefore, to accurately reflect the duration of the modified entry, we had to modify the duration data and add the duration of the code 27 entry into the duration of the previous entry.

To prepare the data for the EMS analysis, several steps were taken. Since Milwaukee uses more engines than med units, engines have a faster response time. As a result, including engines in our med unit analysis would produce a biased average response time. To correct this, we only used responses by med units for all of the time and duration analyses.

We calculated the average for each step in the EMS process and summed the average of each step to determine the average total time for a run. All of these modifications helped prepare the data for our specific analysis. The results of our data analysis were not always consistent with the other data provided to us, such as the Accountability in Management report on Emergency Services (AIM report), a City of Milwaukee document summarizing MFD call data (City of Milwaukee 2012). We believe this is primarily a function of differing definitions

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and classifications of calls, dispatches, and transports, as well as the possibility that the AIM report and other analysis relied on different sources of data.

We use the total number of times med units and engines were dispatched – rather than the number of unique incident IDs – to represent the number of calls. Although each unique ID corresponds to a single call, MFD dispatches multiple units to the scene. Because we are analyzing the capacity and responses of MFD med units, the response time of an individual med unit is the more relevant measure.

Demand for EMS service and MFD’s EMS capacity This section describes the demand for EMS care in the City of Milwaukee and MFD’s capacity to provide that care.

Response times Response times are a common quality indicator in emergency response. The National Fire Protection Association’s standards require fire departments to establish response time and performances objectives. A first responder with an automatic external defibrillator should arrive in four minutes or less to an emergency medical incident 90 percent of the time. ALS units should be deployed to ensure a travel time of eight minutes or less assuming a unit with an automatic external defibrillator arrived within the four-minute time frame (National Fire Protection Association 2010 4.1.2.1). A recent analysis indicates EMS response times of four minutes or less have been shown to improve survival rates “for patients with an intermediate or high-risk of mortality” (Pons et al. 2005). The 240-second (four-minute) response is MFD’s response time goal. Figure 2 indicates the MFD’s estimated current response times for med units. MFD has 37 engines and only 12 med units, which makes it likely the first responder is an engine rather than a med unit. Therefore, the response times listed in Figure 2 are higher than the actual time it takes for an EMS asset to arrive on scene because med units most likely have further to travel.

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Figure 2. Average MFD EMS response time throughout the dispatch process

Source: Authors, created based on data from MFD Technical Services Division

(The time shown in parentheses is the standard deviation. The standard deviation for “total time for call” is not included because of the difference between calls that have a transport and calls that do not.)

Call comes into dispatch

EMS assets are dispatched

EMS assets are leave the firehouse

EMS resources arrive on scene

Patient leaves the scene

Patient arrives at hospital

EMS asset comes back into service

Average total time per call

0:56:43

Average time at the hospital

0:23:38 (0:12:56)

Average transport time 0:10:38

(0:08:01)

Average on scene time 0:22:13

(0:16:50)

Average en route time 0:04:43

(0:03:53)

Average dispatch time 0:01:10

(0:00:50)

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We calculated average dispatch times using the data set we described in the previous section of this report. The standard deviation of these values is high, which we believe is a function of the placement of EMS equipment, a wide variation in the types of calls, and errors introduced when EMS responders press buttons incorrectly. Some data that is likely erroneous remains in the database, but we do not believe there is a significant bias in these errors.

We would expect some variation in the times for each step simply because of the placement of EMS assets. Placement of EMS assets has two criteria: to minimize the response time of med units and to place units where demand is highest. We would expect units placed in areas of high demand to have shorter response times than those placed to ensure that MFD meets federally mandated response-time standards.

The severity of calls will affect the on-scene time of med units. The needs of a patient will dictate the quantity of time that a med unit must remain on scene. The dispatch data used to calculate the average time for each step includes ALS and BLS-MFD calls in which a med unit transports the patient. Therefore, we expect that there would be variation in the quantity of time needed for each step based on its classification.

MFD allows patients to choose the hospital to which they are transported. Allowing hospital choice creates a high level of variation in transport time based on the location of the incident and the location of the hospital.

Lastly, as noted in the data analysis methods section, the order that buttons are pressed by EMS responders affects the accuracy of the times recorded. If an EMS responder presses the buttons in the wrong order or forgets to press a button when a step is completed, the data will be recorded incorrectly. We believe that some of the variation in the data can be attributed to errors in the data collection process.

Number of incidents requiring EMS response in the City of Milwaukee We determine current usage of EMS services in the City of Milwaukee at 93,383 calls per year. This number is calculated by determining the number of MFD-handled calls from the dispatch data, which is approximately 62,902 calls per year. We added it to the number of private calls handled per year taken from the 2011 AIM report, or 30,481 calls per year (City of Milwaukee 2012). We use the AIM report data on private providers because this number is not available through dispatch data or other sources; we use dispatch data for MFD call values to remain consistent with the rest of the analysis.

Capacity calculations MFD’s med unit personnel work 24-hour shifts, but can only provide EMS services for some portion of that period. We define capacity in terms of the

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amount of time med units are in service during a 24-hour period. A unit is in-service from the time it receives the dispatch call until dispatch is notified the unit is returning to the fire station.

We base our estimate of full EMS capacity on a personal interview with Captain John Pederson, MFD Technical Services Division, who says med unit efficiency begins to decline when a unit responds to 2,900 calls per year, or about eight calls per day. At around 2,900 calls per year, the med unit is in service enough that it is unable to respond to new calls in its area, forcing units from surrounding areas to respond. At around 3,500 calls, units are unavailable to respond to calls in their area 25 percent of the time. Based on the average call length, 2,900 calls per year results in just under five hours per day of in-service time, and 3,500 calls yields just under six hours of in-service time. 3

Our analysis of capacity is based on every med unit averaging six to eight hours of in-service time per day. We chose the lower bound at six hours based on Captain John Pederson’s analysis that at 3,500 calls per year, med units begin to respond to a greater number of calls outside of their territory. As shown in Figure 3, most MFD med units are significantly below this capacity threshold.

Figure 3. Annual med unit calls

Source: Authors, created based on data from MFD Technical Services Division

3 Med units 5 and 7 operate over this threshold, while the majority of the rest of the med units are operating significantly under capacity. This analysis would underestimate total capacity if med units 5 and 7 continued to operate at current levels while increasing usage of other med units. Med units 5 and 7 operating at current levels is not required by this or any option, but the practical issues of location of med units and the preferences of personnel manning them may result in med units 5 and 7 continuing to run above our threshold level, increasing overall effective capacity.

0

500

1000

1500

2000

2500

3000

3500

4000

4500

3 4 5 6 7 13 14 15 16 17 18 19

Yearly M

ed Unit

Dispa

tche

s

Individual Med Unit ID Number

TransportsNon‐Transports

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We chose the high end of eight hours based on a standard workday, as well as research showing degradation in performance after extended periods of time, especially for high-stress jobs. The capacities used in this analysis are theoretical, and as any capacity value will be dependent on individual personnel capabilities, tolerances, and preferences, it can only be reliably determined via significant testing and feedback. Any policy change involving additional volume handled by med units would most likely be implemented gradually, allowing MFD to more accurately determine its actual capacity. Further discussion of capacity issues can be found in the further recommendations section.

Based on available research, discussions with Pederson, and our analysis of med unit in-service time, we use a range for the maximum in-service time for a med unit of six to eight hours. Using a range of six to eight hours per 24-hour period of in-service time for each med unit, and 12 MFD med units, there are 72 to 96 hours of time available for MFD med units to handle calls. We use 72 to 96 hours per day as our estimate of MFD’s capacity to deliver EMS services given the current supply of equipment and personnel.

From March 2009 to February 2011, MFD’s med units were dispatched to an annual average of 30,137 calls, and transported an annual average of 12,797 of those calls. MFD’s 12 med units are in service an average of 48 hours and 6 minutes per day, or about 4 hours and 1 minute per med unit per 24-hour shift. See Appendix C for a description of this calculation. All of MFD’s med units have a total of between 17 hours and 54 minutes and 41 hours and 54 minutes of unused capacity in which to perform additional EMS service, or about 1 hour and 30 minutes to 3 hours and 30 minutes per med unit per 24-hour shift.

Policy Options and Analysis We examine the operation of EMS services in Milwaukee to determine if net revenue can be increased. We develop four options to consider:

1. MFD charges a dispatch fee to private providers. 2. MFD transports all of the calls downgraded from ALS to BLS. 3. MFD transports ALS-Downgrades and some BLS-MFD calls, without

adding personnel or equipment. 4. MFD transports all of the BLS-MFD and ALS calls. This option would

require adding personnel and equipment.

The dispatch fee policy can be implemented whether or not MFD begins transporting more ALS and/or BLS calls.4

In this section, we describe and analyze our policy options using data from several sources, including raw dispatch data from the Milwaukee Dispatch Center,

4 In effect, there are seven policy options: dispatch fee only, and each of the three transport increase options with or without the dispatch fee.

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personal communications with MFD personnel and the City of Milwaukee Budget and Management Division personnel, the 2011 AIM report, and the 2010 MFD annual report.

Option 1: Dispatch fee The Milwaukee Fire Department charges a cost-recovery fee to the private providers for the dispatch services it provides.

MFD does not charge private providers for dispatching services. Charging a dispatch fee to private ambulance providers would allow MFD to recover some of the costs of providing dispatch services to the private providers. A dispatch fee would also provide revenue to offset the costs of call downgrades.

We suggest a $21 fee, based on the following calculations. Dispatches involving private providers accounted for 87 percent of all of the dispatches handled, or 81,234 of EMS 93,383 dispatches in 2011 (City of Milwaukee 2012). These dispatches include calls handed over to a private company as soon as they are confirmed to fall in the BLS-Private category, BLS-MFD-Private category dispatches in which MFD also responds, and any ALS calls in which private providers are called.

Based on data provided by MFD staff, wages plus benefits for 26 full-time dispatch personnel is roughly $1,709,000 annually, with annual equipment and software costs of approximately $189,000, for a total estimated dispatch cost of $1,898,000. This cost estimate does not include the capital costs associated with the building in which the dispatch center is located. Based on discussions with dispatch personnel, no changes would be necessary to the current dispatch system to accommodate any other proposed options in this analysis, since MFD dispatch already handles dispatching all of the calls. Dividing the estimated 2011 dispatch costs by the estimated 93,383 dispatches yields an average dispatch cost of approximately $20.32, making a $21 dispatch fee a reasonable cost recovery fee if the fee is implemented in 2013.

The following sections analyze this policy relative to each of our policy goals.

Minimize costs and maximize revenue This policy change does not increase costs for MFD, beyond establishment of the billing system and costs to operate a billing operation, which we expect to be minimal. The administrative cost of billing private ambulances for dispatch fees would be negligible because information needed to assess the dispatch fee is already generated by MFD personnel for use in internal and City of Milwaukee reports. We assume any additional administrative costs can be covered by MFD’s current administrative capacity and personnel. We do not believe that billing the private companies would represent an onerous task for MFD.

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Assuming a dispatch fee of $21 per call and 100 percent of calls involving private providers being assessed the fee, or 81,234 private calls out of a total of 93,383 calls (approximately 87 percent), charging a fee would result in a net revenue increase of $1,706,000 annually. This new revenue would represent 1.6 percent of MFD’s $105,025,041 operating budget for 2012 (City of Milwaukee n.d.). Our projection overestimates the net revenue increase because we assume private providers are involved in all of the calls not transported by MFD. The estimate is high because some of the calls not transported by MFD are refusal of transports, which are not turned over to private providers, and no fee would be charged. This assumption only affects our estimate of the net revenue total and not our calculation of the appropriate dispatch fee.

Quality of service Since the process for handling and transporting calls would remain unchanged, current transport levels would remain unaffected. There would be no impact on response times or quality of service.

Implementation This action option does not appear to violate the current agreement in place between MFD and the privately held providers. It is highly likely, however, that the private companies will strongly object to the imposition of a new dispatch fee. Both MFD and City of Milwaukee Budget Office staff suggested to us that the private ambulance companies can exert significant political influence.

There is a possibility that a per-call fee could be construed as a “kickback” from the private companies to the MFD for providing customers. Section 1128B(b) of the Social Security Act, known colloquially as the “anti-kickback” statute, makes it a criminal offense “knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program” (U.S. Department of Health and Human Services Office of Inspector General 2010). In the context of this analysis, MFD and city leadership might fear that an option that provides for reimbursement by private ambulance services to the city for dispatch costs may violate this federal provision. If such a system did in fact violate federal law, its implementation would be legally prohibited and, therefore, infeasible.

However, a U.S. Department of Health and Human Services advisory opinion issued by its Office of Inspector General (OIG) in 2010 found that a similar arrangement “poses minimal risk of Federal health care program fraud or abuse” (U.S. Department of Health and Human Services Office of Inspector General 2010). Assuming the same logic used in the OIG report applies to the City of Milwaukee EMS, the risk associated with this option would be similarly low. The OIG report, however, bases part of its opinion on the fact that “the annual dispatch fee will not be tied directly or indirectly to the volume or value of referrals between the parties” (U.S. Department of Health and Human Services Office of Inspector General 2010), since the contract provided for an annual fee rather than a per-call charge for dispatch services.

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The City of Milwaukee chooses to contract with private ambulance companies to more effectively provide a public service. Without such a contract in place, the private companies would not have access to any of these patients. The city has granted a monopoly in each of the service areas to which the private companies are assigned. In this monopoly, the private companies enjoy the financial benefits of market exclusivity. Because of this, we do not find it unreasonable for the City of Milwaukee to charge a fee in exchange for this arrangement. But the city should nonetheless consult appropriate legal counsel in order to better understand the potential implications for pursuing this option. See Appendix D for additional details on the federal anti-kick back statue and the case referenced above.

Public perception With no changes in how calls are handled or transported, the public perception of inefficiency due to multiple agency response to EMS calls should not be impacted.

Option 2: Transport ALS-Downgrade calls without adding med units The Milwaukee Fire Department begins transporting all of the ALS-Downgrade calls. These calls are currently turned over to private providers for transport. Taking on all of the 8,195 ALS-Downgrade calls annually would increase transports performed by MFD. This option would also reduce the inefficiency of MFD personnel arriving at an incident and providing treatment, but then calling in a private ambulance to perform the transport, as is currently required under the agreement with the private providers.

According to MFD data, approximately 42 percent of ALS-dispatched calls are transported by MFD. ALS-dispatched calls are not transported by MFD for a variety of reasons, including mistakes made by the caller, downgrades to BLS that lead to private transports, or refusal of transport by the patient.

The fraction of these calls not transported by MFD and instead transported by private providers is unknown because MFD does not collect refusal of transport data. We assume it is similar to the current non-transport rate for BLS-MFD calls, or about 42 percent. We have received anecdotal affirmation of this figure from a MFD firefighter who, in his seven years with the department, estimates the percentage of dispatches that result in transport is between 40 and 50 percent.

Approximately 8,195 ALS-dispatched calls do not result in an MFD transport, which means approximately 3,442 transports could be added each year (9.4 transports per day). As shown in Table 3, at 34 minutes per transport, MFD’s med units would be in service a total of an additional 5 hours and 21 minutes per day to handle all of the ALS-dispatched calls, much less than our estimate of MFD’s unused capacity. We estimate MFD can begin transporting all of the ALS-

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dispatched calls without adding med units and still have 18 hours 33 minutes to 42 hours 33 minutes of unused capacity.

Table 3. Option 2 estimated time and transport capacity

Line Source 6-hour

capacity 8-hour

capacity ALS calls not transported by MFD (1) 8,195 8,195 Transport to Call Ratio (2) 42% 42% Potential additional transports (3) (1) * (2) 3,442 3,442 Additional time to transport ALS call (4) 0:34:00 0:34:00 Total additional time required per year (5) (3) * (4) 1950:28:00 1950:28:00 Total additional time required per day (6) (5) / 365 5:21:00 5:21:00 MFD daily capacity (7) 72:00:00 96:00:00 Current MFD med unit time in service (8) 48:06:00 48:06:00 Unused capacity (9) (7) - (8) 23:54:00 47:54:00 Unused capacity after adding transports (10) (9) - (6) 18:33:00 42:33:00

Source: Authors


Minimize costs and maximize revenue MFD would dispatch a private provider and allow them to transport the patient when a call is determined to be a BLS call, even if originally dispatched as an ALS call.

We were unable to estimate the added cost of maintenance and fuel associated with increasing the number of transports, and thus the number of miles on a MFD med unit. The dispatch data analyze did not include the miles traveled during transport; therefore, we are unable to estimate the total number of added miles to med unit under this alternative. To determine the financial impact of this policy option, we only calculate the amount of new revenue.

MFD bills when transporting a patient, but not all invoices are paid, and payers often do not reimburse the full amount. Data from the City of Milwaukee’s billing company indicates that on average, 46 percent of the amount billed is paid. Our analysis of the report on transport revenue provided by MFD shows an average revenue of $297.45 per transport (Advanced Data Processing, Inc. 2012). See Appendix E for a comprehensive breakdown of the average per patient revenue. With 3,442 new transports, policy option 2 would generate $1,024,000 in new revenue. This amount is equal to 1 percent of MFD’s 2012 operating budget.

With dispatch fee: Under this policy option, private ambulance providers would be handling 8,195 fewer calls. Therefore, the dispatch fees would be reduced by $172,000 to $1,534,000. If MFD assumes responsibility for all of the ALS-

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Downgrade transports and charges a dispatch fee, the net revenue increase for MFD would be $2,558,000, or 2.4 percent of MFD’s 2012 operating budget.

Quality of service Since this option would increase the current workload on existing personnel, it is possible response times would increase; however, the threshold chosen results in an average of approximately 4.5 hours per day of in-service time for EMS personnel. This is less than the work shift lengths connected with decreased vigilance and focused alertness,5 so we do not believe increased workload would cause any decrease in quality of service.

Implementation This action would violate the current agreement with the private companies. It is beyond the scope of this analysis to be able to predict what, if any, contractual, legal, or political consequences would result from the implementation of this policy option.

Public perception Under this policy option there would be an annual average of 8,195 fewer incidents where MFD assets and a private ambulance are both at a scene.

Option 3: Transport additional BLS-MFD calls The Milwaukee Fire Department begins transporting all of the ALS-Downgrades, as explained in Option 2, and, without adding personnel or equipment, also begins responding to and transporting more calls that are currently categorized as BLS-MFD-Private. In addition to taking on ALS-Downgrades, as described in Option 2, MFD would also take on response and transport for BLS-MFD-Private calls as current capacity allows. This would further increase the number of transports performed by MFD and further reduce the inefficiency resulting from private providers and MFD med units providing service at the same incident.

Based on estimates detailed in Option 2, MFD’s med units would have between 18 hours and 33 minutes and 42 hours and 33 minutes per day in which they could respond to and transport BLS-MFD-Private calls, which are currently responded to and transported by private ambulance providers, as shown in Table 4.

5 Previous studies, however, have concentrated on total shift length, rather than active time. Some of the concerns related to longer shifts and decreased efficacy of providers could still apply.

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Table 4. Option 3 estimated time, call, and transport capacity

Line Source 6-hour

capacity 8-hour

capacity Unused capacity (From Table 3 line (10)) (1) 18:33:00 42:33:00 Weighted average time of BLS-MFD calls (2) 0:37:00 0:37:00 BLS-MFD (private) calls able to be added per day (3) (1) / (2) 30.1 69.0 BLS-MFD (private) calls able to be added per year (4) (3) * 365 10,983 25,189 Transport to Call Ratio (5) 42% 42% BLS-MFD transports added per year (6) (4) * (5) 4,614 10,579

Source: Authors

Since it is unknown whether a BLS-MFD-dispatched call will result in a transport, we use the weighted average time of a call of 37 minutes to determine that MFD med units can respond to an additional 30.1 to 69.0 calls per day (10,983 to 25,189 per year). Between March 2009 and February 2011 MFD responded to an annual average of 42,558 BLS-MFD-Private calls. Under this policy option, MFD would handle between 10.8 percent (4,614 / 42,558) and 24.9 percent (10,579 / 42,558) of the BLS-MFD calls that are currently handled by private companies. According to our calculations, these additional calls could be transported with MFD operating at full capacity, without MFD investing in additional vehicles or hiring additional EMS staff.


Minimize costs and maximize revenue As in Option 2, MFD does not add equipment or personnel, so there are no additional equipment or personnel costs. The chosen maximum in-service time – six or eight hours – impacts the additional revenue generated under this option. A six-hour maximum results in 4,614 additional transports per year, while an eight-hour maximum results in 10,579 additional transports per year. The additional transports would result in $21,372,000 with a six-hour maximum in-service time, and $3,147 with an eight-hour maximum. This is in addition to the $1,706,000 in transport revenue generated by taking over transport of all of the ALS-Downgrade calls, for a total of $2,396,000 (six hours) to $4,171,000 (eight hours). The additional revenue equals 2.3 percent to 4.0 percent of MFD’s 2012 operating budget.

With dispatch fee: Under this policy option, private ambulance providers would see a reduction in calls, so the revenue generated by the dispatch fee with this option is reduced to $1,303,000 (six hours) or $1,005,000 (eight hours). The net revenue gain for this option is $3,699,000 (six hours) or $5,175,000 (eight hours). The additional revenue equals 3.5 percent or 4.9 percent of MFD’s 2012 operating budget.

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Quality of service Since this would increase the current workload on existing personnel, it is possible response times would increase; however, the threshold chosen results in an average of approximately six or eight hours per day worked by EMS personnel. This is less than the hours that have generated concern,6 so we do not believe the increased workload would cause any decrease in quality of service.

Additional med units might not be able to be added in optimal locations due to the capacity and locations of current firehouses, which could result in longer med unit response times. Since fire engines with EMS personnel are already dispatched to all of these calls, engine response times should not change and, therefore, we do not expect any quality of service reductions due to the implementation of this option, even if med unit response times slightly increase.

Implementation As with Option 2, this action would violate the current agreement with the private companies.

Public perception Cases at which an MFD med unit and a private ambulance are on scene at the same time will be virtually eliminated with this option.

Option 4: Transport all of the BLS-MFD and ALS-Downgrade calls The Milwaukee Fire Department begins transporting all of the calls currently categorized as ALS-Downgrades and BLS-MFD-Private calls. To accomplish this goal, MFD would need to hire additional EMS personnel and purchase additional equipment. Under this option, MFD transports all of the calls to which they currently respond but do not transport. This would be a total of 62,902 yearly BLS-MFD and ALS calls that could be handled by MFD. MFD already responds with med units to 30,137 of the 62,902 ALS and BLS-MFD calls and transports 12,797 of them. Option 4 would expand med unit responses to the remaining 32,765 calls. To take over response and transport for all of the BLS-MFD calls, MFD would need to add personnel and equipment. From March 2009 to February 2011, the MFD dispatch center dispatched an average of 42,558 BLS-MFD-Private calls annually. Based on the above calculations for Options 2 and 3, MFD would need to be able to handle the remaining 17,369 to 31,575 calls per year it is not able to cover with its current unused capacity. Taking responsibility for transporting all of the BLS-MFD calls would lead to between 7,295 and 13,261 additional transports per year.

6 Previous studies, however, have concentrated on total shift length, rather than active time. Some of the concerns related to longer shifts and decreased efficacy of providers could still apply.

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As shown in Table 5, to handle the additional calls, MFD would need between approximately 29 hours and 53 hours per day of in-service time from new med units, depending on whether the total in-service maximum is defined as six or eight hours. MFD would need four new med units if the longer workday is chosen or nine new med units if the shorter workday is chosen.

Table 5. Option 4 estimated time and capacity required to handle ALS-Downgrades and all of the BLS-MFD calls and transports

Line Source 6-hour

capacity 8-hour

capacity Total BLS-MFD (private) calls per year (1) 42,558 42,558 Already handled calls (from Table 4 line (4)) (2) 10,983 25,189 BLS-MFD calls remaining per year (3) (1) - (2) 31,575 17,369 BLS-MFD calls remaining per day (4) (3) / 365 86.5 47.6 Transport to Call Ratio (5) 42% 42% BLS-MFD transports added per year (6) (3) * (5) 13,261 7,295 Weighted average time of BLS-MFD calls (7) 0:37:00 0:37:00 Time required for all BLS-MFD calls per day (8) (4) * (5) 53:20:43 29:20:43 Capacity of additional med unit (per day) (9) 6:00:00 8:00:00 Additional med units required (10) (8) / (9) 8.89 3.67

Source: Authors


Minimize costs and maximize revenue As noted in our description of this policy option, MFD would need to add med units to handle all of the BLS-MFD calls. For a six-hour maximum in-service time, nine new med units would be needed. For an eight-hour maximum, four new med units are needed. Based on our estimated annual operating cost of $524,000 for each unit, this results in an increased annual cost to MFD of $2,096,000 or $4,716,000. See Appendix F for a breakdown of the yearly amortized costs of a med unit.

Under this option, MFD will add 13,261 transports (six-hour in-service maximum) or 7,296 transports (eight-hour maximum) more than added in Option 3. At our estimated revenue increase of $297.45 per transport, MFD would raise $3,945,000 (six-hour maximum) or $2,170,000 (eight-hour maximum) in addition to the transport revenue raised from Option 2 and Option 3, for a transport revenue increase of $6,341,000 under either in-service maximum. The net fiscal impact for this option is $1,625,000 for a six-hour in-service maximum, and $4,245,000 for a eight-hour maximum. The net fiscal impact equals 1.5 percent or 4.0 percent of MFD’s 2012 operating budget.

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Adding new med units would significantly stretch the unit capacity of the current firehouse network, which would likely lead to non-optimal placement of some of the additional med units. The non-optimal placement would increase travel time and average response times, and thus lower effective capacity. It may also require adding additional firehouses, the costs and practical and logistical considerations of which are beyond the scope of this analysis but would be significant.

With dispatch fee: Under this policy option, private ambulance providers would be handling only BLS-Private calls. The dispatch center dispatches 30,481 BLS-Private calls annually (City of Milwaukee 2012). Based on a $21 dispatch fee, MFD would realize a revenue increase of $640,000. The net fiscal impact of transporting all of the BLS-MFD calls and charging a dispatch fee is $2,265,000 (six-hour maximum) or $4,885,000 (eight-hour maximum). The impact represents 2.2 percent or 4.7 percent of the city’s 2012 operating budget.

Quality of service This change in transport policy impacts only med units and will likely have no impact on first responder response times. Anecdotally, MFD personnel believe the agency provides superior care compared to that of the private ambulance providers. While there is no data to back this claim, MFD has paramedics on med units, while private providers do not. It is reasonable to assume that better trained personnel will provide a higher level of care.

Implementation This action would also violate the agreement with the private companies. Moreover, when the dispatch fee is included, it would also have the same potential kickback concerns.

Public perception With this option, there will be no calls at which both MFD and a private provider are at a call at the same time, thereby eliminating the public perception of duplicative services.

Individual med unit analysis Based on the capacity discussions above, we determine that a med unit can perform services six to eight hours per day. MFD can recover $297.45 per transport on average, and it costs $524,000 per year to operate a med unit; the calculations for these values are provided in Appendixes E and F, respectively.

Based on these values, as well as the analyzed value of an average weighted call time of 37 minutes and a 42 percent transport to call ratio, we can calculate the per unit revenue of an individual med unit (Table 6).

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Table 6. Individual med unit analysis

Line Source 6-hour

capacity 8-hour

capacity Capacity of additional med unit (1) 6:00:00 8:00:00 Weighted average time of call (2) 0:37:00 0:37:00 Calls per day (3) (1) / (2) 9.73 12.97 Transport to Call Ratio (4) 42% 42% Transports per day (5) (3) * (4) 4.09 5.45 Revenue per transport (6) $297.45 $297.45 Revenue per day (7) (5) * (6) $1,216.57 $1,621.10 Revenue per year (8) (7) * 365 $444,000.00 $592,000.00 Cost per year (9) $524,000.00 $524,000.00 Net revenue per Med Unit (10) (8) - (9) -$80,000.00 $68,000.00

Source: Authors

Based on the analysis shown in Table 6, an individual med unit operates at a loss of $80,000 per year if it is running six hours per day, and operates with a net gain of $68,000 if it is running for 8 hours per day. In other words, a med unit needs to perform an average of 4.83 transports per day to break even.

Summary and Recommendations Table 7 summarizes the revenues, costs, and net revenues for each of the policy options considered in this report. Because the dispatch fee option can be implemented in conjunction with any of the other three options, the dispatch fee combined with each option is presented to outline each potential course of action. Finally, as our capacity analysis establishes a range of med unit capacities, each option is presented with the low and high individual med unit capacity values of six hours per day and eight hours per day, respectively.

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Table 7. Summary of all of the options’ revenues, costs, and net revenues

Option

Description

Dispatch Fee

Revenue (6 hours)

Dispatch Fee

Revenue (8 hours)

Transport Revenue (6 hours)

Transport Revenue (8 hours)

Costs (6 hours)

Costs (8 hours)

Net Revenue (6 hours)

Net Revenue (8 hours)

Option 1 Dispatch fee $1,706,000 $1,706,000 $0 $0 $0 $0 $1,706,000 $1,706,000

Option 2 Taking over all of the ALS-Downgrade transports

$0 $0 $1,024,000 $1,024,000 $0 $0 $1,024,000 $1,024,000

Option 1&2 With dispatch fee $1,534,000 $1,534,000 $1,024,000 $1,024,000 $0 $0 $2,558,000 $2,558,000

Option 3

Taking over all of the ALS-Downgrade transports and some BLS-MFD calls

$0 $0 $2,396,000 $4,171,000 $0 $0 $2,396,000 $4,171,000

Option 1&3 With dispatch fee $1,303,000 $1,005,000 $2,396,000 $4,171,000 $0 $0 $3,699,000 $5,175,000

Option 4

Taking over all of the ALS-Downgrade transports and all of the BLS-MFD calls

$0 $0 $6,341,000 $6,341,000 $4,716,000 $2,096,000 $1,625,000 $4,245,000

Option 1&4 With dispatch fee $640,000 $640,000 $6,341,000 $6,341,000 $4,716,000 $2,096,000 $2,265,000 $4,885,000 Source: Authors

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All of the options have positive net revenue. From a perspective that only considers the net revenue of the options, the combination of Option 1 and Option 3 is the most attractive: taking on BLS calls as well as transporting all of the ALS-Downgrades up to MFD’s current capacity while also adding a dispatch fee. Both variations of Option 4 are less desirable from a revenue perspective than Option 3; thus, Option 4 – adding additional med units – is less attractive than other options.

While revenue is not the only consideration, the logistics of not only adding additional med units but also transporting more than 20,000 additional patients yearly make this option the most difficult and expansive from an implementation perspective. Revenue and implementation considerations, in conjunction with the potential for a more severe backlash from the private providers for taking a greater amount of transports from the private providers, prevent a recommendation of either version of Option 4.

The attractiveness of the dispatch fee depends on whether there would be significant resistance to its implementation. Since the revenue from the dispatch fee decreases as MFD takes on more calls currently dispatched to private providers, charging a fee becomes a less attractive option the more calls and transports MFD handles.

The main difference between Option 2 and Option 3 is in implementation. Option 2 does not push the limits of our estimated capacity of MFD’s med units, and thus requires less effort to implement than Option 3. Med unit capacity is not a firm value or concept, and the consequences of exceeding capacity are neither immediate nor necessarily obvious, so it cannot be used to regulate a med unit’s capacity. Instead, dispatch would have to carefully monitor a med unit’s capacity and operate accordingly.

Recommendations We recommend implementing a dispatch fee along with transporting ALS-Downgrades and BLS-MFD calls up to current med unit capacity (Option 1 and Option 3), as it best fulfills all of the established policy goals. This option has the highest net revenue, does not require the addition of med units, allows for the most flexibility in implementation, and reduces or eliminates the public perception problem.

The dispatch fee of $21 per call we propose is a conservative and reasonable estimate of the share of services being provided by MFD to the private providers. If the fee is met with substantial resistance or challenges, the marginal value of implementing the dispatch fee becomes less attractive. Therefore, our recommendation of implementing a dispatch fee depends upon MFD’s long-term intentions regarding taking on additional calls, and potential costs and difficulties of implementing the dispatch fee.

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We recommend Option 3 because it provides the best understanding of med unit capacity and improving dispatch and response efficiency, as well as the most net revenue and satisfaction of our other policy goals. Option 3 allows MFD to spend time working with the specifics of implementing dispatch decisions based on capacity limits, without simultaneously having the pressure of needing to respond to and transport all of the BLS-MFD calls. It also allows MFD to better explore their individual med unit capacities, how to improve capacity, and how to improve call to transport ratios, again without having significant pressures of having to transport all of the BLS-MFD calls.

Further considerations The city also should re-examine the call to transport ratio and capacity efficiency issues, in addition to performance measurement system and benchmarking for EMS operations.

Call to Transport Ratio and Capacity Efficiency Issues The assumptions in the analysis above have a significant effect on the revenue estimates: these assumptions are based primarily on the current dispatch and revenue data from MFD. While it is beyond the scope of this analysis to predict how or in what way those numbers could change, based on our experiences doing this analysis and from conversations with various personnel during our data collection, we believe it is possible for efficiency increases to be implemented by MFD in a number of ways.

First, MFD could find ways to improve their call to transport ratio by reducing the number of non-transport calls to which med units respond. Ideally, these changes would be made without reducing quality of care. This would allow med units to use their capacity for additional transports, and less non-transport calls, which would, in turn, increase revenue. Improving dispatch protocols regarding when to dispatch a med unit is the most likely way of improving the transport ratio.

Second, increasing the amount of time med units are in service would increase the number of transports each unit could perform, which would increase the revenue generation and efficiency of each med unit. Our capacity numbers estimate a med unit being available for six to eight hours over a 24-hour period. These capacity norms do not take into account all of the factors that influence the capacity of a med unit (and most importantly, the factors affecting the paramedics operating the unit). Better understanding of the limiting factors for the paramedics could lead to a variety of improvements and solutions that would increase med unit capacity.

Finally, improved billing could also increase revenue and potentially make additional med units generate positive net revenue, as well as increase revenue generation of existing units. MFD is currently exploring ways to improve billing efficiency. An increase in the actual amount realized from billing would change the revenue figures used in this analysis.

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Performance Measurement System and Benchmarking for EMS Operations For any organization, the ability to use data to gain a comprehensive and empirically based understanding of its performance is crucial. A robust performance measurement system that is integrated into the normal operations of an organization fosters accountability, helps create and justify budget proposals, and facilitates the ability of organizational leadership to optimize their resources (Hatry 2006).

We recommend that the MFD consider establishing a performance measurement system for the EMS program. Although we do recommend the collection and review of clinical performance metrics as a vital component of an EMS performance measurement system, we focus on making recommendations for collecting process data as an initial step. In particular, we recommend capturing the following process data:

• Maintenance information: To better understand the costs associated with maintaining each of the EMS vehicles, we recommend recording information such as type of repair made, supplies or equipment used, and amount of time devoted to maintenance. The benefit of collecting this information is that MFD will have empirical data to determine vehicle turnover rates. Also, if MFD wants to expand EMS in the future, maintenance data is important for assessing the projected profitability of the unit.

• Additional personnel data: We recommend recording information on individual personnel, including the amount of time spent working on a med unit and the med unit they are assigned. Personnel data can be used to determine the relationship between employee turnover and total med unit runs. At this time we can only speculate about the impact that increasing the number of med unit runs will have on employee turnover and morale. It is possible that increased turnover and its associated cost would detract from the estimated revenue increase from increasing the number of calls and transports.

• Refusal of transport data: Lastly, we recommend that MFD inputs a refusal of transport code into their dispatch system. Based on the dispatch data that was provided, MFD cannot differentiate between an ALS-Downgrade and a refusal of transport. The benefit of having refusal of transport data is that MFD will be able to estimate the foregone revenue from their choice not to bill patients who refuse transport. Furthermore, refusal of transport data would allow for a more accurate estimate of the profitability of adding med units. We use the percentage of calls that are transported as an estimate of the number of transports a med unit can expect from increasing the number of runs. This assumption holds if there is no difference between the aggregate transport percentage and the percentage of ALS-Downgrades that require transport. Refusal of service data would allow for a more accurate estimation of the number of transports provided by a med unit and its profitability if it transported ALS-Downgrades.

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Capturing this process data will serve as a catalyst for better understanding the root cause of any future issues and aid in operational decision-making in a way that is objective and based on empirical evidence (U.S. Department of Transportation National Highway Traffic Safety Administration n.d.). Once a sufficient amount of data has been collected, MFD and EMS leadership will have a “baseline” against which they can set achievable performance improvement targets in order to motivate employees, minimize costs, and maximize efficiency (Hatry 2006). In addition, by collecting the process data described above, the Milwaukee EMS program will be able to compare its performance against that of peer organizations at the state, regional, and national levels. This program benchmarking will allow Milwaukee EMS leadership to both put the collected data into perspective (U.S. Department of Transportation National Highway Traffic Safety Administration n.d.) and understand what program aspects are performing well and which are in need of improvement relative to their peers.

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Appendix A. Milwaukee Ordinance Covering EMS Services and Rates

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Note: Page 190 only contains information that does not pertain to EMS service so it is not included in this appendix.

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Appendix B: Overview of Data Capture Process

When an asset is dispatched to respond to a call, the time and a code are processed by a computer. After this, the responders indicate that they are traveling toward the incident by pressing the “en route” button on their onboard computer. The dispatch system again records a time and the code associated with the asset being en route. The total time spent in the dispatch phase of the process is calculated by the computer by subtracting the time stamp for en route from the time stamp for dispatch. Responders then press another button to alert dispatch that they are on scene; the computer then calculates the time spent en route to the incident. We used the calculated en route time as the response time for EMS assets and the dispatch code as the time needed for a call to come into the dispatch center and for a unit to be dispatched.

From this point forward there is a departure in the process depending on whether the EMS asset is transporting the patient. If there is no transport, the EMS asset administers care and then presses a button alerting dispatch that they are returning to the station. The difference between the time when the “on scene” button is pressed until the “returning to quarters” button is pressed is the total on scene time for the call. In this case, the call sequence is completed, and we can calculate the total amount of time that an asset spent responding by subtracting the “returning to quarters” time stamp by the “dispatch” time stamp.

Conversely, if MFD transports the patient, the responders press the “transport to hospital” button, and the on scene time is calculated by subtracting the transport to hospital time stamp from the arrived on scene time stamp. Next, when an asset arrives at the hospital, the responders press the “arrived at hospital” button, and the total transport time is calculated by subtracting the “arrived at hospital” time stamp by the “transport to hospital” time stamp. Finally, when the asset is finished at the hospital, the “returning to quarters” button is pressed, and the total time at hospital is calculated by subtracting the “returning to quarters” time stamp by the “arrived at hospital” time stamp.

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Appendix C. Calculation of Med Unit In-Service Times The calculation of MFD capacity is based on all of the EMS dispatched calls from March 2009 through February 2011. Each step in the EMS response process is given a code and a time stamp for the duration that an EMS asset is classified under that code. In order to determine capacity of the med units, we calculated a yearly quantity of time that med units were in service.

The first step to calculating the total in-service time was to find an average duration that a med unit spent in each code. We only counted codes that are part of the med unit’s response and transport process. The codes counted are the dispatch time, the travel time to the scene, on scene time, transport time, and the time at the hospital. We removed any values from the data set that were greater than or equal to one day in duration and input missing values for any duration equal to zero. Our assumption is that any value over one day is an error. We also assume that durations equal to zero are legitimate calls but were recorded as zero through paramedic input error. Captain John Pederson noted that the data set would contain such errors if paramedics signal to dispatch in the wrong order or send a code twice. We multiplied the number of each code by the average duration in that code to determine a yearly quantity of time for each dispatch code. Finally, we summed each yearly quantity from the last step to determine an aggregate time that MFD med units were in service. Finally, we divided the aggregate in-service time by 715 to determine the daily in-service time.7

7 We used 715 because the data set spans from March 1, 2009, until February 14, 2011, or a total of 715 days.

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Appendix D. Federal Anti-Kickback Statute Case Section 1128B(b) of the Social Security Act, known colloquially as the “anti-kickback” statute, “makes it a criminal offense knowingly and willfully to offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program” (U.S. Department of Health and Human Services Office of Inspector General 2010). In the context of this analysis, then, MFD and city leadership might fear that an option that provides for reimbursement by private ambulance services to the city for dispatch costs may violate this federal provision. If such a system did in fact violate federal law, its implementation would be legally prohibited and, therefore, infeasible.

A U.S. Department of Health and Human Services advisory opinion issued by its Office of Inspector General (OIG) in 2010, however, provides insight into the legality of such an arrangement. In this case, officials in another municipality requested review of a similar public–private arrangement, in which the municipality maintained an exclusive BLS ambulance transport contract with a single private ambulance company. After nine years of this exclusive arrangement, the municipality then opened a competitive bidding process for a three-year exclusive contract, in which the selected private ambulance company would pay an annual dispatch fee, with the remittance calculated from a “percentage of the total staffing and building space costs for the Communications Center calculated to be devoted to EMS calls . . . based on historical call volumes” (U.S. Department of Health and Human Services Office of Inspector General 2010). The proposed contract did not fundamentally alter EMS delivery in the municipality.

The OIG advisory opinion found that the “Arrangement poses minimal risk of Federal health care program fraud or abuse” (U.S. Department of Health and Human Services Office of Inspector General 2010), based on the following factors:

• The Arrangement is part of a comprehensive regulatory scheme by the Town to manage the delivery of EMS

• The Ambulance Company has certified that the Arrangement provides compensation for the approximate costs of the Town’s call dispatch services connected with the Ambulance Company’s basic life support ambulance transport services

• The annual dispatch fee will not be tied directly or indirectly to the volume or value of referrals between the parties

• Because the Arrangement is limited to EMS and involves no substantive change in the dispatch procedures already utilized by the Town, the Arrangement is unlikely to increase the risk of overutilization and is also unlikely to lead to increased costs to the Federal health care programs

• The contract exclusivity should not have an adverse impact on competition • The remuneration in question (i.e., the annual dispatch fee) inures to the

public, and not private, benefit

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• The Arrangement does not represent a fundamental change in the delivery of emergency ambulance services in the Town (U.S. Department of Health and Human Services Office of Inspector General 2010)

Unlike the municipality evaluated in this report, however, we do not recommend engaging in an exclusive contract with any private provider. As a result, assuming the same logic can be applied to the City of Milwaukee, the risk associated with this option would potentially be even less than that the subject of the OIG report.

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Appendix E. Average Per-Patient Revenue The total MFD bills for transports is significantly more than they actually collect in revenue from patients and their payers. The discrepancy is because not all patients can or will pay their bills, and payers often have fixed amounts they reimburse for services which do not cover the full amount billed by MFD. Therefore, we calculate the average amount a single transport will collect in revenue so we can estimate the additional revenue gained from adding transports.

In 2011, MFD recovered $3,522,351 from resident patients, and $404,857 from non-resident patients, for a total of $3,927,208 in gross revenue from EMS transports (Advanced Data Processing, Inc. 2012). Based on the total number of resident and non-resident patients billed in 2011, this resulted in an average per-patient revenue value of $296.24 for residents, and $306.62 for nonresidents (Advanced Data Processing, Inc. 2012).

We create a ratio utilizing the total revenue to weight the resident and non-resident per-patient revenue values, assuming that the ratio of resident to non-resident patients will stay roughly the same both in the future and when transporting additional patients. The calculation results in the weighted average per-patient revenue for a MFD transport of $297.45.

$296.24$3,522,351$3,927,208 $306.62

$404,857$3,927,208 $297.45

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Appendix F. Yearly Amortized Cost of MFD Med Unit The total annual cost of a med unit allows us to easily and effectively compare the revenue and costs of MFD EMS transport and services. As storage and firehouse costs are shared between EMS units and the rest of the fire service, fire engines comprise the majority of the units being housed in the firehouses, and the houses would all continue to be operated independently of any med units there, we do not include any firehouse costs.

A brand new med unit currently costs approximately $200,000 and has an effective life of nine years (seven years main line, two years as a spare). The initial supplies required to fully equip a med unit is approximately $89,000. MFD does not currently track maintenance costs or operations costs of their equipment, and we were unable to determine any estimate of these costs from available information; therefore, we use $17,000, which was provided by the budget office, as the estimate for per unit maintenance and operations costs. MFD estimates yearly equipment costs per med unit of $25,000. Amortized over the life of the med unit, this results in a yearly equipment cost of $74,000 per med unit.

MFD has six paramedics who provide the staff required to operate a single med unit; two paramedics are on duty at any given time, working 24-hour shifts. The total annual personnel cost provided by the City of Milwaukee was $450,000 for these six paramedics; this value includes average overtime, special-duty pay, and non-wage benefits.

The sum of personnel costs and equipment costs results in a total estimated cost of operating a med unit for one year as $524,000. All data are from personal communications with MFD and City of Milwaukee personnel.

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Hatry, H. (2006) Performance measurement: Getting results. Washington, D.C.: The Urban Institute Press.

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