Calif. City Could Gain Second Ambulance Service

Sept. 18--An ambulance company that has enjoyed the exclusive position of providing all medical transportation in Riverside for more than 30 years may face competition Monday, when city officials will consider another firm.

American Medical Response, or AMR, holds a contract for nearly all 911 ambulance service in Riverside County, but non-emergency transport -- the "retail" side of the business -- is an open market with multiple providers in every city except Riverside.

Since 1989, Riverside's municipal code has given the City Council the right to control who runs non-emergency ambulances in town. Any company can apply and several have over the years, but to date, AMR is the only company to be granted permission.

Corona-based Mission Ambulance, the latest to seek entry to the Riverside retail market, is making a full-court press, pledging to relocate its headquarters and a training center and to buy alternative-fuel vehicles if its application is approved.

The debate over the need for another ambulance service has highlighted concerns that Riverside's policy limits competition, because it prevents new providers from coming into the city if they threaten the existing company's business.

Councilman Paul Davis said it may be time to reevaluate the city's ambulance franchise policy.

"It's a monopoly that's been created where I don't see any real justification for a monopoly," he said.

FINANCIAL THREAT?

In most of Riverside County, non-emergency ambulance companies simply make their own contracts with hospitals and care centers. In the city of Riverside, they can't operate without a franchise agreement approved by the council.

When considering applications, the council relies heavily on the findings of the fire chief, and the chief looks at three criteria: Does the company meet certain safety and legal requirements, can it show a need for its services and would allowing it to operate "threaten the economic viability of the existing franchisee(s)."

Riverside Fire Chief Steve Earley is recommending Mission Ambulance's application be denied.

Although Mission provided letters of support from care centers, Earley said it didn't prove its services are needed, and he has had no complaints about AMR.

"The facts don't show there is a public need and necessity," he said.

The financial consideration is "a lesser point," and it's hard to say how much retail business AMR might lose if it had to compete with Mission, Earley said. But in his report to the council finance committee, the chief concluded allowing Mission in would hurt AMR economically and could have a negative effect on emergency services.

Mission officials disagreed, noting that AMR is a multi-state company that recently took on more emergency service by purchasing a small ambulance company in Blythe.

"They serve 2,200 other communities, so there's no way one community would put their company in jeopardy financially," Mission Vice President Tom Clowdus said.

A survey in Earley's report indicates 10 care centers and two hospitals said they are satisfied with AMR's service, but Mission has questioned those results.

M'Lyssa Dyer, assistant administrator at Chapman Convalescent Hospital, said her staff hasn't complained about AMR, but she believes there would be a benefit to having another ambulance service.

Karen Roberts, spokeswoman for the Kaiser Foundation's Riverside hospital, expressed similar sentiments.

"We have received good service from AMR," Roberts said, but added, "We do feel that we need additional providers for the (non-emergency service)."

Thomas McEntee, AMR's general manager for Riverside County, declined to comment until Monday's meeting.

PROFITABLE SERVICE

Earley and Bruce Barton, Riverside County's emergency medical services director, said even though the emergency and "retail" aspects of ambulance service are handled differently, it's hard to completely separate them. An emergency provider must take every patient, even if they can't pay, so companies turn to retail services to cover those losses.

"The 911 provider really does need to get a decent share of what we call 100 percent guaranteed paid business," Barton said.

He said AMR claims to recover 40 cents for every dollar it bills on emergency services, but 2010 financial statements the company gave the county don't separate the two sides of the business. Those statements show $5.9 million in profits, or about 5.8 percent, for the year.

The issue is further complicated by a special contract the city has with AMR. It sets the company's required emergency response times at just under 12 minutes rather than just under 10 minutes; in return, AMR gives the city $1.4 million a year for equipment and training for the city's Fire Department paramedics.

Earley said the deal allows the city to give residents superior emergency service.

That contract is not connected with the non-emergency business at all. But some council members seemed confused about the relationship, and Mission officials say it creates a conflict of interest for the fire chief when he reviews ambulance franchise applications.

"I feel as though I am the plaintiff and AMR's the defendant and the judge is the fire chief," said Chris Hartsock, Mission's chief operating officer. "The defendant gives the judge $1.4 million a year and the council expects a fair trial."

Mission Ambulance gave $1,500 to Davis' campaign fund this year. Finance records filed with the city don't show that Mission gave money to any other council members, but they do list contributions from AMR to every sitting council member, including Davis.

Councilman Andy Melendrez, a member of the council's finance committee that will make a recommendation Monday on Mission's application, said more questions are being raised about the city's policy now than in the past. He wants more information from those who use the ambulance services before he decides.

"If we're going to change providers or look to add one, I would like to get a better feel for what the patients are saying," he said.

Councilman Chris Mac Arthur, also on the finance committee, declined to discuss the issue, saying, "I'm not going to comment on city policy when we're not in a meeting."

Davis, who won't be part of Monday's decision but will vote when the issue comes to the full council, said the policy is too subjective, and he believes there is a need for another ambulance provider.

"The only one who benefits out of competition is the consumer," he said.