Anyone who knows me knows I am passionate about emergency services. It’s one area where a community needs to come together to prepare itself and be able to respond when needed. Whether it is routine calls, or a major event, organizations must work together to be prepared to provide the services necessary to protect life and property.
Currently the City of Delta Junction is negotiating with Delta Medical Transport (DMT) to have DMT continue its contract service to provide emergency medical services in the area.
We must first ask ourselves, “Who is responsible for providing emergency medical services to the community?” There is no right answer to this question. Models of all types exist around the country and the world. In many cases, it is somewhat government based, as it has been in Delta Junction for some time.
The City of Delta Junction has provided EMS to the community for years. It was done through a volunteer squad, with expenses paid by the City and patients billed by the City for many years until the then administration and council destroyed the now defunct Delta Junction Rescue Squad.
Delta Medical Transport at the time was working with Family Medical Center – which was the only medical clinic in Delta Junction – to provide patient transports to Fairbanks.
Exactly how discussion began between DMT and the City to become partners in the provision of emergency medical services is not clear. Rural Deltana Volunteer Fire Department had approached the City about combining fire and EMS into a single organization for the entire community, but the City was not interested in having that conversation.
When discussion took place in council meetings, one question that was asked was, “Should the City be providing EMS to the entire community?” Legally, the question is moot, but since the City receives over $1 million annually from the federal government in the form of a payment in leu of taxes (PILT) for federal land in the area – land that doesn’t fall within the city limits – the City should provide such services. The payment is provided to help offset such services to communities with federal land that can’t be taxed.
Why is all this important today? If you saw the article in this issue, DMT’s contract with the City expired at the beginning of the month, and negotiations are underway to develop a new contract. The problem is, the way the City began the contract several years ago was flawed, and the problem has now expanded and become a point of contention.
Instead of contracting for services in the standard way by writing a request for proposals and bid documents, the City chose to utilize a provision in city code that allowed it to skip formal bid procedures for, “Professional or consultant services (such as legal, medical, or education services).” City Code 1.41.035(i).
Such provisions are common and are generally used so that a government can select someone to provide services to it on a professional level, such as the need to have employees receive physicals, without having to bid for the services. In this case, the City used the provision to contract for services provided to others, which is where the problem begins.
It gets sticky when the services are provided to others – i.e. the patients – and the company providing the services is, in turn allowed to bill the individuals. The company, in this case DMT, is providing the actual service to the patients, not the City.
How do you decided the amount the provider of the services should receive from the City when the City isn’t actually receiving the services and the individual actually receiving the service is billed for the services? Additionally, there is no fixed number of service events.
Had the City retained the operation of the emergency medical service, including billing – which, by the way, was in chaos when the City was handling it – then the City could have entered into a clean contract with DMT to provide a particular level of staffing at a fixed cost, with the variables such as other operating costs and income falling upon the City.
This would have resulted in DMT providing only professional services as the code allows, not a complete set of services based around the professional services of the medical provider.
A similar situation exists with schools, where the funding for the schools is based upon the number of students, but the variables in cost are great. As a result the State built a complex formula to account for those costs and allow each school district to operate independently, and hope for the best in having enough funding to operate. The same exists with EMS; DMT is faced with operating at a certain level, but has no idea what its income will be because they do not know how many “students” or patients they will have during a given period of time. Thus, the contract payment by the City to DMT.
DMT originally asked for $80,000, and through negotiations, agreed to $52,000 per year. Changes were made to the original contract allowing the City to provide some of the supplies and cover some costs through grant funds and the payment was reduced to $25,000. Now that the grants have expired, the cost of these items has fallen back to DMT. DMT has asked that the City to now pay $50,000 per year.
During Council meetings there have been questions about how much money does DMT make. In other words, how much profit does DMT make, and how does it relate to the business as a whole and to its operations in Fairbanks and Glennallen.
That’s none of the City’s business, unless they write a contract that requires that information. Cost plus contracts are not uncommon, and often require financial information to support the payments. In other words, a suitable contract for the City would have been a contract that guaranteed a profit for DMT, while covering the cost of operating. DMT would still bill patients, but the amount billed and collected would be known to the City, and would figure into the payment made by the City.
The City chose instead to pay a base fee, provide other forms of support, and allow DMT to collect from patients. A great contract for DMT, because if you aren’t making a profit, you just ask for more money from the City. The City’s options? Pay the additional fee or loose the service to the community.
I applaud Tony White, the owner of DMT, for the service DMT has provided to the community. We have some of the best first-line emergency medical care in the state that parallels, or may be better than, service provided in much larger or more urban areas.
The original agreement between DMT and the City was created in haste, with not enough negotiation to make it adequately protect both parties to the contract, and most importantly the community. The City must decide if it wants to continue with the same arrangement – the City pay a supplement and let DMT run as a private business – or – the City take over service and allow DMT to provide fixed services at a fixed cost, with the City assuming the risk of whether revenue covers cost.
You can’t have it both ways.
Disclosure: The author is the Assistant Chief and Board Member of the Rural Deltana Volunteer Fire Department and responds on a volunteer basis through that organization in mutual aid support of DMT and other emergency service organizations in the community.