History says ambulance profits are not likely

Friday, November 4, 2016

Editor's Note: This is the third of a three-part series examining the issue of ambulance service in eastern Carroll County, and a proposed ambulance district that would serve that portion of the county.

The owners of Ozark EMS say they are making a profit providing ambulance service in eastern Carroll County and believe they can continue to do so.

But at least one local businessman familiar with the history of ambulance service here says it has never been a profitable venture, and he's skeptical that it ever will be on a long-term basis.

Richard Harp, who has operated an insurance agency in Berryville since 1958, was chairman of the original board of directors for Carroll General Hospital when it opened here in 1969.

Before the hospital was built, Harp said, ambulance service was provided first by a local funeral home and later by two separate private companies, neither of which continued the service for more than a year.

After the hospital opened, Harp said longtime county judge Arthur Carter approached the board about the hospital operating an ambulance.

"He came to us and asked us if we would operate an ambulance out of Carroll General Hospital and we said yes, but we don't know if it's gonna fly because ... people had gone out of business trying it," Harp said. "So he agreed to subsidize the hospital whatever money we lost, so to speak. It was kind of what they call a handshake or gentlemen's agreement. There was nothing written down, no papers signed."

Harp said the hospital raised funds from the community to buy an ambulance and operated it for many years, with the county covering any financial losses.

"It didn't lose the money then that it does now," he said. "Of course, we only had one ambulance, though we did have 24-7 coverage at the hospital with people being there."

After Carter -- who was first elected in 1950 -- left office after 28 years, his successor as county judge did not want to continue the arrangement, Harp said.

The county went through a series of private ambulance service providers until St. John's -- which is now Mercy -- took over operation of the hospital. When the final private ambulance service providers pulled out, St. John's offered to provide the service.

"We were tickled to death that somebody would take it over, because we needed ambulance service," Harp said. "They ran it for years until this situation came up a couple of years ago with Judge Barr and his so-called threat from the Mercy people."

Harp was referring to a December 2014 meeting between Barr and Mercy officials. At that meeting, the Mercy officials presented Barr with a document indicating that Mercy's ambulance service here lost a total of more than $2.1 million in the six-year period from the beginning of 2009 to the end of 2014 -- including more than $500,000 in 2014 alone.

Barr, who said he felt threatened when Mercy officials said they might have to discontinue ambulance service here without some sort of county funding, authorized Ozark EMS to begin accepting emergency calls east of the Kings River on an alternating basis with Mercy.

Mercy, which said Barr's move exacerbated its financial losses, stopped providing emergency ambulance service here earlier this year.

Harp, who served on a citizens advisory board appointed by Barr to make recommendations to the quorum court regarding ambulance service, said he doesn't believe a private ambulance company can survive long-term without some public funding.

"It's never been profitable," he said. "It's never been a long-term thing. Even when Mercy had it, they lost money early on but I guess they got where they couldn't stand this $500,000 a year or whatever they said they were losing."

* * *

Critics of the proposed ambulance service district and accompanying 2.5-mill tax increase in eastern Carroll County say the the county should not interfere with "free enterprise." But in some neighboring counties -- and even in western Carroll County -- public funding for ambulance service is an accepted practice.

An ambulance service district was established in western Carroll County in the 1990s. The district is funded by a two-mill tax on residents in that portion of the county who live outside the Eureka Springs city limits (voters inside the city pay a municipal tax for ambulance service), and service is provided by Eureka Springs Fire & EMS through a contract with the ambulance district's board of commissioners. Patients who use the service are billed, as well.

District 1 Justice of the Peace Jack Deaton, who served for 16 years as chief of the Holiday Island Fire Department and was with the department for more than 30 years altogether, said funding from the Western Carroll County Ambulance District has allowed first responders from that portion of the county to become some of the most well-equipped in the country. The eastern Carroll County proposal also includes funding for first responders.

Deaton said Eureka Springs' EMS services are also extremely well-equipped because of the funding provided through the WCCAD.

"This has allowed them to have the very best equipment," he said.

On the other hand, Deaton said the current arrangement in eastern Carroll County, with ambulance service provided by Ozark EMS, seems to be working well.

Madison County operates its own ambulance service, funded through a county-wide sales tax and collections from patients who use the service. There are two teams of paramedics and emergency medical technicians on each of three shifts, and each shift works on a schedule of 24 hours on and 48 hours off.

Madison County Judge Frank Weaver said the system works very well in his county, thanks in large part to Emergency Medical Services director Robin Umland, whom he credited with ensuring that the county's ambulances are replaced regularly and outfitted with the latest equipment and technology. Weaver said a properly equipped ambulance can cost between $200,000 and $225,000.

Providing quality emergency medical service is a necessary but expensive endeavor, Weaver said.

"It just takes quite a bit of money," he said.

In Benton County, unincorporated areas are served by eight ambulance service providers under contracts with the county. Seven of those are municipal ambulance services. Northeast Benton County has an established fire/EMS district. A county-owned ambulance, operated by Mercy, serves the southeast portion of the county.

Marshall Watson, the county's public safety administrator, said a countywide millage covers half the cost for the contracts for ambulance service. In 2017, he said, the county budget has set aside $1.8 million for emergency medical services

"This system has worked extremely well for us," Watson said.

Boone County officials could not be reached for comment by press time.

* * *

The proposed ambulance service district that is on the Nov. 8 general election ballot in eastern Carroll County would be funded by a 2.5-mill tax increase that is included in the ballot issue. A "Yes" vote would indicate the voter's support for both the ambulance district and the increased millage.

A mill is equal to one-tenth of 1 percent and the millage tax is paid on the assessed value of a particular piece of property. In Arkansas, the assessed value of a piece of property is 20 percent of its appraised value. Thus, a 2.5-mill tax on a property with an appraised value of $100,000 would equal $50 per year.

If the majority of voters vote "No" on the proposal, an ordinance approved by the quorum court to create the ambulance service district would be rendered invalid and there would be no tax increase.

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