Firefighters face new threat: private 911 service
2011-05-23 - 11:05:09 - Current News
SAN FRANCISCO/NEW YORK ? For-profit ambulance companies present American communities with an offer that's hard to refuse these days. They will take over 911 emergency rescue service at little or no charge to cash-short cities and counties and promise to bring down labor costs spent on public employees. But leaders of this growing industry face an unusual business obstacle: Sooty firefighters, who are among the most potent symbols of American trustworthiness and selfless valor. Faces of the public sector The end of an era? Public union workers have become targets of politicians, pundits and ordinary citizens who think their salaries are too high and their jobs too cushy. Loud and clear A Connecticut fire dispatcher says his union wages have kept him solidly 'lower middle class." But, he says, "I didn?t take this job to get rich." Trash talk A Delaware sanitation worker considers taking a second job to make ends meet. He bemoans shrill anti-union talk: "They don?t know half of what our jobs entail." Taught a lesson A Wisconsin teacher wonders ? four years into the career she's wanted her entire life ? if she made the right choice as the state attacks her union. For the men and women in fire departments, this is no drill. With fewer fires to fight as building codes have improved, providing emergency medical service has become a big part of what they do. The upshot has been numerous clashes pitting private players against fire chiefs and the influential union, the International Association of Fire Fighters. The biggest U.S. private ambulance provider, American Medical Response, has been engaged in a particularly fierce battle with firefighter unions around Las Vegas. It's gotten so rough that a company general manager there was recently recorded describing a plan to make the North Las Vegas union chief look like "an absolute a--hole." And while AMR president Mark Bruning called that choice of words "unacceptable" in a Reuters interview, the company notes in its regulatory filings that in many communities, its most important competitors are the local fire departments, which have expanded into emergency ambulance service "and do not wish to give up their franchises to a private competitor." The battle over who should answer the call for 911 comes as AMR, smaller rival Rural/Metro Corp. and others in the sector are growing fast. Ambulance providers make their money primarily by billing government healthcare programs, private insurers or patients for the rides. Facing stiff budget restraints and more than usual anti-tax fervor among voters, state and local governments are under pressure to turn more services over to private industry. At the same time, an aging U.S. population is expected to need more ambulance care in the coming years. Private ambulance companies are growing at a time when public-sector unions are under broad assault, epitomized by recent moves by the state of Wisconsin to strip the collective bargaining power of public-employee unions. The controversial Wisconsin law excludes firefighter unions, but a similar measure in Ohio extends to almost all state employees. Advertise | AdChoices Tensions with firefighters aren't the industry's sole problem. A Federal Bureau of Investigation raid on a Rural/Metro office and a Department of Justice inquiry also loom. Last month, the U.S. government sued Rural/Metro, joining an Alabama lawsuit brought by a former company employee who contends the company filed bogus reimbursement claims with U.S. healthcare programs Medicare and Medicaid for transporting dialysis patients when it was not medically necessary. Such accusations raise questions about whether some private ambulance fleets could cost taxpayers in other, less obvious ways - a charge denied by the industry. Rural/Metro, in response to the Alabama case, said it maintains "a very comprehensive compliance program" and intends to defend itself in the lawsuit. Index Last Change RURL 17.08 -0.01 -0.06% EMS 63.96 +0.01 +0.02% Quotes delayed 15+ min. Big investors are undaunted, and U.S. buyout shops are jumping into the sector. AMR's parent, Emergency Medical Services Corp, and Rural/Metro Corp, both recently signed deals to be bought by private equity firms. Clayton Dubilier & Rice is buying EMS Corp for about $3 billion, while Warburg Pincus is paying about $438 million for Rural/Metro. Rural Metro's largest shareholder is another ambulance company: Europe's Falck A/S. Falck has acquired emergency service companies in southern California and the East Coast. Falck also is expanding in other regions, including Latin America. Falck's largest shareholder, investment firm Nordic Capital, has said it hopes the company could have an initial public offering as soon as this year. Fragmented market In the United States, an estimated 40 million ambulance trips a year are handled by public entities, private providers, hospitals and volunteers -- or sometimes a combination. In total, at least $14 billion is spent each year on U.S. ambulance trips. EMS is a relatively young field. It began to come of age in the 1960s, when nonphysicians were trained in emergency care. From the beginning, there has been private involvement. The for-profit ambulance industry largely grew out of the funeral home business, which used to carry sick or injured people to hospitals in hearses. Some of the companies have been around for a long time. Rural/Metro, founded in 1948, began as a private fire protection company and still earns about 15 percent of its revenue from fire services. Falck dates to 1906, when its founder established the first rescue service in Denmark. Like Rural/Metro, Falck says it has had little problem working side by side with public-sector firefighters, though all the major private players in the industry say they are careful to go into communities where they are wanted and stress that ambulance providers are governed by strict regulations. Advertise | AdChoices "You cannot just take a truck and show up tomorrow and run 911 systems," said Michael DiMino, president and chief executive of Scottsdale, Arizona-based Rural/Metro. The 19-year-old AMR, based in Greenwood Village, Colorado, has had the most notable tensions with local fire services. In North Las Vegas, the fire department usually arrives first on an emergency call, and hands over patients to AMR for transport to the hospital. While people on both sides describe positive relations among private-sector emergency workers and firefighters in the field, the union branches in Southern Nevada run a Twitter feed devoted to the company's safety record: @LateFor911. An attempt by the fire department to take over AMR functions stalled in North Las Vegas last year. Experts dispute that for-profit providers put the public at risk.