Government grows at expense of private sector

By DAVE LUBACH | April 30, 2018

The Sheboygan Fire Department recently marked its 10th year of providing emergency medical services (EMS) to the city’s residents. But not all of the parties associated with the decision are celebrating the milestone.

When the Common Council voted to roll EMS into the Fire Department and move on from a private ambulance service, there was plenty of outcry from critics on the council and in the city’s business community who wondered if it would be a successful money-making venture for Sheboygan and if private-sector jobs would be lost.

“For aldermen on the board at the time that had business experience, it was never an issue of providing a quality ambulance service,” recalls Ald. Jim Bohren, a frequent critic of the arrangement who was on the council then. “It’s the reimbursements and the city being in the bill-collecting business” that are problematic, he says.

In addition, Bohren says the council had concerns that the EMS arrangement was a way for the Fire Department to keep up its staffing despite the decreased fire calls. Last year, the department had 4,126 EMS calls and only 126 fire calls, a trend seen nationwide. Of the department’s total calls last year, only 2.4 percent were fire calls.

“I think there could be some reduction of staff without the ambulance service, but figuring the number is above my pay grade,” Bohren says.

Since taking on EMS in 2008, the Fire Department reports responding to nearly 35,000 requests for EMS and making 30,000 transports to medical facilities. The transports have generated revenue for the city that didn’t exist previously — nearly $7 million from 2013 to 2017, according to the department’s 2017 annual report. City budget allotments for the department have ranged annually from $7.4 million to $8 million from 2015 to 2018.

“We’ve brought approximately $8 million-plus in revenue into the city,” says Deputy Chief Charles Butler, the department’s EMS Health and Safety Emergency Management leader. “So if you look at it from a fire department perspective on what you’re paying for the fire department, it’s almost a buy seven, get one free.”

“We already had that infrastructure that the city was paying for, so for us to add that capacity, it was a no-brainer. We had the people in the stations that were trained. We had all this in place already, and with a little upgrading and training, we were able to add that service for the community,” he says.

“We were going to a lot of these calls already. The overall call volume at the time was a minimal increase. It’s just at that point we were now transporting to the hospital, and we had the ability to gain revenue from the transport,” Butler adds.

When the department took on EMS in 2008, it added four firefighter/paramedic positions. The department, which currently has 73.5 FTEs, is back to or below the staffing level before taking on EMS, Butler says.

The new revenue would not have materialized had the ambulance service stayed with Orange Cross Ambulance Service — co-owned by the city’s two hospitals, HSHS St. Nicholas Hospital and Aurora Sheboygan Memorial Medical Center. But some aldermen wonder if the arrangement is producing enough revenue.

“We only have a chance of receiving a full reimbursement on an ambulance call for 16 percent of the calls,” Bohren says. “Our ambulance service grosses about $3 million a year, and we’re only collecting $1.1 million or $1.2 million per year, so we’re only collecting a bit less than 50 percent of the gross billings.”

Medicaid and Medicare reimbursements and service for uninsured patients can reduce the amounts that ambulance services can collect.

Butler says the Fire Department, which uses a third party to handle billing, does the best it can to generate revenue despite the insurance obstacles. The city pays the third party 7 percent of the revenue collected.

“While there is not a good answer, there become workarounds,” Butler says. “Right now, when we bill out, a large portion of our demographic is Medicare and Medicaid, and they have mandatory write-offs. So we submit a $1,000 bill to them, and they’re only going to pay $200 to $300 and the rest we write off.”

The EMS service has proven its worth to the community, Butler says. A citywide referendum in 2010 approved of continuing the arrangement.

Still, some aldermen believe the department can do better. Ald. John Belanger led the efforts to pay a consultant over $50,000 to review the department. One of the areas of scrutiny figures to be the EMS arrangement. The results are expected in August.

“Is the ambulance service being accounted for correctly, and what are the true costs? Is it making money, breaking even or is it losing money? If we know that, then we can make the decisions going forward that maybe we should get out of it,” says Belanger, who recently lost a re-election bid.

 “I don’t care what comes out of the study; I just want an independent third party to give us a long-term plan to how we can use best practices and have a world-class fire department,” he says. “I’m not getting that from the union, who is obviously going to be skewed, and the fire chief, coming from a union background, it’s an incestuous relationship.”

Butler has been with the department for 24 years and worked for Orange Cross when he first arrived in Sheboygan in 1990. He has spent many hours trying to sell the public and city officials on the benefits of having the ambulance service as part of the department. And while he is not convinced the study is necessary, he is confident it will reveal that his department is doing just fine.

“I honestly think they are going to come back and go, ‘Wow, you guys are pretty efficient,’ ” Butler says.

Dave Lubach of Whitefish Bay is freelance writer.

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