Ambulance service faces fiscal concerns
A budget storm building over taxpayer-supported West Side Community Ambulance has prompted a rate increase, closer scrutiny of expenses and investigations into new ways of drumming up revenue.
And, as part of the budget-related conversation, neither the sale of the former West Side Community Hospital building or a campaign to increase the Measure A tax rate are out of the question.
Officials say the financial health of the West Side Community Healthcare District, which runs the ambulance service, has taken a turn for the worse in the past two years – and they are looking for measures to stabilize the situation before it becomes even more critical.
“We have to stop the bleeding,” declared Eric Watts, chief of operations for West Side Community Ambulance. “If we can get on it now and make some hard decisions we can make it happen. We can stop the bleeding and build a better system as well.”
A number of factors are contributing to the financial dilemma in which the district finds itself.
Revenues fell short of projections last year and are expected to drop again this year, according to budget estimates, while operating expenses are climbing.
Tax revenues are offsetting a good portion of the shortfall – but even with those monies, the district’s preliminary budget projected a $240,000 deficit for the current fiscal year.
That comes after a year which saw net losses of nearly $375,000, dropping the district’s reserves to the ballpark of $900,000 going into the current fiscal year, according to district staff.
And, the district is now bracing for the potential impacts of a 10 percent reduction in Medi-Cal reimbursements as well – which would be retroactive to June 2011.
Roberta Casteel, administrative assistant for the district, said the federal government has indicated that it may step in to make up some or part of that budget hit.
For now, though, the true impact of the cuts – and whether the district will in fact be reimbursed – remains to be seen.
“Is it going to be a wash?” Casteel questioned. “That is something we are working on.”
Reimbursements are already an ongoing concern for the district, which receives about 25 cents on the dollar for what it bills.
“It’s not just Medi-Cal. Private insurance is not paying,” noted board member Barbara Hutchins.
The cost of operations is rising, with personnel accounting for the bulk of expenditures.
Personnel costs will increase this year, after the district filled an assistant chief of operations post and added the administrative assistant position, which has become a full-time post.
Those moves, said Hutchins, were crucial to district operations and have paid dividends.
“This team has worked so well to try to make things better. I see operations getting better and better all the time,” she stated.
What is certain, emphasized Watts, Casteel and district board members George Schmidt and Hutchins (who comprise the district budget committee) in a recent meeting with Mattos Newspapers, is that the district cannot stand by and watch its reserves dissolve into a sea of red ink.
The district has looked at expenses large and small taken a number of steps in efforts to improve efficiency, from cutting costs on floor mats to more aggressively pursuing bad debt.
“We are trying to be very careful, and are looking at things one by one,” Hutchins explained.
And in mid-September, the ambulance service raised its rates for the first time in three years.
But those steps, the officials said, are not going to come close to erasing the shortfall.
More drastic measures are going to be needed, the officials said.
The district is considering its options for the former hospital building which serves as its headquarters, and is looking into a community “subscription” program which would serve as ambulance insurance of a sort for those who buy in.
Both were expected to be topics of discussions when the board convened Tuesday night (Sept. 24) for its monthly meeting.
Talk has also surfaced of charging for “dry runs,” or calls which do not result in patient transports.
Watts said he has mixed feelings on that avenue.
“If we go out and check somebody’s blood pressure, I don’t think we should charge for that. If we do procedures that involve intervention but don’t transport, then I think there should be a charge,” he commented.
Watts expressed optimism that a successful subscription program would go far in righting the finances for the ambulance service.
Ultimately, though, the district may ask voters to increase the annual property tax which supports ambulance operations.
That may depend in large part on the success of a subscription program, and the impact of the Medi-Cal cuts, the officials said.
Approved in 1984, Measure A is capped at $40 a year for single family homes and 10 cents an acre for ag land.
“I think (the budget challenge) is still manageable if two things happen, that the subscription program works and that some of the other things that we are in the very preliminary stages of talking about come to be,” Schmidt commented. “We may have a structural deficit for another year or two, but I think it can be pulled out, without being exorbitant to the public.
“We may have to ask for a tax increase,” he continued. “As far as I’m concerned, it is still on the table until we see what Medi-Cal does to us.”