Thursday, August 11, 2011

Will Paid Staffing Solve Our Problems?

Not a week goes by...
There isn't a week that goes by it seems that one or more of our clients doesn't call to inquire about numbers as they relate to pending decisions to add paid staff. It appears that the root of these discussion is new legislation arising in many States, like the new Act 37 EMS Act in Pennsylvania, tightening the screws on response times along with requirements to provide staffing rosters to local EMS overseers.

It's a big problem, especially for the smaller ambulance services. Faced with the dilemma of operating a relatively small, community-based, mostly volunteer ambulance service; many EMS organizations are looking to pay staff in order to avoid "scratching" or missing calls.

As a provider...
As a provider, I understand the concerns. We all know there are volunteer services out there that fully know they are understaffed. However, because of their pride in the organization and just the fact that there just aren't answers to adding volunteers in today's world where everyone works multiple jobs to make ends meet and have little time to take the necessary training, much less commit several hours of their day to doing "the ambulance thing," what recourse do community-based ambulance administrators have? The choice is to come clean with the community, admit the understaffing or hide the understaffing and then scratch calls on a regular basis. Eventually, some town father, the State EMS agency or even patients are going to see through the smoke screen and call the ambulance directors on the carpet for slow or no response times.

The "answer"...
So suddenly the "answer" is to begin paying people to man the ambulance. For many services it starts out slowly...the community-based ambulance will add one person during the critical daytime hours in hopes that the paid member can team up with a volunteer and complete the crew, instead of having to hope for two volunteers to answer the pager. For many small ambulance services that works for a time. It's a relatively cost effective means of helping to man the ambulance.

But, as time goes on, realistically in most cases necessary staffing includes the need for two people and so suddenly to make things work, the second paid person is added. Well that covers the daytime but then what about the overnight when all the volunteers must sleep in order to be awake for their "real" job? And we add more people on the payroll and then things start to get tight.

"If we take more runs we'll make more money..."
Unless the ambulance directors are good with numbers, I find that many times the heart overshadows the brain and thus overshadows the bank account. In an effort to staff the ambulance, directors now find themselves depeleting their company bank accounts at an alarming level, all in the name of ensuring that the ambulance gets out the door. "Well, if we take more runs we'll make more money". True, in part. But, as we all know in this business, not all ambulance trips equate to cashflow. So, the question ultimately comes down to will picking up the missed calls provide enough cash to fund the paid staffing venture?
Like stepping into quicksand the situation can suck an organization into the financial abyss quickly.

The drain on the company's reserves can happen fast. It seems for a time like a great relief. The pager goes off, paid ambulance crew snaps to attention, responds immediately and it's a very good feeling to hear the truck on the street- no doubt about it. But then comes the next Board meeting and you suddenly realize that there isn't enough money to fund the paid staffing, but now you're stuck. Go back to volunteers and the truck doesn't move. Stay with the paid staff and the truck eventually won't move because there won't be an ambulance company left to respond. The company will be bankrupt!

What's the answer? RUN THE NUMBERS!!!
First- figure out your highest potential call volume. If you've never responded to more than 400 calls per year, then even though your company scratched on 40% last year and you only answered the bell 240 times, then figure your potential to increase your revenue for the ambulance service by the number of calls you reasonbly expect to pick up by adding paid staffing. Remember, you'll still not be able to make all those runs in plan conservatively.

Second- run the numbers in dollars and cents, not in responses. INCREASED VOLUME DOES NOT ALWAYS TRANSLATE INTO INCREASED REVENUE! Ask your billing company (if you outsource and we suggest that you do - especially if you are a relatively small company) or billing person to arrive at how much you average per call. That is how much you collect in reimbursement dollars and do so by dividing the dollars you collected over a time period by the number of runs. Doing this allows you to arrive at an average per call and actually figures in unpaid or underpaid reimbursements.

Third- get some help! Unless you are an employment specialist or have some HR experience, we suggest that you solicit the help of a qualified consultant that can provide you with numbers for the unseen part of paying staff- the part that goes beyond just salaries or per hour wages. Figure in if you'll have to pay additional worker's compensation premiums for paid staff. Remember to calculate if you are going to provide benefits. What happens when Charlie calls in sick today and you have to contact Mary who is now over 40 hours and will be paid overtime....will your budget allow for such happenings (and they will happen). Oh and don't forget who's going to process the payroll, figure out the payroll taxes and get them filed and how much is all that going to add to the overall cost of the staffing initiative?

When is it just too much?
I guess in the end, small sized ambulance administrators of a community-based, volunteer nature have to ask which is worse- not crewing as an all-volunteer organization or breaking the bank by filling the staffing gap with paid personnel?

In my opinion, admitting to your community that there aren't enough volunteers but there also isn't enough money to provide staffing, isn't a bad thing. I'd much rather sit at a town council meeting discussing a lack of volunteers and how can the community help as opposed to announcing to that same council that there's no money left to run the ambulance because we precariously added paid staffing without figuring out first how to pay for those paid staffers.
But then again we all know that we have pride in what we do and we hate to admit when things are going well. So we look for a band-aid approach and then get into a scenario that is not easily reversed.

Also, along the same lines, I've watched small ambulance companies that truly want to provide their community with the highest level of care, mover into adding ALS services at even higher costs and really BREAK THE BANK! Key question to ask is what will our community reasonably be able to support based on the economic conditions of the area. Maybe it isn't so bad that the neighboring ambulance service is the ALS provider, even if they run into our territory every now and then.

Remember to use your heads!!
Use your the research. Reach out and ask your billing contractor, EMS consultants, sometimes even local government representatives such as Borough, Township or Town managers to give you a hand. Find someone who is willing to help you sort things out. You can appeal to your community to help you. You may be surprised at the untapped knowledge and resource of people right under your nose who will lend a hand in making key decisions as they relate to staffing- people like bank employees, local industry managers, the High School accounting teacher....tap the untapped resources in your community and by all means invite them to join your Board of Directors or Advisory Committee!

At Enhanced Management Services we do everything we can to support clients untaking new ventures. However, sometimes we just have to be blunt and burst the balloon of clients who think they can provide more service than is financially feasible. That's okay. Actually we suggest that you use a billing contractor who is going to be brutally honest with you.

Remember, your billing contractor has a direct effect and can control how much money flows into your organization. Hopefully, that contractor is doing all they can do to make those reimbursements happen at the maximum level (just like Enhanced does every day). But, that billing contractor has no control if you spend more than they can bring in. Look to your billing contractor for the numbers, not sugar coated and not inflated. Then fix your eyes on a plan that makes sense and don't look for a scapegoat.

If you go into a staffing arrangement, whatever form it takes, make sure you know the facts, know what it's going to cost and know that you can afford to pull the project off.
If you need us today. Use us as your next billing resource!
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