City will contract out ambulance services
by Ryan McDonald
As part of the transition to the Los Angeles County Fire Department, Hermosa Beach will seek bids to contract out ambulance transport services in the city.
The City Council last month voted to pursue the contract option over four other possibilities. Other options included a city-administered program staffed by Hermosa employees, or ceding control of the ambulance program to the Los Angeles County Emergency Medical Services Authority. The selected option represented a middle ground for the city’s oversight of the ambulance program.
The decision will not impact the arrival of first responders when the city switches over to the county department next year. They will still respond to local medical emergency calls from the existing fire station. Rather, the decision governs ambulances for transport to area hospitals for further medical services, which typically arrive several minutes after first responders.
Currently, all Hermosa Beach firefighters are also paramedics, and the city staffs an ambulance with two firefighter-paramedics. The city also has a contract with Torrance-based McCormick Ambulance to provide ambulance services for less serious emergencies, and when units from Hermosa or Manhattan Beach are unavailable. Under the contracting option, Hermosa will still be responsible for providing ambulance services and will set performance benchmarks, but the company chosen will be responsible for day to day operations.
Fire Chief Pete Bonano told the council that the city has identified three goals for selecting an ambulance transport system: maintaining level of service, fiscal sustainability, and retaining “201 rights,” a reference to a section of the state Health and Safety Code that allows cities, like Hermosa, that oversaw prehospital emergency medical services prior to 1980 to continue to do so. Ceding control to the county now would have meant that Hermosa would surrender the right to offer its own ambulance service in the future. The city hired a consultant to examine the various options, and the contracting option emerged as the most prudent financial choice, Bonano said.
“It became pretty clear which one made the most sense,” he said.
Manhattan Beach paid 35 percent of the cost of the feasibility study, and the proposal seeking bids will include language that will allow Manhattan to take advantage of the services provided by the winning bid, said Mike Boyd, emergency medical services battalion chief for the Manhattan Beach Fire Department.
Bonano’s recommendation swayed all but Councilmember Hany Fangary, who cautioned that by contracting out the service, the city was facing an increasingly consolidated ambulance transport market and that a bid process would not necessarily lead to a competitive offer. McCormick last month announced that it was merging with American Medical Response (AMR). Only days before that, AMR announced that it was merging with Air Medical Group Holdings, a subsidiary of New York private equity group KKR & Co., to create a $2.4 billion “integrated medical transport company.” Given the service demands that Hermosa would likely include in its request, Bonano said he would be “surprised” if someone other than McCormick submitted a bid.
Fangary said he would rather have gone with a city-administered program, which he argued could be more responsive to city needs.
“We will only have one viable contractor… McCormick’s is McCormick’s. They have a monopoly, almost. So we’re either going to give them the work, or we can do it ourselves,” he said.
Hermosa’s program is a revenue generator for the city, bringing in about $500,000 per year, according to the city-sponsored study. This amount is unlikely to change under the contracting option, but this figure does not account for the staff time of firefighter-paramedics who man the ambulances. Bonano said in a study session last year that if the city were to break out costs, the program would have a shortfall of several hundred thousand dollars per year.
Under the contracting option, the city has the possibility of netting some revenue with the program if the winning bid comes in under $500,000. Bonano estimated that the city could collect as much as $100,000 per year.
Bonano told the council that the contract would be a more efficient use of resources. Ambulances often sit unused for periods of time, while at other times simultaneous emergencies force the city to rely on the existing contract with McCormick, or on help from Manhattan.
In Manhattan, Boyd cited the expanded resources during emergency “surges” as the reason why Hermosa’s decision will not change things for residents served by the MBFD.
“In fact, we see it as an opportunity to improve services. We have a limited number of resources here locally. A company with multiple ambulances, in the event that we were to have two or three calls right at the same time, they would have the depth of resources to be able to respond,” Boyd said.