Competitive forces help spur innovation in all avenues of our lives, both in the public and private sectors. When looking to improve the cost-effectiveness of governments, for example, public-private partnerships can bring competitive bidding processes and performance-based measures to ensure taxpayers get the most for their money. Private ambulance services, relied upon by many California cities for decades, are no exception.
Ambulance companies try to outdo each other to provide these critical services to taxpayers. As part of the agreements with local governments, ambulance companies are subjected to strict performance objectives, usually based on rapid response times and quality standards to ensure they’re serving the public interest. Unfortunately, California Assembly Bill 389, which recently passed 67-0 in the assembly and is now in the state senate, would undermine accountability by eliminating competition and installing an anticompetitive “fire alliance” model.
Today, local emergency medical services (EMS) agencies that contract out ambulance services are required to hold an openly competitive process. Typically, EMS agencies request proposals from potential partners. The submissions are evaluated and scored to ensure the winning bid gives taxpayers the highest level of care at the best possible price. The final contract sets standards for the EMS company and establishes fines and penalties if benchmarks aren’t met.
Supporters claim AB 389 is a bipartisan reform that better aligns fire departments and ambulance services. In reality, it’s a cynical power grab that eliminates competition and accountability by replacing competitive bidding with a subcontracting regime where local fire departments can effectively hire themselves or their preferred partners.
California’s EMS regulatory authority recognized the fire alliance model’s major flaws when it arose in Contra Costa County several years ago. “A state agency has determined that the county should not have partnered with a private ambulance company before awarding itself a competitive contract” because the California Emergency Medical Services Agency’s “investigation found the county colluded to suppress competition for an exclusive ambulance contract,” the East Bay Times reported.
That’s one of the problems with this model—the game can essentially be rigged. And in many cases, the longer-term game for fire agencies is to completely take over a region’s emergency medical services themselves.
For example, over the past year, Chula Vista entered an alliance model contract with the same company that had provided its ambulance services since the late-1970s. But the city raised rates drastically to $3,881 per ambulance trip—the ambulance company actually received $1,720 per trip while the fire district got the rest. Then, after raising prices, the fire department convinced city leaders that, rather than hold another competitive bidding process, it could ‘save money’ by being the exclusive ambulance services provider.
Allowed to borrow millions of taxpayer dollars, along with grants that are unavailable to non-alliance private ambulance providers, the Chula Vista Fire Department’s fuzzy accounting should be viewed skeptically by taxpayers. Chula Vista Fire Chief Jim Geering claimed government-run ambulances would “save the city costs associated with outsourcing the service to a private company, quicken response times, reduce the cost of ambulance rides to residents, and give the city a new revenue stream.”
When we have data to revisit those claims in a few years, it’s likely Chula Vista’s EMS costs will have risen while the supposed cost savings fail to materialize. Free of any competition, the fire district has little incentive to save money or meet those goals. Whereas the private ambulance company previously working for Chula Vista could be terminated if it failed to deliver, do we expect the Chula Vista Fire Department to fire itself if it doesn’t keep its ambulance-related promises?
Fire departments play an important role as first responders. But if they want to take over ambulance services too, they should outperform and outbid competitors, not block qualified EMS providers out of the process. For state lawmakers, AB 389 would be a mistake. It reduces competition and accountability in a crucial field where just a few seconds can be the difference between life and death.
A version of this column originally appeared in the Orange County Register.