Testimony submitted to the California State Senate Committee on Rules regarding Assembly Bill 389.
Competition and innovation are essential to improving the public services relied upon by the citizens of California. When government agencies enter service contracting arrangements, competition is vital to ensuring agencies get the best value for taxpayers. California’s emergency medical services (EMS) agencies are no exception and have relied on competitive forces to contract ambulance services from both non–profit and for-profit providers for decades. Assembly Bill 389 (AB 389) would eliminate this competition and threaten effective EMS contracting practices.
Local emergency medical services agencies that contract for ambulance service are currently required by state law to subject such contracting decisions to an openly competitive process where potential providers submit proposals for the privilege of providing the service. Typically, this comes through the use of a “request for proposals” (RFP) process, combined with an evaluation and scoring system that ensures taxpayers get the best arrangement for their tax dollars.
Assembly Bill 389 would eliminate the requirement of competitive bidding for ambulance service contracts and replace it with a subcontracting regime where fire agencies would act as local EMS agencies, without the need to competitively bid contracts. This process has been dubbed the alliance model. The subcontracting regime established by the alliance model is a mere setup for a fire district-based EMS, including ambulance service, that wouldn’t require the fire district to submit to the competitive process that has served California’s EMS and ambulance service well for over 40 years.
The California Emergency Medical Services Authority, EMSA, the state’s EMS regulatory authority, recognized the anticompetitive nature of the alliance model for EMS services from the start in Contra Costa County. While the fire alliance model remains in place in Contra Costa, EMSA referred to the process that led to the adoption of the alliance as “neither fair nor competitive” and it discouraged all but the fire district’s already-chosen alliance partner from participating in the contracting process, effectively eliminating any semblance of competitive bidding.
Other locales have or are attempting to implement their own fire-based EMS alliance regimes without any competitive pressure. These locales include Alameda and Sonoma counties, as well as the cities of Chula Vista and Oxnard.
Fire-based EMS proponents cite potential cost savings over competitively-bid contracting models, but a closer look at Chula Vista’s transition from subcontracting to a full fire-based EMS shows why those claims rest on questionable numbers. While the current full fire-based EMS rate of $2,800 per trip is a little over $1,000 less than the $3,881 rate established under the fire alliance subcontracting model that only lasted a few months there, it is important to understand where that money goes. Of the $3,881 figure, the contractor only received about $1,720, while the fire district received the rest. The $2,800 rate goes completely to the fire district, so citing a $1,000 savings lacks a basic apples-to-apples comparison. Indeed, the $2,800 figure more than doubles what other fire departments in the same county are providing for their transport services (about $1,300, on average). Chula Vista even levies a sales tax for public safety, of which none is being used to lower the high rates that Chula Vista patients get charged for EMS services.
The purported savings also hides the fact that fire agencies already receive considerable taxpayer resources through general revenues—even for emergency medical services functions for which they are already charging more than their peers—as well as millions from intergovernmental transfers. A.P. Triton, the consulting firm that has produced favorable reports on switching to the fire-based model, cautions against using intergovernmental grants for estimating operating costs, saying they “should not be considered part of the revenue stream for a stable system.”
No one doubts that fire departments and fire districts have an important role to play in EMS delivery as first responders. Fire agencies may even be capable of managing ambulance services, but the fire-based alliance model assumes that capability without putting fire districts through a proper vetting process. Taxpayer dollars are on the line here and the failure to secure good contracts means already scarce resources get stretched even thinner. If fire districts are capable of administering ambulance services, then they should be able to demonstrate that without trying to find a regulatory back door to avoid the same oversight and vetting required of local EMS agencies. Ambulance providers, including some fire districts, have been entering performance-based contracts for decades and this process has served California citizens well.
California Assembly Bill 389 would eliminate any need for a competitive bidding process for ambulance services, erase decades of effective contracting practices and threaten the quality of the EMS services citizens rely upon.