- Nearly 70% of Michigan counties have ambulance ‘deserts’ where response times exceed 25 minutes, most of them in rural areas
- The biggest expenditure for EMS agencies is keeping crews staffed and ready to go round the clock
- Rural agencies face a compounding financial crisis: low call volume, unreliable public funding, service competition and low insurance reimbursement
The arrival of an ambulance can make the difference between life and death. And in rural Michigan, there’s lots of real estate to cover, and every second counts.
In a state speckled with “ambulance deserts,” from southeast Michigan to the Upper Peninsula, where many residents live more than 25 minutes from the nearest ambulance station, emergency medical services remain limited for some, and few people want to step into roles that can help.
In addition to a shortage of staff, rural EMS providers tell Bridge Michigan their agencies face systemic financial challenges:
- Insufficient call volume to cover the cost of serving large geographic areas
- Insurance reimbursements that fail to cover the cost of care
- Hospital consolidations and closures that threaten systems
- Limited and inconsistent public dollars for support
In some rural communities, one solution has been to band together to coordinate services.
“Those communities are so small, they might not necessarily have the revenue — or the call volume to create the revenue — to sustain a full-time operation just by themselves,” said Angela Madden, executive director of the Michigan Association of Ambulance Services. “We have a lot of townships or smaller communities that will have one truck or two trucks.”
Vacancies, longer wait times
The state has about 65,000 residents living in “ambulance deserts” in mostly rural settings, according to the American Ambulance Association. Vast swaths of the state are affected: Nearly 70% of Michigan’s counties have such areas, which are far removed from life-saving transportation services.
The Upper Peninsula’s EMS system is “overextended,” according to UP Health System CEO Tonya Darner. “Patients continue to experience prolonged transport times, persistent staff shortages and inadequate reimbursement,” Darner told state lawmakers in January, with the Marquette-based hospital system increasingly serving as a “backstop.”
Even in rural communities that are relatively closer to hospitals and clinics, there’s still not enough paramedics and emergency medical technicians, or EMTs. The state has more than 500 vacancies.
In southeast Michigan, Monroe Community Ambulance is in a “good staffing spot,” according to president and CEO Ron Slagell. The EMS agency has 63 full and part-time paramedics and EMTs, but is still short on senior paramedics.
“We’re in a much better spot than we were three years ago,” Slagell told Bridge Michigan.
Coming out of the coronavirus pandemic, a period that saw a tremendous dropoff in EMS staffing, the Michigan Department of Health and Human Services dedicated $30 million toward scholarships and training stipends, which Slagell calls a “critical” effort to address shortages.
But the state grants are drying up. Without more support, those working in Michigan’s rural ambulance services describe a system whose shaky funding is hard pressed to prop up a diminished EMT/paramedic pipeline.
As head of Emergent Health Partners — the parent company for Monroe Community Ambulance and rural EMS agencies in Albion, Jackson, Battle Creek and Coldwater among others — Slagell notes that revenues are failing to keep pace with rising expenses.
“EMS is kind of in the crosshairs of the challenges that our entire health care system in our country is facing,” he said.
‘Cost of readiness’
For rural EMS systems, there’s “a lot of dirt to cover” and not a lot of call volume to support the placement of rigs and staff.
Tri-Hospital EMS in St. Clair County covers 650 square miles of mostly rural land and about 160,000 individuals, according to president and CEO Ken Cummings.
“We don’t have a lot of competition because our community and our EMS system cannot afford competition,” Cummings told Bridge Michigan.
Despite the distance between calls, gas mileage and wear on vehicles are not the most expensive cost for Tri-Hospital EMS, which averages about 23,000 runs every year.
The biggest expenditure for ambulance care in both rural and urban communities is the “cost of readiness,” Cummings explains. That is, making sure ambulances are staffed, equipped and ready to go at a moment’s notice, and sustaining the salaries for EMTs and paramedics.
No transport, no reimbursement
Smaller operations mean cash flow is tight. Most of an agency’s money comes from insurance reimbursement, even though the cost of readiness is “paid for upfront,” said Madden, the ambulance association executive.
Insurance providers generally focus repayments on ambulances that move patients from one destination to another. Madden describes a recurring scenario with vehicle accidents to illustrate the point: An EMS crew is called out to a crash but determines the individuals involved do not require transport to a medical facility.
“There is no reimbursement for that time,” she said, even though the ambulance used gas, equipment and staff to cover the call. “Tying up advanced level resources” can also pull paramedics away from other emergencies, further burdening rural systems with limited staff.
Rural EMS leaders say most of their patients are on government insurance like Medicare or Medicaid and that the plans pay less than the cost of providing the service.
The average advanced life support ambulance call in Michigan costs $1,500, Madden explains, but the average reimbursement from insurance is about $300 to $500.
Michigan’s Medicaid program, for instance, reimburses $364.93 for an emergency advanced life support call, according to the state’s January ambulance fee schedule. Rising costs for wages, fuel and medical supplies contribute to the problem.
“Insurance companies, including the public payers, have to start recognizing that the costs associated with that readiness, the costs associated to upfit that truck, and the costs associated with the human knowledge that is on board that truck has increased,” Madden said.
Mergers and taxes
Rural EMS agencies also have to contend with bigger health care dynamics that extend beyond their backyard.
The Clinton Area Ambulance Service Authority is a St. Johns-based municipal agency covering 14 communities located in the northern half of its mid-Michigan county.
The authority was met with a “totally unexpected” drop in calls after the University of Michigan Health moved in next door following its acquisition of the Lansing-based Sparrow Health System.
“It took about a third of our call volume away,” Lynn Webber, Clinton Area Ambulance Service Authority’s director, told Bridge. “Cash flow-wise, it was just a huge, right-in-between-the-eyes blow.”
UM Health-Sparrow took over hospital transfer calls that made up a sizable chunk of the service authority’s revenue. That led Webber to cut a 12-hour truck shift.
Now, the Clinton County ambulance service has only two 24-hour rigs to cover about 26,000 people. Both trucks were sent out on calls during Bridge’s interview with Webber.
“If something else comes in … one of our neighbors will have to come help us,” he said of a potential third emergency.
Hospital consolidations and closures are rapidly shaping the state’s health care landscape and EMS agencies rely on close proximity to health systems to keep travel short. The Pittsburgh-based Center for Healthcare Quality & Payment Reform estimates 15 rural hospitals in Michigan are operating at a loss, with three at immediate risk of closing.
Webber worries federal cuts to Medicaid could be “really difficult” and a rise in uninsured people would “make things worse” — rural health policy analysts anticipate an overall reduction in services to navigate the decline in reimbursements.
State funding is not adequately addressing the “lack of compensation” for EMS agencies, according to the Michigan Association of Ambulance Services, which admonished state lawmakers and Gov. Gretchen Whitmer in October for not addressing repayment costs in the state budget.
In the long term, Webber is hoping for legislation to force insurers to improve their share of funding and believes “community paramedicine” — in which ambulances make regular, non-emergency visits to patients’ homes — could be the “future of care.”
In the meantime, he’s asking the 14 municipalities that make up the service authority to chip in to fund his “bare bones” budget today — he’s looking to increase the current local rate of $17 per capita to $45.
“Nobody in the community wants their taxes to go up,” Webber said. “But they want an ambulance service.”
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