Tuesday, January 24, 2017 - Updated: 9:40 AM
By Rachel Keller Collins
Marshall County Judge-Executive Kevin Neal last week presented a letter to the commissioners that would terminate the agreement between the county and Marshall County Hospital which has managed the ambulance service for approximately 21 years, effective July 1, 2017. The three commissioners did not approve the letter and its content and instead tabled the discussion until the Feb. 7 meeting.
Neal said, “The reason why we bring this up, I’ve talked to several people in the community as far as the ambulance service and when we have an ambulance service that is being managed I think especially when we have an agreement that’s been dated since ’96, we definitely have to look at it and review it but we need to make it about the ambulance service. It’s kind of like 911, if you don’t call 911 until you need it, you want it to be there. Same thing with the ambulance service; when you call it you want it to be there.”
Neal told the court he wants to put out a request for proposals to see if they “can get some feedback from other companies that actually manage ambulance services, make it more competitive, make it more specific to the ambulance service that we provide in Marshall County.”
He cited a “shortfall in personnel” at the ambulance service as a concern, which he said is a nationwide issue, saying competitors are “drawing resources away from us.” He said he believed being more competitive would attract more potential employees.
Neal said it currently costs the county $202,000 a year for the hospital to manage the ambulance service. He said because the county, and not the hospital, own the capital in the service, the service would be more marketable and enticing regarding locating new interested parties for management.
“There are shortfalls when a hospital manages an ambulance service—sometimes that ambulance service is, I won’t say that ours is, at the bottom of the list,” Neal said. “But I think the employees and the ambulance service we provide to the citizens in the community need to look at our ambulance service so that’s why I bring it to the table for discussion.”
During discussion, the commissioners expressed a number of concerns including the potential for this search to backfire on the court and that the letter, which was dated Jan. 10, appeared to them as if it had been sent without their approval. Commissioners Johnny Bowlin and Rick Cocke also expressed displeasure with not having been informed of the details of the letter prior to the meeting.
Neal assured them the letter had not been sent and Assistant County Attorney Jason Darnall said what they were seeing was the date the letter was drafted at the request of Neal.
Commissioner Bob Gold said he was not opposed to reviewing the contract but expressed hesitation with the language of the letter, the word ‘termination’ specifically, saying he wanted the court to take plenty of time to hash out all possible “implications” of such a move before making it.
“I do believe when we say we’re going to terminate this agreement that we need to take enough time to look at all the implications of terminating that agreement and the possibility that we may have to become the management of the service ourselves, the county would have to. Other counties do. But we may or may not get an acceptable contract and if that contract is terminated we might have to be the actual entity that operates the service,” he said. “We have a significant number of employees and their benefits, a number of them have already retired, there’s dollars, there’s implications on the retirement system and what we have to pay into it. I don’t have any problem with us trying to renegotiate, we’ve talked about doing that in the past. It says, ‘terminate,’ and I’m not sure we’re prepared.”
Marshall County Hospital CEO David Fuqua said he first learned of the letter last Monday when Bowlin stopped by to ask if he had received it but wasn’t able to provide any details. The details of the letter, he said, he heard for the first time during an interview with The Tribune-Courier Wednesday morning.
Regarding the decision to terminate the management contract, he said that’s entirely up to the Fiscal Court and the hospital will, as always, congenially cooperate to the best of its ability. But he did say Gold was right that there is quite a bit that goes into the ‘management piece’ of the ambulance service that needs to be considered.
First to consider, Fuqua said, is how tightly intertwined the workings of the ambulance service are with the hospital. He said the ambulance service is not considered its own entity but rather another service, another department “within the continuum of care” that’s offered to patients the hospital serves. When the hospital first took over the ambulance service, he said, the employees were county employees but after the contract was signed in ’96 the new employees hired on were absorbed into the hospital’s payroll. There are a number of other aspects, rules and regulations, that play into having the ability to manage an ambulance service that have nothing to do with payroll or benefits as well, he said.
“Right now we have a medical director that’s under our ER contract, that’s how that’s structured. The drugs, we have specific policies and procedures that happen in order for them to replenish their drug supply when they use them or dispense them out in the field. So there will have to be something set up for those two aspects of course,” he said. “We follow up on their licenses, but I think the other thing you have to think about too with the hospital is how intertwined they are with us at this point. Their FICA (social security tax), their worker’s comp, malpractice insurance, all those things are intertwined with the hospital at this point. And it’ll take a little bit, if the Fiscal Court wants to undo it, it’ll take us a little bit of effort to get that undone.”
Fuqua said something that’s often overlooked also is the amount of overhead not allocated to that department including human resources (HR), which translates to no cost for HR services; no payables; no payroll; and the time spent overseeing that department by upper management such as Fuqua, the Chief Financial Officer who oversees all financials, or the Chief Clinical Officer who oversees the clinical end of the service. He said the hospital also recently changed the billing structure, which required quite a bit of time for negotiations and setup, that also benefited the ambulance service.
“Typically what you would assume is the management agreement is there to provide for certain oversight aspects and overhead aspects and that’s really, to a great degree, what that is; that management fee is our time that we’re doing internally to do these functions for them on their behalf. That’s part of it,” he said. “Then there’s the cost associated with the drugs, we don’t charge those off. We just take those into the P&L of the hospital like we do for all other departments.”
Fuqua said he’s worked at several hospitals in his career and only one of those ran a for-profit ambulance service. He said for the most part hospitals consider the ambulance service “part of the continuum of service,” knowing they’ll likely just break even or maybe lose a little at the end of the year.
“If we wanted to run this tight as a nickel, we could. We could take down one of the three ambulances that we have running 24-7, we could take one of them out and that would make it much, much more profitable because then you eliminate 8,760 hours times two people and a rig. But we just haven’t felt that was something we had to go to that degree to do at this point,” he said. “We, under this management agreement, if we lose money on the ambulance service then the hospital loses money on it. If I really wanted to make money on it, that’s what I would do but it’s not something we have to do at this point and I just don’t think it’s in the best interest of the community at this point.”
Fuqua said he did speak briefly with Darnall Tuesday afternoon and agreed to allow an extension to March 31 for the Fiscal Court’s contractual notification date but knows nothing else regarding what to expect in the coming weeks or how it will work because there had been no attempt for communication from Neal’s office to him.
Fuqua said, “All I know is per a phone call [Tuesday] that said the county wanted to extend the timeframe for the termination of the contract and I agreed to that. As I said, we’re willing to work with the county any way we can. I’ve showed them ambulance numbers time and time again. I’d be glad to do it again. But the bottom line is, if they want to terminate that’s fine. If they’re going to do some requests for proposal then is somebody going to let us know that or do they just want us out of it? I guess that’s the real question.”