Letter to the Editor

Fee increase on ballot for south Sharp County residents

Wednesday, October 22, 2008

By Ed Ericson

A measure to increase the ambulance fee will be on the November ballot for residents of south Sharp County. The actual question is: Will south Sharp County be able to keep an ambulance service located within its district?

Since its start in 1988, the ambulance fee has been $20 per year. The proposed increase is to $35 per year. Inflation for the last 20 years has been 82.25 percent as per the Federal Reserve Bank. Also, labor costs have doubled and fuel costs have nearly quadrupled while the revenues from the fee have increased only 43.2 percent. By comparison, Izard County's ambulance fee is $50 per year.

In the mid 1980s, there was broad support for the establishment of a locally based ambulance service. Ambulance response times to accidents and other medical emergencies were lengthy as they were responding from Batesville. A board was established by a county ordinance to set up and oversee an ambulance service located in south Sharp County. Bids were requested in September 1987. On Oct. 12, 1987, the Independence County Emergency Medical Services Inc., instead of bidding to be a provider of this service, they stated they would stop responding to Sharp County.

Patterson Ambulance Service, a Texas Corporation, was contracted to provide locally based service for $36,000 a year starting on Jan. 2, 1988. Any emergency transport costs not covered by insurance would be covered by the $20 fee. The ambulance service was allowed to charge insurance companies for emergency service. Residents, including the uninsured, were not to be billed. The level of service was only Basic.

Patterson sold the local operation to Pledger Ambulance Service in February of 1990. Pledger increased the level of service to Intermediate. They operated for just a year before selling the operation to Johnson Ambulance Service which became Life Care EMS Inc. Lifecare EMS upgraded the level of service to Paramedic and relocated the station from a residential section of Cave City to the old roller skating rink on Highway 167 three miles north of Cave City to be more centrally located within the district. After 19 years, Lifecare Inc. went out of business on Nov. 15, 2006. Soaring fuel costs, increasing labor and medical supply costs, and falling revenues from Medicare/Medicaid with no additional funding from the county made it impossible for them to continue to operate.

From the beginning, the revenue stream to fund the ambulance service contract was inadequate. Data from the Assessors Office in 1986 indicated that there were 2,914 households. The amount of $20 for the fee was chosen based on that number of households. Taking delinquent fees and a set aside for a reserve into account, it was estimated available revenues to be $47,200 a year. However, actual revenues were significantly lower: $32,600 in 1988 and $32,730 in 1989. Revenue continued to rise but it took five years of having a revolving bank loan for the county to have enough revenue from the fee to cover the cost of the contract. In order to keep Life Care Inc. under contract, the contract price was increased to $48,000 per year in 1997. Revenues for the next four years were $44,210, $39,740, $41,560 and $40,840 respectively. Though revenues continue to increase, to date they have not reached the $48,000 a year needed to sustain a cash flow.

Bids were received from Vital Link Inc. and Spring River Paramedic Service to take over the service from Life Care Inc. Both stated that the $48,000 was not adequate to support locally based service. Both indicated that they knew the county's ability to increase the contract price was dependent on increasing the ambulance fee paid by the residents. They knew the process to change the fee was lengthy and were willing to accept $48,000 for the first year.

Even if the contract cost remains the same, the fee revenues, $46,680 in 2007, don't cover that cost. The fee increase needs to pass in order to keep ambulance service for south Sharp County residents.