Eastern Marshall County EMS 10 Year – Part 2
In this final article we’ll present information regarding the final three headwinds faced by Eastern Marshall County EMS.
Addressing Low Operating Income
Revenue from the emergency services and ambulance transports provided is very low. Reimbursements from insurance companies, governmental agencies and private pay patients only covers about 39% of the cost to perform those services. This is a major challenge for all EMS providers. For example in 2024, these entities were billed $730,000. We were paid only $286,000. Mandatory governmental write-offs for Medicare and Medicaid exceed $452,000. As a condition of accepting those insurance coverages, we cannot request payment from the patient for the difference, hence, the write-offs. No EMS entity can survive in this environment without revenue from other sources. In the case of Eastern Marshall County EMS that is through real estate tax distributions assessed by the fire districts for ambulance services. These real estate distributions represent approximately 60% of the revenue needed to cover basic daily operations. There is little, if any, left for the acquisition of expensive lifesaving equipment that needs to be replace or new technology that should be available on every rig (e.g. Lucas Device for CPR).
Our recovery (payment received/billed amount) has improved from ~32% in 2022 to the current 39%. The reason is that EMC-EMS was able to enroll in the Illinois Ground Emergency Medical Transport program. This program only applies to Medicaid claims. Basically, the Illinois Department of Health & Human Services on an annual basis calculates our cost per run based upon cost information we provide. For 2024 that cost was $1,200 per run. HFS then splits the cost difference between the calculated cost and actual reimbursement paid by Medicaid. So if we received $300 from Medicaid, we split the $900 difference. We had 61 Medicaid claims last year resulting in an approximately $25,000 additional revenue. For your information, your EMS responds to over 500 calls on an annual basis.
The opportunity to increase revenue from emergency services and transport is low. Our concern is for the unknown cost impacts we might feel as the Federal and State governments address their budget issues, or issue new mandates. Time will tell and we will respond accordingly.
Addressing New/Replacement Equipment & Funding Issues
The issues of funding and the acquisition of new or replacement equipment are related and presented together as they affect Eastern Marshall County EMS as well as most rural EMS. As noted above, the issues with low operating revenue not providing the cash flow to fund equipment acquisition is real. The revenue received basically “keeps the door open”. Medical equipment is expensive. A new ambulance costs around $250,000; a transport cot is about $34,000, a Lucas CPR device is another $35,000, a 15 lead monitor/defibrillator costs $20,000 and so on. Without a significant, constant positive cash flow, it is impossible to purchase or obtain a loan to acquire what is needed. The challenge becomes finding opportunities to raise the capital required for their purchase.
The two most common ways to obtain funding is through community fundraising and various grants. Funding raising projects are difficult on both the service members and community in general. Our last project for a new rig was only fully successful due to receiving over $100,000 from the COVID relief fund. The competition for grant funding is highly competitive. Although we have applied time and again for major grant funding, we have not been awarded any significant monies to purchase needed equipment. We have received several smaller grants for training and funds toward the purchase of smaller items like AED’s and IV pumps.
The Board of Directors recently adopted a third, long term option to provide consistent funding for capital equipment. Last June, the Board established an EMC-EMS Sustainability Endowment Fund through the Community Foundation of Central Illinois in Peoria. This Foundation manages over 350 endowment funds. CFCI is a 501c3 non-profit entity certified by the Alliance of Illinois Community Foundations and is in compliance with the National Standards of the U.S. Council of Community Foundations. Their 20 member Board of Directors has fiduciary standing and CFCI is audited annually. Their leverage comes from pooling all the resources of all the endowments to achieve the highest possible return. They average a 6% annual return and utilize David Vaughn Investments (a top 100 Financial Advisory Firm) for strategic investments.
The Board of Directors has established a goal of growing the “Sustainability Fund” to $1,000,000 long term. Achieving this goal would provide EMC-EMS with over $50,000 annually, which then can be used to acquire the needed equipment. We realize the goal is ambitious, but an acorn does not grow into huge oak tree overnight. Everyone in our communities has the need to maintain a viable emergency/ambulance service when the unexpected happens. Therefore, we are asking those who have the means to consider helping in achieving this goal. There are many ways to contribute to the endowment fund. People who must take mandatory withdrawals from an IRA or other plan could make a tax free donation through a Qualified Charitable Contribution. A bestowment in an inheritance plan is another way to provide for the community and create a legacy. Regular tax deductible contributions to the endowment are another option. The point is donations to the Fund, large or small, will grow over time, doubling every 10 to 12 years depending upon the rate of return. Bottom line, once the goal is achieved; your EMS will have the capability to acquire the needed equipment when you need it.
Hopefully you found these updates about your emergency/ambulance service informative. The Board of Directors, the Operational Leadership Team and Service Members are committed to your safety and well-being. We are hopeful the strong headwinds we face along with our other rural EMS brothers and sisters will turn into a gentle breeze for us. As we celebrate our 10th anniversary, we look forward to our future together. Thank you for your continued support. Remember…Stay Healthy; Stay Safe.