If MedStar doesn’t receive funding from the city of Fort Worth next year, it could be forced to sell its north deployment center and cancel travel and education for employees, chief executive officer Ken Simpson told MedStar board members Aug. 23.
Simpson is preparing two budget proposals for the next fiscal year — one that includes hoped-for funding from Fort Worth and one that assumes the money won’t come through.
City manager David Cooke has proposed giving MedStar $4.2 million in the 2024 fiscal year to help the emergency medical services continue providing the same level of services amid rising costs. That funding would act as a stop-gap while Fort Worth conducts a third-party study of EMS servicesin the city.
A final decision on the funding won’t come until late September, when the City Council takes an official vote on the 2024 budget. If the council doesn’t approve the funding, MedStar anticipates passing a budget of its own with cuts in the following areas:
- Market adjustments to salaries
- Ambulance remounting
- Funding for electronic patient care reports
- Associate medical director staffing
- Employee engagement
- Infrastructure
By the end of the 2023 fiscal year in the fall, MedStar estimates it will hit a revenue of about $59.85 million compared to a total expense of $60 million.
Chief transformation officer Matt Zavadsky said the organization is planning for revenue of about $64 million in the fiscal year 2024 budget — funding from Fort Worth would be used to make sure the organization doesn’t fall into the red and have to dip into reserve funds.
“We’ve also gone back and looked at a couple of things,” Simpson said. “Just some of the accounts and things that we’ve typically written off, and [we’re] having some conversations with folks about where those dollars are. To see if there’s any opportunities for additional revenue.”
North deployment center could be sold
One of the biggest cuts — selling MedStar’s north deployment center — would reverse expansion plans started less than five years ago.
In 2019, MedStar broke ground on the 20,000-square-foot deployment center, which was lauded as an important investment needed to improve emergency response in the north by allowing paramedics to eliminate driving back and forth from the Fort Worth service area.
Zavadsky said the deployment center also acted as a recruitment tool.
What’s causing budget problems?
MedStar, like other EMS providers across the county, is facing increasing costs without accompanying increased revenue. Personnel, equipment, supply & fuel expenses are all rising. In the 2023 fiscal year, revenue per patient was less than the expense incurred by MedStar per patient. Collection rates are low, and a change to the Medicaid Ambulance Supplemental Payment Program reduced the amount of supplemental payments MedStar receives annually.
Ambulance renovations put on hold
Without funding, MedStar would also decrease the number of ambulances it intends to remount in the next year.
Remounting an ambulance means taking an existing box and placing it on a new chassis, or base frame. Those base frames often have a shorter life span than the boxes themselves, making remounting a cost effective way to avoid buying an entirely new ambulance.
The emergency medical services provider generally aims to remount or replace a quarter of its ambulance fleet each year, Zavadsky said.
Decreasing that amount in 2024 could throw off the system’s remounting schedule and increase maintenance costs in the future. Remounting generally costs about $100,000, he said, compared to $315,000 to purchase a new ambulance. As the fleet ages, more ambulances will need to be fully replaced rather than remounted.
“Ambulances, we beat the hell out of, because they run 24/7,” he said. “They’re also the most critical part of what we do, aside from the people, obviously, so we want to make sure that the fleet is reliable.”
With the funding, Zavadsky said, MedStar could remount 18 ambulances and stick to its current schedule. Simpson said the organization currently has 76 ambulances running, with another on the way.
Reduced staffing hours, ceasing electronic patient reports
Right now, MedStar contracts with two associate medical directors to work three days a week. Those associate directors provide credentialing, training and quality assurance services to the organization and its employees.
Next year, though, their work days might drop down to two, as part of the reduced budget. That decrease would slow the training process, Zavadsky said, as well as quality assurance efforts.
MedStar would also cease paying for electronic patient care reports for partner first responders if funding from Fort Worth doesn’t come through. Those reports, which allow for paperless patient data recording, cost $1 each — and in a system that handles hundreds of calls daily, the dollars can add up.
While the electronic reports save time and make data analysis easier, Zavadsky acknowledged that not all first responder crews currently use them. MedStar crews will continue to use the electronic reports.
Employee travel, engagement slashed
In both budget proposals, MedStar would reduce the amount of travel and education it offers to employees. The difference is a matter of degree.
With funding from Fort Worth, the organization would offer some travel and education, just a smaller amount. Without funding, it would cancel all travel and education plans.
MedStar would also cancel employee engagement opportunities, like Thanksgiving dinners for working crews, if the funding doesn’t come through. Zavadsky gave an example of taking paramedics to get popsicles from Steel City Pops after work as something that would have to end in the next fiscal year.
“Employee engagement is hugely important,” Zavadsky said. “We have to make work fun for them … Short term, we can probably survive [without]. Long term? Nah.”