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Original post made
on Jul 30, 2013
When this story hit the "air" a week, or so, ago, I "googled" around to see if there was a back story that might explain what was going on a RM (Rural/Metro). I didn't find anything at the time, but today, someone in Arizona had this to say about RM:
Moody's Investors Service downgraded Rural/Metro Corporation's ("Rural/Metro") corporate family and probability of default ratings to Caa2 from B3. In addition, Moody's lowered the senior secured credit facilities to B3 from B1 and the senior unsecured notes to Caa3 from Caa2. The ratings outlook remains negative.
It seems that RM was bought by Warburg Pincus LLC not too long ago, taking the formerly public company private.
It would be nice if the County would provide some transparency into this situation by providing details about RM's performance in the execution of its contractual obligations.
Rural Metro's performance and slow response time was news last Spring. Here's a link to a story from April in the SJ Mercury: Web Link
Santa Clara's effort on a backup plan to cover for a collapse of Rural Metro was in the papers and TV last week. Here's another SJ Mercury link that talks about Rural Metro's issues in Santa Clara: Web Link Pretty scary when an ambulance can make it all the way to an emergency room, but can't open the doors on the ambulance to get the patient into the hospital.
I'm surprised Chief Nickel put the third ambulance at Station 2. Wasn't that site already hosting Palo Alto's Medic 2? It appeared Medic 3 was being staffed by personnel from Station 5 on Arastradero yesterday, but maybe I heard the fire radio traffic wrong.
Where are the "outsource everything" and "fire 'em all" crowds? This is the false economy of outsourcing. Lack of control and lack of dependability are high prices to pay for relatively small reductions in labor costs--especially in the public safety and welfare functions.
Palo Alto often responds to emergencies on Highway 101. Do we, or could we get state funds to help pay for this service?
The reason to take a publicly-traded company private is generally to load it up with debt (including the debt of buying it), pocketing the money from laying off people and selling assets, and walking away, leaving them to sink or swim. This was Mitt Romney's "business" model that made him very rich. So it looks like this company has reached the "sink or swim" stage.
Seems that there is quite a bit of infomation on the Santa Clara County web-site and Rural Metro--
SCC Negotiating With Rural Metro:
"Although there are differences in the two corporations, there is no evidence to substantiate that Rural/Metro cannot perform up to the standards of the contract, as they do around the nation," said County Executive Jeffrey V. Smith. "We have conducted an extensive review of their operating and financial capability and are satisfied that they can meet our requirements.
Rural/Metro also proposed utilizing a state-of-the-art automated vehicle location system, which will integrate with the County's computer aided dispatch system. The system will provide real-time analysis of historical call data, current ambulance location, and traffic congestion. Together, this information will aid in the efficient management of ambulance resources to assure that the high call volume areas can be covered by available ambulances.
(Continuation of above posting)
There also are in-the-field performance data available on the County web-site--
SCC Awards Ambulance to Rural Metro:
SCC EMSA: Semi-Annual Report:
Complience Summary (5/01/2013 - 5/31/2013):
Complience Summary (2/1/2013 thru 2/28/2013):
From this data, it's clear that Rural Metro has been delivering at/about the 100% rate for on-time responses for a long time. (See the 2012 County EMS Semi-Annual Report, and this year's monthly reports.)
The idea that Rural Metro is putting its client's lives in danger due to non-perfomance is clearly a non-starter. If the issue is one of the County's being concerned about perceived financial problems with Rural Metro due to its missing a bond payment--then that's one thing. But to claim that it's operating "recklessly" (or some such) is another. (Notice the on-time stats for some of the County fire departments.)
This story needs better media attention than it is getting.
From this data, it's clear that Rural Metro has been delivering at/about the 90% rate
Give it time, folks. Give it time. I live in a neighborhood that had an AMR ambulance stationed here 24/7. I have yet to see a Rural/Metro ambulance in the local fire station.
That 3rd ambulance is staffed with Engine 2 personnel. When in service, Engine 2 is out of service.
Troy, thanks for the info.
The Daily Post published some additional information in this morning's paper. Given that the performance data published by the County shows that R/M has been delivering on-time service in the 92%-94% level, any concern about the quality of service of R/M would seem unfounded. Supervisor Simitian is quoted as saying: "It is now exceeding the times set in the contract".
(When I tried to access the contract, which was linked to in one of the 2010 press releases on the County web-site, that link was dead.)
The opening paragraph of the Post's article reports R/M had not paid $2.5M for various charges owed the County, and other local agencies. According to the Post, these outstanding bills have been paid.
The Post article concludes: "There is no crisis. If someone dials 9-11, the person will get an ambulance, today, tomorrow and the following day."
Does make one wonder if this is a manufactured crisis? If so, to whose benefit?
Wayne, I'm confused by your post. Rural Metro won the contract for Santa Clara County over AMR. Their contract gives them an exclusive franchise for their service in Santa Clara County except for Palo Alto. Rural Metro's bid was significantly lower than AMR because they claimed that their "cost recovery" of their $1,200+ service would be much better than AMR was historically able to do. Adding more controversy, the deciding vote for Rural Metro in Santa Clara County was cast by Mr Shirakawa. Mr Shirakawa has since been convicted of multiple criminal felonies and ethical violations and is awaiting sentencing. The SJ Mercury News recently investigated Mr Shirakawa's interactions with Rural Metro prior to casting his deciding vote: Web Link Their investigation did not reflect well on Mr Shirakawa or Rural Metro.
Among many things, Santa Clara County's contract requires Rural Metro to respond within 12 minutes to 90% of the their calls. Failure to do so results in fines. Rural Metro incurred nearly $5 million in fines because they were unable to meet this response requirement. The contract also specifies that Santa Clara County and surrounding agencies provide dispatching services for Rural Metro. The company was billed for these and other services by the Country, but had not paid. Furthermore, Rural Metro missed a bond payment to shareholders, had their Santa Clara employees authorize a strike vote and apparently failed to properly maintain their ambulance equipment in the County.
If Rural Metro had failed to make the payment they did this week, they would have been in violation of their contract with the County. This was not a "manufactured crisis." Had Rural Metro not paid, there were only two alternatives. The first would have been to drop Rural Metro, take possession of their equipment and find a new provider. Since it took almost a year to make the conversion from AMR to Rural Metro, this would have been a bad situation for most of the residents of Santa Clara County. The second option would have been to let the County cover the costs themselves and hope that Rural Metro would somehow improve. Given the company's financial situation and Rural Metro's existing performance record in Santa Clara County, this doesn't seem likely. But, by making the payment this option still remains viable and the County doesn't have to eat the costs.
Wayne, where exactly do you believe that Rural Metro got a bad deal? Rural Metro obviously severely underbid their Santa Clara County contract and compromised service to the residents of the County to compensate. Rural Metro has never disputed their failure to meet the response requirements set out in their contract. Your statement: "The idea that Rural Metro is putting its client's lives in danger due to non-perfomance is clearly a non-starter" is completely in contradiction to the facts. While their 90% numbers have recently improved, Rural Metro should have never been awarded the contract in the first place. AMR had problems too, but they were never this bad.
> I'm confused by your post.
And I'm confused about what are confused about. You have posted a goodly amount (of unsourced) information, which one would assume you believe. Other than your question to me in your last paragraph, you seem to be fully "non confused". I
> where exactly do you believe that Rural Metro got a bad deal?
The media treatment covering this "non-event" has been shoddy. The details from the information on the SCC web-site is quite impressive, compared to the press coverage. The article in today's Post seemed adequate, however.
> Rural Metro obviously severely underbid their
> Santa Clara County contract
And you know this how? Are you the comptroller of R/M? Unless there are press releases from R/M to that point, the best one can do is speculate about the profitability of this account. You seem to be beyond speculation in your statement.
> Rural Metro has never disputed their failure to meet the response
> requirements set out in their contract.
If you say so. However, the County negotiated a requirement that the response times be published on a monthly basis. These monthly reports are available on the SCC web-site (see links in previous postings). From various press releases, R/M is supposed to have not been in compliance in the early months, but has been routinely demonstrating > 90% in recent months. To fully understand their performance, it might not be that hard to pull down all of these on-time performance reports to see just how many months these folks have not been hitting 90%.
Nowall of the information that we need to fully appreciate this situation is not readily available. For instance, if an ambulance is "late" by 20 seconds, say, it is "officially" latebut so what? Therefore--we need to really get the actual response time data, and do a full analysis of that data to see just how "bad" things are.
And then, given that Santa Clara County is pretty large, it might pay to see if the calls that exceed 12 minutes (per contract) are in hard-to-get-to places. If they are, maybe the County should grant the service a little longer time for their threshold time-to-respond?
Other issues need examinationsuch as equipment availability. Is there a maintenance problem with the equipment used by R/M? Every vehicle has maintenance issues. What's the availability factor for R/M's SCC fleet? If there are problems, how does equipment factor into lateness?
And the 12 minute contracted response time number should be examined for realism. Everyone wants transport to the hospital as quickly as possible. But if the threshold for R/M (or any ambulance service) were raised to 13 minutes, what would be the impact on patient health? And what would be the impact on R/M's "late numbers"?
And while we're talking about ithow many people have died waiting for R/M ambulances? If the answer is Zerothen maybe their service, even when late, isn't to be considered detrimental to patient health. The Post quotes a SCC representative saying: "there is no crisis".
As to R/M's not paying a $5M bill, this seems like little potatoesand hardly enough to precipitate a takeover of the service. Given that the City of Detroit is in the process of trying to walk away from a $18B bill, owed to over 100K creditorsthe R/M lateness in settling this particular bill in a timely fashion seems difficult to see as anything by normal business.
If SCC wants to dump R/M, then I submit tht there are issues not on the table. I have no stake in the R/M issue--I'd just like to see honest reporting .. that's all.
Seems that County has provided us with a goodly amount of data about their Emergency Services operation--
SCC EMSA Semi-Annual Report (May, 2012):
SCC EMSA Semi-Annual Report (November, 2012):
BTWthere is a lot of interesting information about R/M's performance in SCC Emergency Medical Services Agency report from 2012. Anyone really interested in this situation should take a couple of minutes to review this report.
It's a shame that the media didn't dig into this a little more than they did.
Here's an interesting tid-bit:
Regarding: Status of Rural Metro as Santa Clara County's Exclusive Operating Area Ambulance Provider
This letter serves to state the status of Rural Metro as the exclusive provider of 911 and emergency ambulance service within the Santa Clara County Exclusive Operating Area (EOA). During the past two to three months, persistent rumors have circulated that Rural Metro is in breach of the Emergency Medical Services Agreement between Rural Metro of California and the County of Santa Clara. These rumors are unfounded and incorrect.
Rural Metro has been the exclusive provider of 911 and emergency ambulance service within the Santa Clara EOA since July 1, 2011. Since that time, they have met response time standards in all five zones and in aggregate, for all Code 2 and Code 3 calls, measured monthly, every month, except in July 2011, when they did not meet the 90% response time standard for Code 3 calls in zone one. The response time standards in the Santa Clara County EOA are more stringent than before July 1, 2011. There are fewer exemptions and exceptions, and ambulances are on average arriving on scene faster now than before July 1, 2011.
The EMS Agency and Rural Metro have a strong relationship. There are no plans to replace Rural Metro as the County exclusive provider of 911 and emergency ambulance service within the Santa Clara County Exclusive Operating Area (EOA). Looking forward, the EMS Agency is working closely with Rural Metro to fully implement all of the terms of the comprehensive agreement, and to continue to improve clinical quality improvem
This letter is the better part of 13 months old, but what's interesting is the existence of "unfounded rumors". Given that the County is providing pretty good documentation (at the macro level) for R/M on-time performance, one has to wonder where/why these rumors persist?
"This letter is the better part of 13 months old, but what's interesting is the existence of "unfounded rumors". Given that the County is providing pretty good documentation (at the macro level) for R/M on-time performance, one has to wonder where/why these rumors persist?"
Wayne, I'm sure we both fully understand why these rumors persist.
Private sector ambulatory companies are not based in a FD. They use predictive technology to strategically place their units in areas with the highest frequency of calls during different times of the day. The FD doesn't do that. That's why private ambulatory companies beat the FD to calls day in and day out. And they also do the transporting to the Emergency Room.
Try to get the FD to commit to stationing their units near a freeway during commute time, or near a dangerous intersection, near a senior center after dinner hours, or anywhere outside the confines of their Fire House, and see where that gets you.
Mike from Meadow Park,
You are so right about the private ambulance companies. Only a matter of time before all cities switch to private transport. Plus, look at the savings: no salaries, pensions or medical to pay into. No buying and maintaining of ambulances. Yes, only a matter of time.
I think city council needs to study the issue. IMO, less reliance on the FD and a solid contract with a private company will provide MUCH better service in a more timely manner at a reduced cost.
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