News

To raise funds, Fire Department proposes new service: Ambulance insurance

Program expected to bring in more than $1 million in annual revenues

Palo Alto residents and businesses may soon have the option of paying a monthly fee to insure them from paying fees if they need transportation by ambulance. Embarcadero Media file photo.

Palo Alto residents and businesses may soon have the option of subscribing to a new service that most will hope they'll never have to use: unlimited rides in Fire Department ambulances.

The Palo Alto Fire Department is preparing to get into the insurance business by offering all households and businesses the option of paying a flat monthly fee. Those who participate would not have to pay any out-of-pocket costs if they require an ambulance transport — a service that can cost some residents as much $2,460 per trip.

The program would have two main goals: giving local residents and employees one less worry when they're facing a medical emergency, and giving the Fire Department an important new revenue source at a time of budget shortfalls. The City Council's Finance Committee received its first look at the proposed program last week and the full council is expected to take it up in early 2021.

"The biggest compliment we get as an emergency medical provider is our service," Fire Chief Geo Blackshire told the committee at the Dec. 15 meeting. "The most regular complaint we get is billing. What we feel is that we're providing some cushion to one of our biggest complaints that we get, and that's our billing. We can provide that to the customer and give them a means of saving money, even if it's over a long time."

Fire Department leaders acknowledged that many people will choose not to opt into the program because their ambulance costs are already largely covered by their existing insurance policies. Individuals who are covered by Medi-Cal or Medicaid have no co-pay at all, while those on Medicare face a co-pay of between 10% and 20%, according to Amber Cameron, a business management analyst for the city. The cost is higher for those with commercial insurance, for whom the co-pay is about 27%, which typically amounts to between $385 and $650 per trip.

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The full $2,460 fee typically only applies to people with no insurance, who make up about 11% of the department's ambulance transports. In many cases, the department does not recover the cost of the ambulance transfer. The Fire Department collects about 41% of the fees, Cameron said, and the ambulance service operates at a loss.

The idea of ambulance insurance is far from new, according to city officials. Other California cities that run their own ambulance services, including Huntington Beach, Orange and Corona, have had similar programs since the 1990s. Most charge an annual fee between $43 (as in Anaheim) and $60 (as in Newport Beach and Huntington Beach) for the ambulance insurance.

Palo Alto's fees are likely to be higher. The Finance Committee saw three options for residential customers, ranging from $80 to $120 per household per year. Participants would be able to opt-in or opt-out at any time.

For residents, the program would cover not only the entire household but also any guest who may be staying at the household. For participating businesses, the insurance program would cover all employees both when they are at the business address and when they are moving around the city in the course of coming to work.

Rates for businesses would range by employee count. Small businesses with up to 10 employees would likely see a rate of between $200 and $300 annually, while for large businesses (those with up to 1,000 employees) the rate would range from $10,000 to $15,000.

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If plans move forward, the program would net the Fire Department between $1.1 million and $1.65 million in new revenues annually, depending on the rates. This presumes that about 27.5% of the city's households and businesses participate, a similar proportion to other communities that currently have such programs in place.

Blackshire said the department was motivated to start this program by the success they've seen elsewhere with ambulance insurance. The Fire Department hopes to mimic that success and, in the process, create a new revenue source at a time when revenues from sales and hotel taxes are plummeting.

The city is banking on the insurance program to provide $1.48 million in the current fiscal year, which began on July 1. Fire Department officials first proposed the program last spring, as the city was considering ways to fill a budget hole that was projected at $40 million. To address the lost revenues, the council eliminated about 70 full-time equivalent positions from the city's workforce, including 32 in the Police and Fire departments. It also approved an attrition program that offers bonuses to department veterans to retire, thus obviating the need to lay off newly recruited employees. The program was pitched as a way to prevent further layoffs.

In their Dec. 15 review, Finance Committee members generally supported the program, even as they noted that it's hard to predict how many people will participate. Vice Mayor Tom DuBois called the proposal "really creative" and encouraged staff to include in its marketing materials a comparison between the fees customers would be paying to participate and the costs they would incur under their existing insurance policies. Council member Liz Kniss also lauded it, though she noted that the city will probably need practical experience with the new program before finalizing some of the details.

Council member Greg Tanaka, who chairs the Finance Committee, was more skeptical and said he would not support the program unless staff provided a "distribution analysis" with information about individuals who currently use the ambulance service and who would likely enroll. The information is critical, he said, to avoid a situation in which only those who frequently use the ambulance service sign up for the program.

"Insurance really works well when it's a random distribution," Tanaka said. "It doesn't work well when you have highly concentrated usage. We can end up having a 'heavy-user' program, (where) all the people who buy are heavy users."

Fire Department staff aren't particularly concerned about facing that scenario. Cameron noted that most of the people who are heavy users tend to be elderly residents who are covered by Medicare. As such, they are unlikely to enroll in the insurance program.

A more likely participant would be someone who is on commercial insurance such as Kaiser Permanente or Blue Shield of California, which cover some of the ambulance cost but still leave an individual with a bill totaling hundreds of dollars.

"The more random events, where someone breaks their leg or gets in a car accident — those folks are more likely to be the ones to have commercial insurance, who are currently working and receiving insurance through their employer," Cameron said. "We do think we have a great deal of hope for the success of this program because we do think this is who it's going to appeal to. They do happen to be the contingent of our population who doesn't use the service very often."

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To raise funds, Fire Department proposes new service: Ambulance insurance

Program expected to bring in more than $1 million in annual revenues

by / Palo Alto Weekly

Uploaded: Tue, Dec 22, 2020, 11:26 am

Palo Alto residents and businesses may soon have the option of subscribing to a new service that most will hope they'll never have to use: unlimited rides in Fire Department ambulances.

The Palo Alto Fire Department is preparing to get into the insurance business by offering all households and businesses the option of paying a flat monthly fee. Those who participate would not have to pay any out-of-pocket costs if they require an ambulance transport — a service that can cost some residents as much $2,460 per trip.

The program would have two main goals: giving local residents and employees one less worry when they're facing a medical emergency, and giving the Fire Department an important new revenue source at a time of budget shortfalls. The City Council's Finance Committee received its first look at the proposed program last week and the full council is expected to take it up in early 2021.

"The biggest compliment we get as an emergency medical provider is our service," Fire Chief Geo Blackshire told the committee at the Dec. 15 meeting. "The most regular complaint we get is billing. What we feel is that we're providing some cushion to one of our biggest complaints that we get, and that's our billing. We can provide that to the customer and give them a means of saving money, even if it's over a long time."

Fire Department leaders acknowledged that many people will choose not to opt into the program because their ambulance costs are already largely covered by their existing insurance policies. Individuals who are covered by Medi-Cal or Medicaid have no co-pay at all, while those on Medicare face a co-pay of between 10% and 20%, according to Amber Cameron, a business management analyst for the city. The cost is higher for those with commercial insurance, for whom the co-pay is about 27%, which typically amounts to between $385 and $650 per trip.

The full $2,460 fee typically only applies to people with no insurance, who make up about 11% of the department's ambulance transports. In many cases, the department does not recover the cost of the ambulance transfer. The Fire Department collects about 41% of the fees, Cameron said, and the ambulance service operates at a loss.

The idea of ambulance insurance is far from new, according to city officials. Other California cities that run their own ambulance services, including Huntington Beach, Orange and Corona, have had similar programs since the 1990s. Most charge an annual fee between $43 (as in Anaheim) and $60 (as in Newport Beach and Huntington Beach) for the ambulance insurance.

Palo Alto's fees are likely to be higher. The Finance Committee saw three options for residential customers, ranging from $80 to $120 per household per year. Participants would be able to opt-in or opt-out at any time.

For residents, the program would cover not only the entire household but also any guest who may be staying at the household. For participating businesses, the insurance program would cover all employees both when they are at the business address and when they are moving around the city in the course of coming to work.

Rates for businesses would range by employee count. Small businesses with up to 10 employees would likely see a rate of between $200 and $300 annually, while for large businesses (those with up to 1,000 employees) the rate would range from $10,000 to $15,000.

If plans move forward, the program would net the Fire Department between $1.1 million and $1.65 million in new revenues annually, depending on the rates. This presumes that about 27.5% of the city's households and businesses participate, a similar proportion to other communities that currently have such programs in place.

Blackshire said the department was motivated to start this program by the success they've seen elsewhere with ambulance insurance. The Fire Department hopes to mimic that success and, in the process, create a new revenue source at a time when revenues from sales and hotel taxes are plummeting.

The city is banking on the insurance program to provide $1.48 million in the current fiscal year, which began on July 1. Fire Department officials first proposed the program last spring, as the city was considering ways to fill a budget hole that was projected at $40 million. To address the lost revenues, the council eliminated about 70 full-time equivalent positions from the city's workforce, including 32 in the Police and Fire departments. It also approved an attrition program that offers bonuses to department veterans to retire, thus obviating the need to lay off newly recruited employees. The program was pitched as a way to prevent further layoffs.

In their Dec. 15 review, Finance Committee members generally supported the program, even as they noted that it's hard to predict how many people will participate. Vice Mayor Tom DuBois called the proposal "really creative" and encouraged staff to include in its marketing materials a comparison between the fees customers would be paying to participate and the costs they would incur under their existing insurance policies. Council member Liz Kniss also lauded it, though she noted that the city will probably need practical experience with the new program before finalizing some of the details.

Council member Greg Tanaka, who chairs the Finance Committee, was more skeptical and said he would not support the program unless staff provided a "distribution analysis" with information about individuals who currently use the ambulance service and who would likely enroll. The information is critical, he said, to avoid a situation in which only those who frequently use the ambulance service sign up for the program.

"Insurance really works well when it's a random distribution," Tanaka said. "It doesn't work well when you have highly concentrated usage. We can end up having a 'heavy-user' program, (where) all the people who buy are heavy users."

Fire Department staff aren't particularly concerned about facing that scenario. Cameron noted that most of the people who are heavy users tend to be elderly residents who are covered by Medicare. As such, they are unlikely to enroll in the insurance program.

A more likely participant would be someone who is on commercial insurance such as Kaiser Permanente or Blue Shield of California, which cover some of the ambulance cost but still leave an individual with a bill totaling hundreds of dollars.

"The more random events, where someone breaks their leg or gets in a car accident — those folks are more likely to be the ones to have commercial insurance, who are currently working and receiving insurance through their employer," Cameron said. "We do think we have a great deal of hope for the success of this program because we do think this is who it's going to appeal to. They do happen to be the contingent of our population who doesn't use the service very often."

Comments

911 Nightmare
Registered user
Another Palo Alto neighborhood
on Dec 22, 2020 at 12:35 pm
911 Nightmare , Another Palo Alto neighborhood
Registered user
on Dec 22, 2020 at 12:35 pm

Based on the Weekly story here: Web Link no one should ever call an ambulance in Palo Alto. If you do, the police may show up, accuse you of imaginary crimes or mental health issues, harass and humiliate you, search your house and then refuse to transport you to the hospital even if you are having a stroke or seizure, all while the ambulance LITERALLY HIDES FROM THE SICK PERSON 2 BLOCKS AWAY.

If you are having a medical emergency, you are better off calling an Uber or having a neighbor drive you to the ER. Or just crawl there over broken glass. It will be more likely you will survive.

Also our City Council is a bunch of weasels who have done nothing about this since it occurred.


Lee Forrest
Registered user
Crescent Park
on Dec 22, 2020 at 1:58 pm
Lee Forrest, Crescent Park
Registered user
on Dec 22, 2020 at 1:58 pm
Anonymous
Registered user
Duveneck/St. Francis
on Dec 22, 2020 at 11:03 pm
Anonymous, Duveneck/St. Francis
Registered user
on Dec 22, 2020 at 11:03 pm
Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Dec 23, 2020 at 1:26 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Dec 23, 2020 at 1:26 am

I was woken up tonight by the fire engine and fire department ambulance that was directly across the street. No noise, just the presence of a large truck. They took a neighbor away in a stretcher. Not sure at this point what happened. But it gave me a good feeling that capable people were so close, here in an emergency, and we have SU Hospital right here.

At a recent event we were all talking about moving. Most said that when they checked out other locations there was a lack of medical care and hospitals that had super qualified medical help. That is a major consideration when looking at a different place to live. Something to think about.

A friend lived on the Big island - Hawaii - but he had to go to Honolulu for medical checkups. That is Kaiser.


Lee Forrest
Registered user
Crescent Park
on Dec 23, 2020 at 7:07 am
Lee Forrest, Crescent Park
Registered user
on Dec 23, 2020 at 7:07 am
Neal
Registered user
Community Center
on Dec 23, 2020 at 9:13 am
Neal, Community Center
Registered user
on Dec 23, 2020 at 9:13 am

The budget shortfall due to less sales tax and hotel tax revenue is temporary. This new source of revenue will never go away. Just another money grab.


Old Palo Alto Resident
Registered user
Old Palo Alto
on Dec 23, 2020 at 10:42 am
Old Palo Alto Resident, Old Palo Alto
Registered user
on Dec 23, 2020 at 10:42 am

This is simply another way to get money out of the people who fund the Fire Services (and all other PA departments) already. Emergency services are the primary services provided by this department. Quoting from the 2019 PAFD Semi-Annual Performance Report submitted to the PA City Council: "Emergency Medical Service (EMS) is the primary service that the Palo Alto Fire Department provides to Palo Alto and Stanford. While this shift toward EMS is being seen across the region, the Palo Alto Fire Department is the only Fire Department in the County that provides ambulance and transport services. Of the 2,632 Emergency Medical Service calls the PAFD responded to in the first period of Fiscal Year 2019, the overwhelming majority were for medical, trauma and cardiac calls that did not involve a vehicle accident." In order to accomplish this, the PAFD reported that it has: 4 Battalion Chiefs, 22 Fire Captains and 60 Operators/Firefighters. Is there no end to the money grabs being perpetrated by the city government? Is the City staff never embarrassed by these grabs?


Jennifer
Registered user
another community
on Dec 23, 2020 at 11:27 am
Jennifer, another community
Registered user
on Dec 23, 2020 at 11:27 am

This sounds like an excellent idea. My mom pays $200 per trip (after Medicare and her private insurance pay their portion). Ambulance trips are very expensive, and insurance should pay 100%.

If you have a medical emergency, call an ambulance. Uber, cabs, neighbors, etc. don't have the medical equipment that ambulances have (hooking you up to oxygen, testing your heart, etc.) nor are they medical professionals.


Online Name
Registered user
Embarcadero Oaks/Leland
on Dec 23, 2020 at 11:29 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Dec 23, 2020 at 11:29 am

Recently one of our neighbors had a medical emergency and was taken out on a stretcher to one of the two waiting ambulances that had been in front of their house for around an hour, along with 2 other official vehicles.

Years ago a driver ran into our parked car and the young driver was merely shaken up. But we had literally 16 vehicles here -- several ambulances, a few fire engines, cop cars, motorcycle cops... It looked like an invasion.

This could be a real money-maker.


Ted Glasser
Registered user
St. Claire Gardens
on Dec 23, 2020 at 1:57 pm
Ted Glasser, St. Claire Gardens
Registered user
on Dec 23, 2020 at 1:57 pm

Emergency hospital transportation from a Palo Alto Fire Department ambulance should be viewed as a tax-supported public service available to everyone — the same way we view public schools, public libraries, public parks, etc. It’s unconscionable to expect people to conduct a cost-benefit analysis for ambulance service when facing a life-threatening emergency.


Name hidden
Downtown North

Registered user
on Dec 23, 2020 at 10:31 pm
Name hidden, Downtown North

Registered user
on Dec 23, 2020 at 10:31 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Granny B
Registered user
Midtown
on Dec 24, 2020 at 2:16 am
Granny B, Midtown
Registered user
on Dec 24, 2020 at 2:16 am

Commenting on Resident-1 Adobe Meadows' statement about friend on the Big Island of Hawai'i:
*I am from that Aloha State and can tell you on the "outer" islands (all islands other than O'ahu) there ARE medical facilities for checkups and routine illnesses, both Kaiser and other. However, because population is small on those islands, anything other than routine or short-term hospitalization needs to be seen in Honolulu (on O'ahu). For example, many people dream of retiring to Kaua'i. Not a great idea because of lack of specialized care. A few years ago my aged mother suffered from organ failure in Lihue Kaua'i, and was hospitalized. She suffered needlessly while waiting for the specialist doctor who comes weekly from Honolulu to help her along the way to a peaceful passing. Any sort of heart problem or specialized cancer treatment needs to be seen in Honolulu as well, a short airplane ride away, but nevertheless an airplane ride.
Commenting on statement by Ted Glasser:
*Thank you for pointing out that Emergency hospital transportation from a Palo Alto Fire Department ambulance should be viewed as a tax-supported public service available to everyone. We also need Medicare for All #H.R. 1384. Unfortunately our congresswoman, Anna Eshoo, does not support it, neither does Biden.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Dec 24, 2020 at 10:09 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Dec 24, 2020 at 10:09 am

Comment on Medicare. Not to confused with Medicaid. Medicare is a deduction from the Social Security monthly check. This assumes that you have worked and contributed to Social Security through out your working life. This is the FICA deduction on your paycheck that is matched by your employer throughout your working life. People get a yearly statement that shows how much has been deducted toward your SSN, and eventually your Medicare deduction from your SSN checks. You get a letter every year that informs you of what you are getting and how the deductions have been applied to you SSN payments. You can't give Medicare for all because the amount is the end result of your working life and how much you have contributed.

Anna and Biden understand how Medicare is calculated and where the funds come from. There are agencies that can explain that to you - one in RWC.

Medicaid is a different animal.


Granny B
Registered user
Midtown
on Dec 25, 2020 at 12:54 am
Granny B, Midtown
Registered user
on Dec 25, 2020 at 12:54 am

I'm talking about HR 1384 definition of Medicare for All
According to the Kaiser Family Foundation Medicare for All means:
comprehensive benefits
tax financed
a replacement for all private health insurance, as well as the current Medicare program
lifetime enrollment
no premiums
all state-licensed, certified providers who meet eligible standards can apply


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Dec 25, 2020 at 8:32 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Dec 25, 2020 at 8:32 am

Well Granny - you are side stepping the obvious - people are having Medicare deducted from their SSN checks. We have paid into this our whole working life. And we are paying into it now. So that leaves all of the people who have not had a "working life" and have not paid into the system. That is the group that wants the "taxpayer" other than themselves -to pay for their medical care.

As you recall Obama Care would penalize you $2,000+ if you did not have insurance.
I think Anna and Joe can see that they will be in deep trouble when all of the people who have paid in get their investment truncated. When you say the Taxpayer - you are talking about the people who are paying in. Then there is a whole group that does not pay taxes. You can see where this is heading. It is usually the people who do not pay taxes that want the "taxpayer" to pay for their healthcare.


TimR
Registered user
Downtown North
on Dec 25, 2020 at 12:18 pm
TimR, Downtown North
Registered user
on Dec 25, 2020 at 12:18 pm

Will subscribers who don't end up using it at least get one free ride a year, to experience the thrill of speeding around, through intersections with the lights and siren on? Seems like that's the least they could do, plus it would be good for PR!


Granny B
Registered user
Midtown
on Dec 26, 2020 at 1:58 am
Granny B, Midtown
Registered user
on Dec 26, 2020 at 1:58 am

Re: Medicare for All...

The United States is the only industrialized nation without universal health insurance. Almost 20% of the nonelderly population in this country lacks health insurance at any given time, and the disparities in access to care and health outcomes are very much greater in the United States than many other places.

In the spirit of the season I am hoping for a new year where, as a nation, we make some progress toward caring for others.



Hinrich
Registered user
Old Palo Alto
on Dec 26, 2020 at 11:24 am
Hinrich, Old Palo Alto
Registered user
on Dec 26, 2020 at 11:24 am

Several years ago a PAFD ambulance took me about 3 miles to Stanford hospital for an emergency. Other than the checks they do when they arrive, nothing was needed during the trip. The cost billed to my insurance was over $5000 of which I paid something in excess of $1000. Why so much. Medical billing, like health insurance is so intentionally opaque and extremely hard to follow for the consumer - why should such a short ride in taxpayer funded vehicles with taxpayer funded employees cost so much? This proposal sure sounds like another scheme to tax - as one said - those who pay in the system and scheme for yet another tax. Shutdowns cost money in lost tax revenues (and all the other devastation to business and people's livelihoods that officials don't seem to worry about) - a new tax scheme that won't end when the economy recovers is just the council never missing an opportunity to grab more. The city should provide essential services for the price of its taxation and rushing someone to the hospital in an emergency is an essential service. Citizens should say no to this. What's next - subscription fire service, police response only for subscribers?


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Dec 26, 2020 at 2:29 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Dec 26, 2020 at 2:29 pm

The Social Security Administration - of which Medicare is a part - is a huge government organization that employs a huge amount of people across the country. It interlinks with the IRS and many other government agencies. Many budget issues are out there to support the organization and all of the agencies that it feeds into, including the veterans agencies. Comparing to other countries is a non-starter as their systems are not set up the same way.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Dec 26, 2020 at 2:45 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Dec 26, 2020 at 2:45 pm

AS we have seen on the TV shows getting people to the hospital after an emergency is a very tenuous operation and requires a lot of coordination for a successful result for the person in the ambulance. They are highly trained people who will be required to respond to any situation that is life threatening. Hopefully your insurance plan covers these contingencies. Check out your health insurance plans to see if it itemized as a covered cost.


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