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The chief executive officer of AMR, George DeHuff, also acknowledged troubled waters ahead. In a June 11 memo, he wrote, "Because the market is changing, i.e., the number of transports and amount of reimbursements is being squeezed, we are not making the profit necessary to meet our goals."
In his memo, DeHuff outlined three essential factors necessary for a business to succeed, then wrote, "Right now, in some areas of the U.S., one or more of those factors are not in place and consequently, we have some businesses that are not meeting their objectives. In some cases, customers are no longer willing to pay for the service level we insist on maintaining. In other areas, the demand for service has changed so fast that we have not been able to adjust expenditures accordingly. In many areas, our revenue collection processes are not working as well as we desire."
So what is AMR going to do? Greg Guckes, chief operating officer of AMR, wrote in a June 11 memo that there is a multi-plan 90-day strategy to be completed by Sept. 1. Guckes wrote that the plan calls for the company to "...reduce expenses, throughout the company over time, by about $5 million per month."
In another bullet point, Guckes wrote, "Plans to reduce cost structure will vary from one corner of the company to the other. Together corporate, group and division management has developed plans to reach that goal."
Guckes also wrote, "Employees affected by changes in local markets will be treated fairly and offered severance if other suitable positions are not available." The third step in the multi-tasked plan is to streamline the organization by the consolidation of divisions. With these efforts, by Sept. 1, AMR will have 13 divisions instead of the current 20.
Serving The Public
The unfortunate side of this situation is that many of the factors driving AMR and Rural/Metro to scale back also will impact the small "mom-and-pop" ambulance providers who have lived and worked in the community, and know the local politicians, the police chief and the fire chief. Those same owners are vested in the community, own homes there, and know the people who work in the nursing homes and hospitals.
What does all this mean to communities across the country and the fire departments serving the citizens in those communities? It means that many fire departments that do not currently provide EMS transport can expect to be tossed the keys to ambulances as the private ambulance providers leave town.
The fire service is the true public safety net of the community and is accountable only to the citizens. There is only one mission for the fire service when it comes to providing EMS to deliver the highest level of quality service to the community. Companies such as Rural/Metro and AMR have two missions - deliver the highest level of quality service to the community and generate a return on their investment. Unfortunately, when those two missions overlap, one of the two has to become the priority. AMR and Rural/Metro have now made known their priority.
Gary Ludwig is the Chief Paramedic/EMS Bureau Chief for the St. Louis Fire Department. He is currently serving his third term as an elected executive board member to the EMS Section for the International Association of Fire Chiefs and is a frequent lecturer at fire and EMS conferences. Ludwig has a master's degree in management and is a licensed paramedic. He can be reached at GaryLudwig@aol.com.