Emergency Economics

Emergency economics

Q&A with Mike Murphy, general manager of American Medical Response in San Diego

By Paul Sisson, March 10, 2014


Mike Murphy, general manager of American Medical Response, San Diego. — EduaMike Murphy has seen a few things during his 36 years in the ambulance business, from one of the nation’s deadliest plane crashes to one of its first school shootings.

Fascinated by the 1970s TV show “Emergency!” he started moonlighting weekends as an emergency medical technician while still a senior in high school. Then he joined full time right after graduation.

For the past dozen years, he has worked as general manager of American Medical Response San Diego, one of the region’s large private ambulance companies that contracts with cities, hospitals and clinics to respond to about 70,000 911 calls and provide roughly 50,000 medical transports per year.

The highest-profile events of Murphy’s career came at the beginning.

Fresh out of high school, he was one of many who responded to the 1978 crash of PSA Flight 182, which killed 144 people after a jetliner collided in midair with a small aircraft, plunged into a residential North Park neighborhood and leveled 22 homes. That accident proved to be a formative experience for Murphy and his industry.

Back then, he explained, there wasn’t much coordination between emergency services. Everyone flooded into the area from all directions, parked their rigs in the middle of neighborhood streets and clogged up the search-and-rescue process.

Today, he noted, things are much different.

“Now, you go to a scene and there is an incident commander, everybody has a role. I would say it’s coordinated chaos, compared to how it was in ’78 where there was a mass tragedy with no guidance or direction,” Murphy said.

Four months later, on Jan. 29, 1979, he was heading to his home in San Carlos when a police officer flagged him down. The officer asked him to help remove a custodian and two children from Cleveland Elementary School who had just been shot by 16-year-old Brenda Spencer. Two were killed in the shooting.

Recently, Murphy discussed the evolution of the private ambulance business with U-T San Diego. Here is an edited version of that conversation:

Q: How has this business changed since you started?

A: The hands-on piece hasn’t changed that much; we’re still taking care of people every day. Our tools and equipment have changed a lot.

When I first started, we would monitor our vehicles on a magnet board with colored dots that we moved by hand as they picked up patients and went to hospitals. With today’s technology, I can tell you, on my iPhone and on my computer screen at the office, exactly where every one of my ambulances is at any moment, the speed they’re driving, right down to the voltage in their batteries.

These analytics allow us to have predictive modeling, to see the patterns and predict the placement of each vehicle based on the time of day, day of week, traffic patterns. ... That’s a big difference compared to magnets on a board and punching the little time clock every time the vehicle would say it’s en route.

Q: What about the medical services that can be provided from the back of an ambulance today compared to when you started?

A: Today we’re able to, for example, transmit 12-lead (electrocardiograms) from the back of the unit. We can send those biometrics to the hospital so that the medical team there can, for example, prepare a (catheterization) lab if it’s going to be a (heart attack) patient.

Q: What’s the biggest business challenge of running a private ambulance company today?

A: Reimbursement is the biggest challenge for sure. The cost of an ambulance transport is about $1,800 and Medicare pays only about $434. Medi-Cal pays only $118. Medi-Cal hasn’t had a rate increase in 15 years, and Medicare has been flat as well, so that leaves the insured population to pay the higher rate.

Overall, we collect about 32 cents on the dollar. The challenge with reimbursement is that we don’t know where it’s going with all of the changes we’re seeing in government reimbursement and with private insurance companies.

Q: What are your concerns about how Obamacare might change the business?

A: The worry is that the newly insured population will be covered at lower rates, similar to those paid by Medicare or Medi-Cal, and not be able to cover the cost of providing the service. I also think that the Affordable Care Act will push this business to do more prevention, whereas it has always been very reactive in the past.

Every patient that we transport home from a hospital or a skilled-nursing facility has a bag of medications, discharge instructions, and they usually have trouble understanding what it means and following those instructions. With our footprint, we are in a position to help them adhere to care guidelines versus waiting until they don’t take their medication and they need to be transported back to the hospital.

Q: What is the best thing about running an ambulance company?

A: The best thing is being involved in the communities we serve. A number of our people, myself included, are on different boards throughout the area. We’re also able to sponsor many community groups.

One thing that we do that’s really unique is our work with the Forget Me Not Foundation, which takes flowers from large events like weddings or corporate functions and sends them to skilled-nursing facilities. They had no way of moving those flowers from point A to point B, and they called us up asking if we had resources to assist them.

We’ve been partnering with them for four years and we’ve done about 1,500 deliveries so far. It’s amazing what it’s like to bring these large bouquets of flowers to the residents. Their eyes just light up.

Q: What is something the general public doesn’t understand about emergency response?

A: The cost of the bill. They don’t understand that it’s not just the cost of showing up and putting on the dressing or starting the IV or pushing the medicines. The cost goes back to readiness.

To be able to be there within the required amount of time, you have to have staffing 24/7, 365 days a year. We are also required to transport anyone who needs service, and about 17 percent of the trips we make are for patients who have no insurance at all. Those we have to write off.

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