$10M is a Lot of Free Ambulance Rides

If you live in Richmond, Virginia, and–heaven forbid–you need emergency services but can’t afford the ride, I’ve got good news for you: Richmond Ambulance Authority (RAA) will get you to the hospital. In fact, if you haven’t paid for 20 trips in a bus (as the TV police so cleverly call ambulances) but you need just one more–“[W]e will tote you the 21st time,” said Chip Decker, CEO of RMA.

But good news for people in Richmond–a community that according to NBC12 is made up of a lot of low income residents without fixed addresses–is bad news for RAA. Very, very bad news to the tune of a $9.6M deficit in unpaid ambulance bills.

The problem is exacerbated by the fundamental nature of emergency services. It’s neither practical (nor polite) to ask someone in the midst of severe chest or abdominal pain to make a point-of-service payment for emergency transportation. And don’t even think about asking the guy who just accidentally blasted his hand off in his mom’s kitchen using an empty 2 liter bottle of Shasta Very Cherry Twist, some balled-up aluminum foil, and a household cleansing agent* to pay up front. I mean, how’s he going to get his wallet out?

[For an alternate take on point-of-service payment, check out this piece by my colleague Mike Bevel: Emergency Rooms Charge Uninsured Upfront to Deter Non-Emergency Care.]

But I digress.

For the time being, RAA has hired an outside collection agency to help recover delinquent account balances. And the Authority’s overall collection rate stands at better than 50 percent on all accounts. That figure beats most other municipal departments’ collection stats, Decker said.

But just how sustainable is a business model where half of all outstanding bills go unpaid? Deficits like this keep growing unless something intervenes to stop the bleeding. And with a shortfall as big as $10M, sooner or later emergency medical services in Richmond will reach a crisis stage.

*WARNING: Never, EVER try this at home. Or anywhere. Don’t ask me how I know this. Just trust me.

Michael Klozotsky is the Chief Content Officer at insideARM.com. He recently published a healthcare case study with DECA Financial Services entitled Increasing Outside Collections for Emergency Physician Groups. Download it here.