An important concept for hospitals to consider in connection with EMS and medical transportation deals is the use of performance-based contracting. The same issues examined in due diligence guide the terms of a performance-based contract. Among the provisions to consider are:
• Composition of Crew and Equipment. Consider whether it is more desirable to have all Advanced Life Support (ALS) vehicles and crew, or whether some crews should be Basic Life Support (BLS) only. If experience suggests that a significant proportion of transports are stable patients, BLS crews may suffice. Proper allocation of crews and equipment has the additional benefit of attracting more qualified employees (good paramedics burn out quickly doing basic transports) and matches patient need to the transport team. For critical care transports, consider whether staffing is best at two paramedics, a paramedic and a transport-trained RN, or a flexible configuration that varies based on the patient's condition. A good match between provider and patient acuity controls costs, leading to a deal that is more “do-able” for the provider.
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• Peak-Load Staffing. Whether the deal is for emergency services or for medical transport, it is important to match resources to need. Carefully evaluate usage trends, and monitor them to permit adjustment when necessary. Effective peak- load staffing may require several different duty configurations, including 8-, 10- or 12- hour shifts. “Flexing” staff by sending unneeded personnel home on reduced pay is often more cost-effective than paying them full rate for a full day to do no work. Historical information provided via data mining of computer aided dispatch (“CAD”) records can be invaluable in making these sorts of determinations.
• System Status Management: Consider whether SSM, where vehicle and personnel locations are varied, and based on where the largest numbers of requests for service are expected to arise, makes sense, or whether vehicles and crews will be based at a fixed location. SSM can lead to employee dissatisfaction (imagine your office as the front seat of a car for 8 hours, without ready access to sanitary bathroom facilities, a refrigerator and a microwave oven, and you can see why this may occur), and such dissatisfaction can increase overall costs for an EMS system in the form of increased turnover. In some cases, a mix might be best - for example, combine SSM with rotations back to a fixed base, such as the hospital's ER. This will bolster shorter response times, while minimizing the risks of SSM and encouraging retention and improvement of skills by permitting crews to assist in the ER.
• Set expectations regarding performance indicators, with incentives to exceed expectations and penalties for failure to meet expectations. When setting the expectations, don't forget that some components of measures may not be within the control of the crews, and allow for outliers. For example, total deployment time includes time from the beginning of the call until the crew calls available
and in service. Return to service can be significantly extended when emergency rooms are on diversion, or if the ER is attempting to deal with its overload by refusing to take report or provide a treatment location for the ambulance's patient. This practice may also expose the hospital to additional compliance risk, since CMS’ Region IV recently issued guidance that refusal to timely accept report and place an EMS patient on a hospital ED stretcher may constitute an EMTALA violation for the hospital.
• Consider personnel qualifications. If the transaction is focused on interfacility transports, consider the type of patient most likely to require transportation, and set personnel qualifications to best meet patient needs. If critical care transport is to be provided, consider contract incentives for paramedics to obtain CCEMTP certification. Appropriately specialized personnel can contribute to improved outcomes, patient and provider satisfaction, and reduced overall system costs. • Consider the vehicles in the fleet as well as equipment. EMS efficiency can be
severely hindered by poor vehicle condition and maintenance. Ambulances are subjected to hard use, and gain miles quickly. Skilled maintenance, regularly schedule preventative maintenance, and utilization of high quality vehicles will help control vehicle costs. Well-engineered vehicles are also safer and more efficient, which benefits the crew as well as patients. In a long-term contract, include provisions regarding maintenance and replacement/upgrades of vehicles and equipment. If the hospital has or plans to implement an electronic medical record, consider whether any software used by the ambulance service is compatible, and whether any of the service’s vehicles are already equipped to facilitate wireless data transmission.
• Obviously, clinical quality in EMS should be a primary concern in any performance measurement scheme. Consider including a mix of several different
clinical measures appropriate to the locality in the contract, including compliance with practice standards and best practices, survival rates, door-to-intervention rates for highly critical patients, and measures of skills. Contracting for clinical quality measures requires a delicate balance of incentives and penalties. The goal is good patient care, within the limits of the service and personnel to provide same in a fiscally sound manner that will permit the provider to continue to operate into the future. Too much emphasis on penalties can actually decrease quality, by causing personnel to make overly-conservative decisions. For example, requiring an IV success rate of 97% in all conditions may result in only "sure shots" being tried. It is also important to remember that the conditions under which EMS and medical transportation personnel work are very different than their in-hospital brethren. It can be significantly more difficult to start an IV on a hypotensive patient in the back of an ambulance, driving to the hospital on a bumpy, under-construction road, rather than in the well-lighted, climate controlled (and most importantly, NON-MOVING) hospital trauma bay. Measures of clinical performance should be aggressive but realistic, taking into account the unique environment of pre-hospital and transport care.
• Patient Satisfaction. Patient satisfaction is an important measure. Interestingly enough, this metric focuses more on customer service than on technical competence. Very few patients will comment that the paramedics really understand cardiac pharmacology. Patients will notice that the paramedics were polite; that they responded to the concerns of the patient and family, and that they cared about the patient. Patients will also notice that the paramedics wore their boots inside the house and got the white carpet dirty. Patient satisfaction scores are helpful indicators both of the culture of the company, and the morale of personnel. Patient comments should be taken seriously, and personnel receiving
patient satisfaction training so that they understand that patient satisfaction is almost as important as clinical competence.
• Driving and Liability. One area of significant liability exposure in EMS and medical transport is driving liability. Between 1991-2000, there were 300 fatal ambulance crashes in the United States. Eight-two ambulance occupants were killed, as were 275 other individuals.44 Although it is more difficult to obtain reliable statistics of non-fatal accidents, some sources suggest that approximately 12,000 accidents per year occur which involve an emergency vehicle responding "code 3" (with lights and sirens).45 Even when responding emergently, ambulances must drive with due regard to the safety of the public, and traffic laws should be observed to the extent possible. Many vehicles today have electronic tracking devices which record vehicle speed, acceleration, deceleration, and turning forces. Performance based contracts can include provisions requiring special training for drivers, the use and frequent review of technology to monitor driving practices, and strict control over driving activities. Appropriate disciplinary action should be taken for violation of driving rules. Absent any objectively verifiable data proving that speedy driving improves patient outcomes, contracts may wish to reward services that do NOT respond “code three” in more cases than not.
• Continuing Education. Most states require continuing education to maintain EMS licensure. However, for progressive ambulance services, such requirements are only the “floor”. Performance-based contracts may include provisions requiring specific amounts and categories of continuing education, to maintain
44 Ambulance Crash-Related Injuries Among Emergency Medical Services Workers --- United States, 1991--2002,
Centers for Disease Control Morbidity and Mortality Weekly Report (Feb. 28, 2003), at http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5208a3.htm
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Statistic from the Ambulance Crash Log, as reported in Red Lights, Rollovers, and Responsibility, available at http://www.emsnetwork.org/artman/publish/article_14314.shtml.
and improve knowledge levels and technical skills. Consider mandating that some training be "hands-on." Reward EMS personnel who demonstrate exceptional knowledge and skills.
• Accreditation. As discussed above, some consider accreditation by CAAS or CAMTS to be the "gold standard." Consider whether your contract should require accreditation at the time of contract, or within a reasonable (and fixed) time thereafter.
• Satisfactory Completion of Paperwork. As mundane as it may seem, timely, accurate, and thorough completion of paperwork, such as the Patient Care Report (or “PCR”), is critical to an effective EMS or medical transport operation. PCRs should be reviewed by trained quality assurance personnel, and minimum expectations for legibility, completeness, and timeliness clarified in the contract. Re-training and, potentially, other penalties should be imposed for unacceptably high failures in paperwork.
• Other factors which might be considered in a performance-based contract:
o Crew Satisfaction/Crew Turnover. Discussed above is the importance of customer satisfaction. Crew satisfaction is rarely recognized as a valid measure of operational effectiveness, but crews who believe that their worth is recognized and valued, and who believe that their work makes a difference, tend to perform better and have better customer satisfaction scores. Crew satisfaction can also help control burn-out and turnover, which helps maintain skilled, experienced personnel and thus strengthens the ambulance service.
o Contribution to Community Health. EMS is primarily a medical and public safety organization. Strong EMS systems often have a significant public health component. From sponsoring child car-seat clinics to
teaching CPR, participation in the health of the community by EMS benefits both the public and the EMS system. Performance-based contracting may require the system to participate actively to support community health and promote the positive perception of EMS.
o Integration/Cooperation with Other Agencies. EMS and medical transport teams must cooperate and integrate services with various other agencies to best meet patient needs. Performance-based contracting can emphasize the expectation that EMS/medical transport teams will actively seek to improve inter-agency relationships; seek inter-agency training opportunities, and work actively to facilitate effective cooperate among and across agencies to best meet patient needs.
o Innovation/Recognition of Peers. As an incentive, performance-based contracting may provide for benefits associated with true innovation and positive recognition of the service by its peers.
o Research Participation. Research in EMS and medical transport is beginning to mature, and, as with other health research, is highly likely to result in changes to the practice of EMS and transport care. Performance-based contracts may encourage and support participation in research projects. A clause of this type may be of particular interest to academic and teaching hospitals, which already have significant research missions.
To be effective, performance-based contracting must have effective penalties and, preferably, incentives for stellar performance. Although there are probably as many different approaches to penalties as there are EMS models, a few suggestions are:
• Financial Penalties. Financial penalties may be structured as direct penalties, in which the vendor loses money for failure to meet performance standards, or remediable penalties, in which the vendor has the opportunity to "earn back" the penalty. Whichever approach is used, it is important to structure the penalty so that it is stringent enough to cause pain, without being excessively harsh. The risk is that, if the penalty is too lenient, the vendor will decide it is cheaper to breach than to comply with the provision.
• Assumption of Activity. If financial penalties are not working, or if the breach is particularly egregious, the contracting party may decide to resume operations and terminate the contract. It is important that this alternative be considered when drafting the contract, as structure will determine whether this is a realistic option. One approach is to require that all receivables be placed into an escrow account, and swept into the vendor's account daily or weekly, so long as no notice of breach has been given. This gives the contracting agency some ready cash if resumption of services or termination of the contract is deemed necessary. Another approach is to retain a certain percentage of revenues back until the end of the performance period (six months or a year). This provides an even greater cash cushion if resumption of service is deemed necessary. Of course, it is unlikely that the contracting party will be able to assume provision of service without access to the vehicle fleet and equipment. To provide this, the contract may either address the use of vehicles and equipment (if vehicles and equipment are owned outright) or a three-way lease for vehicles, which permits use by the contracting agency, may be used.
• Termination. Premature termination of the contract is the ultimate penalty. The contract should include provisions regarding assumption of duties in exigent circumstances, as discussed above, and require the vendor to cooperate fully with
the transition in the event of termination. The contract should also address issues such as ownership and custody of PCRs and other documentation, and the availability of vendor personnel in the event of litigation.