Your ambulance service may be owned by private equity firm

Private companies now represent about 25 percent of all ambulance providers. Because of the 2008 financial crisis, many municipalities have struggled to pay for basics and have turned to private equity firms to provide ambulance and fire-fighting services. Thus, when you dial 911, you may be interacting with private equity

Private equity firms invest money from wealthy individuals and pension funds. Because these firms are primarily skilled in making money, not providing services, studies have shown that some have used cost cutting, price increases, and litigation to improve their bottom lines.

Private equity investors swept into the ambulance business with high hopes (“tremendous growth potential,” as one investor stated). But it didn’t always play out as they had hoped and several have gone bankrupt. To keep afloat, some firms fell back on a time-tested moneymaking strategy: cutting costs. In many cases this meant fewer ambulances and staff, slower response times, failed heart monitors, ambulances breaking down, shortages of supplies, and much more. At one company, emergency workers were forced to supply needed medications by swiping supplies from hospitals. In fact, they were pressured by their supervisors to raid hospital supply carts. As one worker who swiped supplies said, “There’s only a couple of things that terrify paramedics. Being without your critical medications is one of them. I make no apologies.”

I’ll bet you thought that your government supplied your local ambulances. I did, so I looked it up and discovered that in my county (Santa Cruz, California) the service is provided by a contractor called American Medical Response, which, I discovered, was acquired in 2011 by a private equity firm, Clayton, Dubilier & Rice. In the next county, Santa Clara, services are provided by Rural/Metro, a company that went bankrupt in 2013. (It was paying hundreds of thousands a month in fines for things such as failing to have three ambulances at the ready and for responding too slowly to emergencies.) In 2015 it was purchased by Envision Healthcare Holdings, the parent company of American Medical Response, which, as I mentioned, is owned by Clayton, Dubilier and Rice. It’s all horribly Byzantine.

For an introduction to this blog, see I Just Say No; for a list of blog topics, click the Topics tab.