NCPA - National Center for Policy Analysis

Emergency Medical Services: How Health Reform Could Hurt First Responders

January 11, 2011

The scope of emergency services local governments provide has expanded over the years from fire fighting and rescue to providing advanced medical care, transport and a point-of-access to the health system.  As a result, emergency medical services (EMS) have become more costly, says Peter Swanson, a Hatton W. Sumners Scholar at the National Center for Policy Analysis. 

An estimated 32 million to 34 million individuals will gain public or private health insurance under the Patient Protection and Affordable Care Act (ACA).  Thus, EMS utilization will likely increase; however, the ACA does not provide funds to pay for increased EMS use, forcing local governments to choose between raising taxes, finding alternative revenue sources or reducing emergency services.

Research has shown that Medicare and Medicaid enrollees disproportionately use emergency services compared to the privately insured.  Assuming that half of the 32 million to 34 million newly insured under the ACA gain private coverage and half will be enrolled in Medicaid, the NCPA estimates that they will generate 848,000 to 901,000 additional emergency room visits every year.

On average, EMS agencies lose money responding to calls from the publicly insured, says Swanson.

For example:

  • The ACA will increase Medicare Part B reimbursements for urban-based transport by 3 percent, but only for one year (2011).
  • Adjusted for the 3 percent increase, Medicare will reimburse providers $249.61 (plus an additional $6.87 per mile in urban locations) for basic transport in the state of Texas.
  • Nationally, however, the cost of transporting an individual to the emergency room by ambulance ranged from $99 to $1,218 per trip and averaged $415, according to a 2007 Government Accountability Office report.

Thus, EMS agencies are not reimbursed for the full cost of Medicare transport, and local taxpayers are stuck with the difference.

Scaling back emergency services will limit our national preparedness to respond to all incidents, but fragmented and inadequate financing risks municipal insolvency, says Swanson.

Source: Peter A. Swanson, "Emergency Medical Services: How Health Reform Could Hurt First Responders," National Center for Policy Analysis, January 11, 2011.

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