By Rick Doherty
Periodically, over this past year, I have had an opportunity to take a trip down “memory lane” by being involved with a consulting initiative with one of the local Ambulance Transportation companies in New Hampshire. I say “Memory Lane” because those of you that know my background, know that at one time many years ago, I had the good fortune to be the CEO of one of our country’s largest private Ambulance Services as that industry began to consolidate back in the early 1990’s.
It was a hectic time in that little niche of the healthcare puzzle with acquisitions and mergers of what had been predominantly a “Mom and Pop” business seeing IPO’s hit the marketplace and national companies blossoming from the inspiration and risk taking by some extremely talented business folks with vision and lots of capital.
For several years it seemed to be the way of the future as the owners of quite a few private ambulance services sold their companies headed off for rest and retirement under their favorite palm trees. It was a prime example of the American Dream for many of these Mom’s and Pop’s who had started their business with one or two ambulances dispatched from their kitchen table. There are several truly astonishing stories. In fact, I am sure that some of you may remember seeing names like Chaulk, Brewster, Norfork-Bristol (the Zamito Family), Alves-Ruggerio, and numerous other names painted proudly on the side of ambulances and wheelchair vans traveling along the highways of MA and NH.
Although owners of many local companies opted out of the consolidation fervor of the 1990, with consolidation interest at its peak, the 1990’s saw the rise of two significant national players. With an emphasis in the Southern and Midwestern states as well as key acquisitions in California and the Southwest, we saw Rural Metro Corporation; who had had their start in the privatization of Fire Service jump into the Private Ambulance stewpot with both feet. Rural Metro‘s Senior Management Team was well schooled in Emergency Medical Services and expanding their national emergency niche was a natural focus.
The other national player, born as the brainchild of a very successful business entrepreneur named Paul Verrocchi from Scituate, MA, was a company that became to be known as AMR, an abbreviation for American Medical Response. Mr.Verrocchi started AMR by putting together four extremely successful companies initially connecting by a broad stoke from East Coast to West Coast. It was from this national presence that AMR would begin to expand regionally with such speed that it seemed that each passing month saw its numbers multiply like little rabbits. Those were exciting times for a lot of folks, especially the owners who cashed in their chips and became master spokesmen for the consolidation movement in the Private Ambulance Industry.
Well, you would think that was the prelude to a pretty exciting chapter in the Ambulance Industry, one that would last for decades to follow as this industry experienced the benefits inherent with “consolidation” that favored the growth of so many other industries during the 1990’s, from restaurant chains to cable companies. Well, if you thought this at the time, you would have been wrong…dead wrong.
You see in spite of all of the financial data accumulated, business models built, barrels of investment dollars banked and the talents of some very bright people at the helm; as the honeymoon period of expansion began to fade several cracks began to appear in the façade of this consolidation movement that would eventually open up the dike. As financial corrections surfaced and the original owners sailed off to parts unknown, the consolidation movement would put a once stable industry into a tailspin faster than anyone ever anticipated.
Oh, some people blamed overstated receivables and bloated revenue forecasts for the dismal stock performance of both national companies while others blamed the lack of middle management talent in the industry that wasn’t able to support the rapid acceleration of merged staff and overlapping services. Others blamed the leadership of the large consolidators for being too top heavy with Emergency Medical Services talent while having not having a clue how to maintain market share with their medical transportation customers and compete successfully with the remaining independent small and medium size ambulance services who had marketing for Non-Emergency Transports, the most lucrative side of the profit column, down to a science.
Regardless of the answer you favor, the fact remained that in what seemed a free fall for many in the industry; stock prices of these public companies plummeted downward as each Quarterly Statement was published. Large investors in both the United States and Canada who once thought they had a tiger by the tale began to head for the exits, divest their interests and pair the remaining survivors down to bare bones. While many investors scratched their heads, many industry survivors smiled and began to go on the offensive. These once not so big Ambulance Services, especially in the metropolitan areas in Massachusetts and NH, for example, now became not so small companies in their own right with a thirst for blood and profits as they saw that they had finally had their opportunity to make their service mark.
Today, not only do you see the ruminants of one national company in, AMR, who once dreamt of becoming the King of the Private Ambulance Industry in MA and NH, but you see the results of a market share battles that determined local companies with names like EasCare, Fallon, Cataldo, Lifeline, CarePlus, Rockingham, Action, MedTrans and a number of other familiar mobile Ambulance billboards refused to lose. And they didn’t.
You see many of these local ambulance services survived because their owners had learned a few basic business lessons well. Lessons like:
1. Never take your “customers” for granted.
2. Always keep your prices fair, competitive and justifiable.
3. Insure that every employee that wears your uniform knows the meaning of “Quality Customer Care” and how to show it.
4. And, above all, follow the Golden Rule.
In fact, these few important lessons served so many companies so well in a very competitive industry that by staying true to their mission, the founders of these business not only left their off springs successful legacies upon which to continue to build a bright future for their children; but a bucket of money as well. It was not bad for Mom and Pop either as they finally check out Vacation Destinations on line on a regular basis.
And yet, as in any business, a reputation is not something to rest on for very long and if you start to get too cocky and start counting your money instead of your blessings; you’re just asking for trouble. Unfortunately, as in other industries, we are beginning to see several Ambulance Services getting greedy by apparently feeling no concern for the financial plight that many patients and families are feeling in these very difficult economic times.
Over the past couple of years, we have see several large local Ambulance Services with some very familiar names now charging exorbitant rates for just Basic Ambulance Transportation for the sick and elderly at hospitals who are still fooled into using Exclusive Contracts with these companies with skyrocketing rates while in practice restricting any open competition that can drive the cost of Medical Transportation down for their patients and their families.
It is hard to imaging in this era of Healthcare Reform how the Senior Management at many hospitals in Massachusetts and New Hampshire can sit back and ignore such an important issue for so many families in their local community by allowing Exclusive Contracts to still be SOP in the industry. It also makes you wonder if the companies who have introduced skyrocketing rates have forgotten who built their businesses in the first place…their CUSTOMERS!
It is hard to understand how quality Ambulance Services like EasCare and Armstrong can continue to offer competitive, reasonable rates for Medical Transportation, while other turn a blind eye the plight of the hospitals patients and their families during these difficult economic times. We still see Private Ambulance Companies who still continue to charge exorbitant rates and don’t seem to have to worry about their Exclusive Contracts” because the hospital refuses to open up its Medical Transportation Program to allow Patients a CHOICE and the ability to MAKE AN INFORMED DECISION even though they are paying the bill.
How does this make any sense? If anyone at any of these hospitals with Exclusive Ambulance Contracts has an answer they would like to share, please contact me at www.ReDiscoveringHealthcare.com and let me know. For the life of me, I can’t understand why a hospital would not want their patients to be aware of service alternatives that might help them to lower the cost of healthcare. Can you?
And, if you can’t, at least maybe you can allow your patient and their families to pick a few good mushrooms while you still keep them in the dark!
(Rick Doherty is the President of the Doherty Group, Inc. and conducts Impact Events and Impact Workshops for Healthcare Associations, Corporate Organizations and Healthcare Facilities nationwide. Visit www.Re-DiscoveringHealthcare.com or email Rick directly at RD@Rick-Doherty.com for more information.)
