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Information about town support funding for NorthStar

Every one of the towns served by NorthStar help to support the operations of the ambulance service.  Many ask, however, just how this support is determined and where the money goes.  This page will try to describe what the money is all about.

Unfortunately, the days of all-volunteer Emergency Medical Technicians (EMTs) are in the past.  One reason is that today’s EMTs are required to have extensive training.  Volunteers find they do not have the time or the money to keep up with this training.  Another reason is that communities have come to expect reasonable response times, which means that bases must be manned during all peak call times.  A service cannot depend on volunteers to commit to that kind of service.  New life saving equipment has revolutionized Emergency Medical Services (EMS) in the past few years.  And the staff needs to be continually updated on its use to be effective when the call comes in.  Fewer and fewer volunteers work where they live so the pool of trained, expert EMTs dries up unless they can be offered a living wage to pursue their vocation.  And NorthStar wants to assure that the highest appropriate level of EMT responds to the call so most of our full-time staff are at the paramedic level - the highest trained but also the highest paid.

EMS services like NorthStar must pay their employees as any other company would.  In fact, NorthStar’s staff related expenses (wages, benefits, workers comp, training, uniforms, etc.) are close to 75% of its total expenses.  But we are creating jobs in the community so that people can continue to live, work, and play locally.

Of course, there are other expenses involved in being ready throughout the service area 24 hours a day, 365 days a year.  One such expense is NorthStar’s fleet of state-of-the-art, well maintained ambulances (and the fuel to run them).  To assure that the ambulances are ready to go anywhere, anytime, no matter what the weather requires a high amount of preventive and other maintenance.  And to reinforce this dependability, NorthStar replaces its ambulances on a rotating schedule by purchasing two to three ambulances every year.  The costs for keeping the fleet up to these high standards (including the vehicle insurance) account for about 10% of NorthStar’s expenses.  If you were wondering, a new ambulance costs about $145,000. To get the best benefit for the service (and for the towns), NorthStar often "remounts" the back of the ambulance onto a new chassis.  This costs about $90,000.  Because safety and reliability are so important, NorthStar rarely purchases used vehicles.

Medical and office supplies, base maintenance and rent, billing support, building depreciation, utilities, accounting, information services, laundry, and all the other necessary costs of running a top-notch community emergency medical service add up to the remaining 15%.

It comes as a surprise to many that keeping just one ambulance (and a crew of two) available around the clock costs about $425,000 per year.  NorthStar has an average of just over six ambulances staffed and ready every day throughout the greater Franklin county area, with another five ’trucks’ in reserve for backup, emergencies, mass casualty incidents, long distance transfers, and events.

Under agreements with Franklin Memorial Hospital, there is no funding for NorthStar’s services from FMH (and if NorthStar generates an excess in any year, none of that excess is returned to FMH - it is all plowed back into NorthStar to improve the service).

So... What pays for all these expenses?

When NorthStar transports a patient, the patient’s insurance (or Medicare or Medicaid or the patient themselves) is billed.  NorthStar receives the income from these bills.  With very few exceptions, it is only when a patient is transported that NorthStar receives any income.  In part, this no-transport-no-fee is a community service but, more importantly, Medicare and every insurance company will pay only when there is a transport.  If medication is given, NorthStar may charge a patient even if they are not transported.  There is a small amount of other income from donations, event charges, and conference sponsorship.

All this income from patients, insurance, Medicare, Medicaid and donations is not enough to cover the expenses for the type of service that our communities want and expect.  In fact, this income only covers about four-fifths (79%) of the expenses.

That difference - between all the income and all the expenses - is the subsidy.  This is the approximately $850,000 that is contributed to NorthStar by all the towns and townships in subsidy support.  It has nothing directly to do with the number of "runs". (Although you could say if there were more runs, there would be more income, which might lessen the subsidy!)  The amount of this subsidy allows NorthStar to break even each year - no loss, no gain.

But the real issue, of course, is how to divide that total subsidy fairly and equitably amongst all the towns and unorganized townships.  Various formulas have been tried in the past.  The NorthStar Advisory Board originally reviewed hundreds of different possibilities and formula options.  In 2006, the Board affirmed a methodology for allocating the subsidy for the fiscal year that began in July 2007.  This formula includes elements of population, housing units, residential valuation, and distance from the center of NorthStar’s population area.  The Board and NorthStar have kept this same basic formula (with some minor adjustments) every year since that time.

So, the "simple" answer is: the subsidy money helps assure the continuing presence of an ambulance service that is ready to respond 24/7/365 with highly trained, well equipped and professional staff in well maintained, state-of-the-art ambulances achieving reasonable response times throughout the 2,800 square miles that NorthStar serves.

Your subsidy support allows NorthStar to give you the powerful backup capabilities of a regional ambulance service and yet keep a local community focus.  NorthStar is not only ready to respond to any emergency but is there to help in your neighborhood schools, visit the shut-ins down the street, install Lifeline services at your mom’s place, and offer free blood pressure and other educational clinics in your town.  We are there for you.

Please take a few minutes to browse around NorthStar’s web site and become more familiar with the outstanding and wide-ranging services that NorthStar provides its rural communities. 

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