The Cost of Saving Money

There are two fundamental ways to save money: either cut your budget and make do with less resources or invest in process efficiency to cut future expenses while continuing to provide at least the same level of service.  These are important considerations as the costs of doing business clearly continue to increase, whether we consider the expenditures on goods used in providing a service or the price of fuel used to deliver that service.  At the same time, the ability to effectively raise the price of the delivered service in order to recoup those additional expenditures is not typically possible.  This paradox leaves many ambulance services in a quandry.  If your decision is to continue operating at a diminshed capacity to reduce spending, there is probably little advice I can offer.  But if cutting service is not a prudent long-term option, then we can look at how an agency looks to improve performance.

A good case study may be the Lexington County (SC) EMS, a service directed by Brian Hood responding to roughly 30,000 calls per year.  As a growing county outside one of the largest cities in South Carolina, Lexington has seen their call volume grow at an annual rate of about 7.5%.  To keep pace with this growth in demand, they would likely have needed to add one new vehicle per year at a cost exceeding $3M for an ambulance, crew, station, equipment, etc.

Additionally, one of the ongoing, and rapidly growing expenses, for any service delivery organization is the rising cost of fuel.  Controlling mileage can often be a great option for managing expenses.  Of particular interest to some services is also the incurring of fines for exceeding response times.  This is a particularly good area to control costs for affected services since this type of expenditure does not lead to any revenue nor does the payment itself provide any service.  But to achieve these goals, performance must improve.

High Performance EMS is about doing things better – specifically providing advanced pre-hospital care with a focus on higher economic efficiency.  The result of better performance is patient satisfaction with cost savings.

For Lexington County, the more efficient posting of ambulances based on predicted demand and time-based routing using MARVLIS has allowed the service to actually improve response in the face of rising demands while foregoing the acquisition of additional resources and the commitment to ongoing costs associated with them.  Over the 4 year period since implementing MARVLIS, the projected cost savings of $3M per year is compounded by the avoidance of recurring staff costs and therefore totals closer to$16M for that period.  The initial investment required to make that savings was less than $400K in hardware and software systems.  As a result, satisfaction has improved for both the patients (who experience quicker service), and also staff (who endure fewer post moves while being closer to incoming calls.)  This is not just a promise or hope of what might happen, but a real world experience of leveraging county GIS services and an experienced High Performance EMS consultant, Bradshaw Consulting Services.  Watch for a more detailed article soon from Esri Press.

Advertisements

2 Comments

Filed under Case studies, ems

2 responses to “The Cost of Saving Money

  1. This article has been edited since the original posting in order to clarify the nature of the cost savings.

  2. A press release is also available now on this story through i-newswire. Please view it at: http://www.i-newswire.com/lexington-county-ems-investment/112796

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s