Nashwauk is considering losing ambulance services

Ambulance
An ambulance at Hennepin County Medical Center in Minneapolis.
Tim Post | MPR News 2009

During a medical emergency, you can count on an ambulance to likely be at your home within 10 minutes. Sometimes those minutes matter. But a city in the Iron Range is at risk of losing that critical service. The city of Nashwauk, Minn., says they are considering selling their ambulance service.

Aaron Brown joined Minnesota Now to explain why this is happening and the impacts it could have on this small rural community. He runs the blog “Minnesota Brown” and is also a radio show host and college professor.

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Audio transcript

CATHY WURZER: During a medical emergency, you can count on an ambulance to likely be at your home within about 10 minutes. And sometimes minutes matter. But a city on the Iron Range is at risk of losing that critical service. The city of Nashwauk says it's considering selling its ambulance service. Here to explain why this is happening and the impacts it could have on this small rural community is Aaron Brown. Aaron writes the blog Minnesota Brown. He's also a radio show host and a college professor. Always good to talk with you, Aaron. How are you?

AARON BROWN: I am well. Good to hear from you, Cathy.

CATHY WURZER: Likewise. Say, I'm surprised that Nashwauk has its own ambulance service because Hibbing, a larger town, isn't too far away. What's the service area?

AARON BROWN: Well, Nashwauk is a small town, but it serves a very large area. And that's actually kind of the problem. There are 18 townships. And if you know the size of townships, that's a vast array of grids out in the rural area, both north and south of Nashwauk, really from almost the edge of Grand Rapids to the county line between Itasca and St. Louis County. The Nashwauk ambulance serves that whole area.

CATHY WURZER: Wow. I did not know that. So why does the city want to sell its ambulance service? I'm going to assume it must be a money move, potentially.

AARON BROWN: Yeah, it's something they're exploring because of cost. And the issue is not unique to Nashwauk. It is actually an endemic, systemic problem across all of America because emergency services are so often serving people who are on Medicare or Medicaid. And the reimbursement rates for emergency runs are particularly low. And so ambulance services, whether they're private or public, have major cost issues when it comes to serving the people in their areas.

CATHY WURZER: How much is the city looking at when it comes to red ink on this? Do you know?

AARON BROWN: I don't have that number off the top of my head. And in fact, that's one of the things we're trying to figure out is exactly how the financials work out. I've talked to members of the ambulance service and their union representative. And they're concerned because they feel the ambulance service is held to a different standard than, say, the police or fire departments. All are necessary. And yet the ambulance service is held to a standard that it needs to permanently be in the black, making a profit, whereas no one says that about the fire service or the police service.

But that's actually how the whole system works. That's how it's built. And that, in fact, is the big part of the problem. Likely, this is probably just a canary in the coal mine, so to speak, or the iron ore mine, if you prefer, because this is happening in Tower, other Iron Range communities. The ambulance services in the neighboring service areas of Hibbing and Grand Rapids are not in any real position to come in and help, just because of their own financial challenges.

I spoke with the owner of Grand Rapids's service, Meds One, just this morning about that. And the business is very challenging right now. And so it will likely require effort by either or both the state legislature and congress to truly solve the problem.

CATHY WURZER: So do the emergency service workers you talked to, they say that they know that the ambulance service is running at a loss?

AARON BROWN: Well, I think everybody knows that just because the bulk of their calls for-- because Nashwauk, it-- they bring people to the Hibbing hospital or the Grand Rapids hospital, usually the Hibbing hospital. They don't have their own hospital, which means all of their calls are emergency calls.

CATHY WURZER: OK.

AARON BROWN: Emergency calls, between 70% to 80% of them, are people on some kind of government health care, that's Medicare, Medicaid, or the VA. And the reimbursement rate on an ambulance run for an emergency of that kind is capped somewhere around $450. And as the one ambulance service owner told me, that doesn't even really pay for the cost of sending the people out to help the people.

So when 80% of your calls are that and you have no other income service, there's really no way for a service like Nashwauk's, as it's currently composed, to break even.

CATHY WURZER: Ah, OK. Thanks for kind of coloring in the picture for us. So gosh, what are the options? I mean, not having an ambulance service does not seem feasible.

AARON BROWN: Well, that's the one nobody wants. In fact, there was a big turnout to the city council meeting this week to find out more about why that is. And the city is exploring answers. I believe they've indicated they're committed to keeping an ambulance service.

But some of the options for the way forward might include a special taxing district where the townships in the service area band together to form essentially a taxing governmental unit that can raise money to pay for the ambulance to serve the whole region. Each little township pays a little. And then it adds up to enough to keep the service going.

One idea that one of the-- Jim Ducharme, who I talked to this morning, suggested is maybe a Itasca County should form a county taxing district for all of its ambulance services, and that that might actually be a solution for many rural counties to raise enough money to keep their ambulance services going.

After that, the answer is a little tougher. The citizens of the community would have to pay higher taxes. And for a small town like Nashwauk, that's going to be challenging, particularly when they serve a much broader area outside of their city limits.

CATHY WURZER: What I'm thinking, knowing the legislature, a county tax hike would have to probably be approved by the legislature and then go before the county board.

AARON BROWN: Yeah, it would require a taxing authority. And that comes first from the legislature before it's approved by the county, right. So a lot of people would have to line up and get together to work on this for it to actually happen.

And time is of the essence. Jim Ducharme described the situation after we come out of the COVID-19 pandemic is so dire for the ambulance services because they are having a very difficult time recruiting workers, getting EMTs to work, paramedics to work because the industry faced such burnout during the pandemic. They lost a lot of money during the pandemic because hospitals and clinics were so overwhelmed and closed for a lot of things. They're having a difficult time filling out their shifts.

A lot of small services used a volunteer system or a paid on-call system. Finding people who want to work a part-time job in addition to their full-time job has been very difficult lately. People used to have a spirit of, I'm going to throw in at the local volunteer fire department or volunteer ambulance service. But volunteerism has dropped way off in the last several years.

And so if you're going to hire full-time workers, you're going to have to pay them. And that's the problem right now.

CATHY WURZER: Gosh. Could the service be privatized if the city decides to sell, and some other-- I don't know-- business, another hospital system could swoop in and buy it?

AARON BROWN: Absolutely. That's one of the options. In fact, I didn't mention, the council did put out for bids to do just that. I know the two services in the area, the one in Hibbing and the one in Grand Rapids, both are indicating that they are not interested in bidding, but someone else could.

However, there was a kind of a bad twist of fate, I guess. So one of the local health care providers, Essentia, considered making a bid before this even was sent out for more bids and then declined. And so right now, the for-profit services are looking at these rural services and concluding, perhaps correctly, that they're not going to be moneymakers in any sense of the word, which is the challenge with privatization. It generally only attracts interested parties when it's going to turn a profit.

CATHY WURZER: So Aaron, do you know, is there a timeline on this?

AARON BROWN: Yeah, the request for bids runs into, actually, December 15. And they're hoping to make a decision by February 1 of the new year. But those dates are somewhat fluid. If there's an opportunity to extend that if there's an interested party, I'm sure they will. They'd like to resolve this, though, in 2024. They feel that it's urgent to do so.

CATHY WURZER: It looks like there's a meeting on Thursday. Is that right?

AARON BROWN: They met this Tuesday. And they meet again, I think, next week. They're having a community meeting on Monday to have kind of a roundtable discussion about potential solutions.

CATHY WURZER: All right, Aaron Brown, thank you so much for telling us about this story. We appreciate it.

AARON BROWN: Thanks, Cathy. Aaron Brown runs the website minnesotabrown.com. He's a radio show host and a college professor on the Iron Range.

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