Remember the post I put up a few days ago entitled “A Predatory Ambulance Fee”? It talked about how the Elgin, IL city council is planning to help recoup their costs for Fire and EMS services by charging for refusals.

(This is the link if you didn’t read it: “A Predatory Ambulance Fee”)

This just in:

Apparently they’re not done proposing new fees in the city. They seem to be very serious about recouping their costs and finding new ways to monetize their services. According to this article posted on Firefighter Nation, they’re planning on adding quite a few new fees to their repertoire.

Here’s the link: “Illinois Department Considers Charging Non-Residents for Fire Services” Read it and see what you think.

The article only mentions two specific fees, a $500 per hour fee for an engine response and $2200 for “a serious car accident where someone has to be transported by helicopter.” These fees are interesting enough, but the article also hints that there are further fees forthcoming.

The chief is quoted as saying that he expects most of these fees to be covered by insurance. After all, he says… that’s what insurance is for.

The chief may be very correct with that statement; insurance exists to pay for the unforeseen costs of bad things that happen to people who pay for it. Insurance companies pay these costs based upon rigid contracts they sign with their customers and charge their customers rates based upon the average risk they assume on behalf of the customer. They will only pay for what they are contractually obligated to pay for. While I have no knowledge of whether or not insurance will actually pay for the charges Elgin is proposing in practice, I’m assuming the city of Elgin doesn’t either and if they don’t seem to care whether the people they are saddling with these kinds of fees are insured for them or not, why should I?

It’s not like these insurance companies aggregate risk across all of their customers and will pass the overall cost of these fees to everyone in the area causing everyone’s insurance rates to go up, right?

Remember, I am not against fire departments, cities, and/or EMS services finding new and innovative revenue streams or ways to defray costs. The City of Elgin is not a villain here. It is very expensive to operate a service and I completely understand wanting to recoup some of those costs. These kinds of fees are somewhat the result of a rigid and over-regulated EMS payment system that chains our entire industry and squashes most hopes of innovation. I believe in EMS payment reform. In fact, I demand it.

But guys? While you’re by far not the only department in the US proposing and implementing things like this… you’re all opening Pandora’s Box. Your citizens are going to fight this, the press won’t be good, and you may end up creating more of a wave of dissatisfaction than you’re really prepared to endure. Think about Moline, IL and what they’re going through right now. Could you imagine their chances of winning their fight if they had implemented these fees?

Then again, perhaps they should implement them in Moline and let the revenue sources balance their budgets… In Moline they say they’re operating at over a $340,000 budget deficit and maybe these kinds of fees would offset that deficit enough that they could make their EMS financially viable.

Or maybe the marketplace will decide and departments that do this kind of thing will be put “out of business” (for lack of a better term) by competitive forces.

I would be willing to bet that there’s someone out there that would only charge $450 an hour for an engine response and only $2100 for a “serious car accident”. There are probably plenty of people and companies that would be happy to do fire response for profit. That’s what happens when governmental services start acting like monopolies in a capitalistic system, they get replaced by free market alternatives. Back in Ben Franklin’s day the fire service was a private endeavor that was only made public when the cost of providing protection wasn’t profitable enough to serve the ends the people wanted it to serve. Make the fire service profitable and private industry may find a way to make a solid business model out of it. Don’t believe me? Think Fed Ex and UPS versus the US Postal service.

I’m not saying it’s a good or bad thing. It’s why private industry exists. If there’s an opportunity to make money doing something, someone will step up to make money doing it. These fees, if they become lucrative, may just be the opportunity for private industry to find a business model that didn’t exist before.

I am able to understand why Elgin wants to implement these fees… but I think that this is a situation ripe for the Law of Unintended Consequences. If I could give cities proposing these kinds of fees some advice I would tell them they should find every single efficiency within their existing budgets before they set about increasing revenue through raising fees. Make no mistake, within the contemporary political climate; citizens are going to scrutinize every aspect of your budget when you start trying to get them in the wallet. You may not like what they find.

I don’t have the ultimate answer but I’m keeping an eye on this story. You should too.

Soon to be the corporate ladder?