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California County Chooses Smaller Ambulance Service

In a close vote Tuesday, Santa Clara County officials chose a new ambulance company, rejecting arguments that the public still doesn't know what it's getting and that the winner low-balled the true costs of transporting patients to hospitals.

"There's been a lot of public outreach and a lot of scrutiny," Supervisor Mike Wasserman said in the board's chamber. A newcomer elected only a month ago, he cast the swing vote for Rural/Metro, an Arizona-based company that serves San Diego and a handful of smaller cities in San Diego County, plus communities in 19 other states.

The stakes Tuesday were high in both financial and health terms. The five-year contract is valued at about $45 million a year, depending on how well Rural/Metro collects from a wide range of patients and health insurers -- from penniless transients to Medicare and health maintenance organizations.

Starting in July, Rural/Metro will replace American Medical Response, which held the contract for the past seven years. Its predecessor had the contract for about 30 years. "We're disappointed," AMR CEO Thomas Wagner said after the vote. Wagner called the winner's bid suspiciously low and said the county should have hired independent analysts to scrutinize the proposal.

For example, he said, Rural/Metro could not possibly collect more than $50 million it expects from impoverished patients or from Medicare and HMOs, which pay far less for ambulance rides than other health plans. "Our argument is that you haven't done the job you should have done, and the process is flawed," Wagner said about the county's negotiation with Rural/Metro.

He said AMR will consider filing a lawsuit based on state law that forbids false bids on public contracts. Rural/Metro spokesman Michael Simonsen said the contract is "well-thought and responsible," adding: "There is no doubt we can deliver." Supervisors Ken Yeager and Liz Kniss voted against the contract, saying the public didn't have enough time to look it over. They suggested sponsoring a workshop or two and delaying the vote to early next year. "It just needs a little more time for the public to understand and to embrace it," Yeager said.

In some respects, Simonsen said, AMR's charges were too high. For example, he said Rural/Metro will charge about $35 for an ambulance ride from Gilroy to Valley Medical Center in San Jose, less than half what AMR charges. In casting the deciding vote, Wasserman said he'd had ample time to study the contract online and catch up on public hearings held on the contract over the past two and a half years. He said Rural/Metro's critics couldn't back up their suspicions.

Under questioning from Kniss, County Executive Jeff Smith -- who favored Rural/Metro's bid -- said there were enough safeguards in the contract to protect taxpayers and patients. For example, he said the county would monitor ambulance service daily, report to the supervisors every three months and require Rural/Metro to set aside millions of dollars the county could tap if it has to take over ambulance service.

Also Tuesday, Smith outlined a preliminary plan to trim about $56 million from the county's 2010-11 general operating budget. The $2.1 billion spending plan approved in June fell out of balance after the state and federal governments lowered financial support to the county.

Smith and county department heads are recommending a number of spending cuts and changes in the way the county captures revenue from sources such as Medi-Cal and food stamps. Smith also calls for eliminating six vacant positions.

Next month, Smith will present the board with phase two of his plan, which will include the potential reduction of an additional 116 positions -- some of them currently filled.

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