Santa Clara County threatens to yank Rural Metro's ambulance contract

April 28--A year and half after taking over 911 calls for 14 Santa Clara County cities and its vast unincorporated areas, the Rural Metro ambulance company has violated its contract by repeatedly responding too slowly to emergencies, has paid more than $4.7 million in fines and faces the threat of the first paramedics strike in recent history.

County Executive Jeff Smith said last week that with just one more contract violation of the type that occurred in 2011 and twice in 2012 the county may have to consider terminating the agreement with the Scottsdale, Ariz.-based company, which was notified Jan. 18 that it was in breach of contract. Rural Metro's performance is being closely watched in part because of the process under which it took over the county's ambulance contract from a longtime incumbent in 2011.

"We've made it clear to them we have remedies that go beyond fines," Smith said. "We've specifically told them that if you can't perform, we're going to cancel the contract and start all over again."

Although the ambulance company's failures to meet required response times of less than 12 minutes affected only a small fraction of the roughly 6,500 trips Rural Metro makes each month, Smith and other industry watchers called the breach significant.

"It's not significant to the point where any patients were put at risk," Smith said, "but weaknesses in the system could have been exploited by a disaster -- and therefore it's not acceptable."

After initially denying the violations occurred, Rural Metro has since submitted to county officials a "system enhancement plan," and its California spokesman Michael Simonsen notes: "We haven't been out of compliance since, and we don't plan on ever being out of compliance again."

Simonsen emphasized the late response times that led to the contract violation amounted to a few calls in October and December of last year -- and that in other months, Rural Metro responders exceeded the response time expectations. The county requires ambulances to arrive in less than 12 minutes 90 percent of the time.

"The breach occurred several months ago, it's almost old news at this point as far as I'm concerned," Simonsen said. "But we take it very seriously. There's no question that while it's literally a fraction of a percentage, literally a handful of calls, that caused us to fall below the 90 percent, we still take it extremely seriously."

Rural Metro took over the county's main ambulance contract for its 1.8 million residents in July 2011, after beating out the provider of more than 40 years, American Medical Response, with a far cheaper bid. The $375 million contract award followed years of study and a bitter battle between the two national ambulance chains that made the final cut.

The resulting 5-year contract is considered exceptionally tough, with fines for performance failure amounting to more than 10 times what the previous provider faced.

Rural Metro has paid hundreds of thousands of dollars a month in these fines, now totaling more than $4.7 million, for such things as failing to have three ambulances ready to deploy and for each minute they have been late to emergency scenes. That revenue goes into a special "trust fund" managed by county emergency medical services staff members. The trust fund has been used in part for public service announcements, training, conferences and staff recognition.

Just two weeks into the contract, Rural Metro failed to meet its response times in a northern section of the county, arriving within the 12-minute required time frame only 83 percent of the time. Similar violations occurred again in October 2012, when they came closer but fell short with an 89.57 percent rate. And then in the San Jose area in December, the response again fell below 90 percent; an 89.66 percent rate. The two violations within six months of each other triggered the January "material breach" of contract.

The 90 percent response time requirement is standard industrywide, and had not been missed by AMR in more than 10 years in the county, according to that company's west coast CEO, Tom Wagner.

Milpitas Fire Chief Brian Sturdivant said his community was excited when Rural Metro took over, because they were going to get an additional two "posts" -- which means ambulance workers stationed in a trailer at firehouses ready to deploy around the clock. Instead, Sturdivant's firefighters describe occasionally waiting longer for ambulances to come after the first responders arrive on crisis scenes. The "response time issues" he described include waiting "an extended amount of time with active CPR in progress on critical calls."

Meanwhile, labor unrest could add even more pressure to an already touchy situation. On April 17, Rural Metro's employees -- who include paramedics, emergency medical technicians, dispatchers and vehicle supply staff members -- voted 97 percent in favor of authorizing their bargaining team to call a strike as a last resort. The last time a similar vote was taken was in 1993 in Alameda County, and one occurred in San Mateo County in 1988.

As talks continue, both sides say they are hopeful an agreement will be reached. But backup plans are in place, company and county officials confirmed. Neither would elaborate on details.

The ambulance company's woes have yet to be discussed publicly by county supervisors.

But Supervisor Joe Simitian, the sole board member who is newly elected and did not vote on the ambulance contract, said he had cause for "serious concern" about Rural Metro's performance to date. "If they haven't got it right, they need to get it right," he said, "and they need to get it right quickly."

Contact Karen de Sa at 408-920-5781.

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