# Fleet reduction



## sallain (Oct 17, 2011)

Hello,

I'm proposing to reduce our ambulance fleet from two ambulances to one. A little background as to how I came to this decision.

We currently have a fleet of two ambulances with one inservice 24/7/365 and run a little over 400 calls annually.

Both ambulances are stocked identically, but only one is inservice at one time. Our service replaces one ambulance every five years. 

This year we were to purchase a new ambulance but with revenues down and tight budgets it's being pushed until next year. Since I began as EMS Director in March of this year. I always questioned why we have one ambulance just sitting there fully stocked for back up when one is out of service.

With that being said I actually looked at call volume we're missing by having the first ambulance already on a call. Last year that number was only 43. With our current staffing model I can't think of a cost effective model to staff the second ambulance to make it worth while. It should be noted that we have a neighboring EMS service who has agreed to let us utilize an ambulance when we are down and the county has a back up ambulance that EMS services can use for $35/day.

Now that we have two potential buyers of our 2002 Horton, I was proposing selling the ambulance this year utilizing that money in whatever way the commission wished. During the year with one ambualnce I could document all of our out of service times dates. When it comes time to purchase an ambulance next year they can make an educated decision as to build the fleet back up to two ambulances, or hold off on a purchase until 2014 when the other ambulance is ready for replacement.

My thoughts for the potential cost savings are obviously the stocked medical supplies in each ambulance. When upgrading computers (MDTs), Defibrillators we have to buy two to maintain consistency between each ambulance. Also I was thinking buy trading the ambulance in every five years we would be saving five years of depreciation by only keeping one ambulance. That's the point the board is not seeing. They think the savings will be little if any by getting rid of the second ambulance and that the only savings will be the medical equipment/supplies on the ambulance.

I'm not seeing what they're talking about. If anyone has had a similar situation or can educate me on the depreciation value of ambulances. I open to any suggestions or ideas.


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## bigbaldguy (Oct 17, 2011)

What happens in the event of a catastrophic failure like a fire or major accident. Would you be able to use the neighbors truck for weeks and possibly months if need be?


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## sallain (Oct 17, 2011)

I'm not sure about we could utilize our neighbors for weeks, but definately could utilize the county ambulance if needed.

Good thought tho!

Thanks!


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## bigbaldguy (Oct 17, 2011)

Is this a volly or paid service? 911 or IFT. If you guys are 911 do you have mutual aid agreements. Being able to use the county truck is good but are there other services that also are able to use it. What if they need to use it at the same time? Is the county truck stocked the same way yours is.
Also keep in mind that by going to one truck you start putting twice as many miles and hours on the remaining truck. With no back up maintenance often gets put off which can cause additional issues. 
Is the truck you are thinking about selling paid off? Exactly how much is it costing you to keep the second truck outside of the on board items? How much is the truck realistically worth in a sell off? How difficult would it be to replace the truck in the near future with a similar truck? By going to one truck you loose a great deal of flexibility.


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## sallain (Oct 17, 2011)

We're a 911 emergency paid on-call service. We do have mutual aid agreements with surrounding districts. With having one ambulance we would have priority over other services using it for training or a back up ambulance.

I've thought of a lot of the things mentioned in your last quote. My question to you is do you think there is any significant cost savings to be had by getting rid of an ambulance every five years as opposed to keeping it an additional five years?

I still need to do some research but I was thinking not only would we be saving money by not stocking the second ambulance but would be saving money of five years of depreciation.


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## ArcticKat (Oct 17, 2011)

So, if I understand this correctly, you have two ambulances, but paid staff for only one.  How much revenue are you losing from those 43 calls?  We do about the same call volume as you and have three ambulances, 2 are front line and the third is a mechanical spare that can respond if needed.

If I need that third one staffed I pay the crew double time to go on the call.


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## sallain (Oct 17, 2011)

We are a paid on-call department of which most of the members reside outside the district and are paid minimum wage. The 10 members that reside in the district typically work outside the district during the day and If I were to put it into service I'm not sure I would be benefiting the patients as I think we would just be delaying patient care and then after we weren't able to gather a crew mutual aid would be sent.

I agree with everyone that it is very nice having the back up ambulance when you need to complete maintenance, but just wondering if there would be some significant cost savings by not having two?

Thanks!


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## DrParasite (Oct 18, 2011)

400 calls a year?  that averages to a little more than one call a day.

the biggest reason to keep the 2nd ambulance is you have an ambulance when your primary one breaks down.  or goes out for PM.  even just to rotate the trucks so you don't have all the mileage being built up on 1 truck.

question: why do you replace trucks every 5 years?  my old agency replaced trucks once they were 10 years old, or had 100,000 miles on them.  true, we ran about 4000 calls a year over 4 trucks, but the prinicple is the same.

Question: what is the cost expenditure for you  having two trucks?  other than insurance, what expenses are there?  and no, I don't consider the equipment (oxygen equip, spints, etc) to be a cost, because they are used when the ambulance is used and restocked when needed.  just having the equipment on the truck is like having a portable storage area, which happens to be on a truck

also, two trucks means you have have one out on a standby, PR event, High school football game, dog and pony show, etc, while leaving the second ambulance available for 911 calls.


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## AlphaButch (Oct 18, 2011)

That second ambulance is a sunk cost. The actual value of the sitting ambulance should be weighed against the real and potential economic loss at the current time. What can it be doing now to earn money? What liability costs are you looking at incurring if your primary truck goes down and you are unable to get a secondary in time for an adequate response (remember, you won't have to just get the truck, but stock it up most likely)? What are the current operational costs of keeping the truck (fuel, insurance, storage)? Do your mutual aid agreements or state agreements require you to supply any resources? What value would the immediate capital gain (10-20k) allow you to provide? 

Are you buying whole ambulances or just remounting? Are you putting enough miles or wear/tear on these ambulances to actually warrant replacement? 

Have you thought about putting the trucks on rotational use and replacement based on mileage as already mentioned? This would most likely be the best way to cut back on costs while still ensuring that you are still going to be able to budget in a truck in later years. 

As for equipment, you aren't spending any extra money. You're just storing your secondary/backup equipment in an ambulance.


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## mycrofft (Oct 18, 2011)

*Don't factor in amortization of a specialized vehicle or medical equipment,*

And make sure the bean counters know the difference between medical equipment (reusables) and medical supplies (consumables). Also biomedical equipment (pulse ox, AED) versus simple medial equipment (laryngoscope, BP cuff).

 Unless a highly specialized vehicle like an ambulance is in high demand for a price worth selling it, it is, as was said "sunk money" (let's say "dedicated permanent expenditures"?). In other words, trivial mileage and weather damage while sitting around will be your biggest losses, not "wear and tear" since it is quiescent.

Hm. Would the joint use by two or three jurisdictions make sense? Or leasing it out with right to reclaim it for emergencies?

I guess the overriding reason to keep it would be the ever-escalating increase in replacement price.


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## chuck stank (Oct 18, 2011)

Using the second one for special events seems like a good idea. Maybe a good way of generating some additional revenue.


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