4-0900-8237-2
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE MINNESOTA DEPARTMENT OF HEALTH
In the Matter of the License FINDINGS OF FACT,
Application of Scandia CONCLUSIONS OF LAW
Valley Ambulance Service, AND RECOMMENDATION
Cushing, Minnesota
The above-entitled matter came on for hearing before Administrative Law
Judge Peter C. Erickson at 7:00 p.m. on October 11, 1993 in the Scandia Valley
Town Hall, Scandia Valley Township, Minnesota. The record in this matter
closed on November 8, 1993, the date of receipt of the last post-hearing
submission from the public.
Herb Bloomquist, Secretary of the Scandia Valley First Response Team,
Route 1, Box 258, Motley, Minnesota 56466, appeared on behalf of the Scandia
Valley Ambulance Service, Applicant herein. There were no intervenors in this
matter. However, representatives of Murphy Morrison County Ambulance, Inc.,
appeared and testified in opposition to the application. Approximately 300
residents of the proposed primary service area (PSA) were present at the
hearing in support of the application.
This Report is a recommendation, not a final decision. The Commissioner
of Health will make the final decision after a review of the record which may
adopt, reject or modify the Findings of Fact, Conclusions, and Recommendations
contained herein. Pursuant to Minn. Stat. 14.61, the final decision of the
Commissioner shall not be made until this Report has been made available to
the parties to the proceeding for at least ten days. An opportunity must be
afforded to each party adversely affected by this Report to file exceptions
and present argument to the Commissioner. Parties should contact Mary Jo
O'Brien, Commissioner, Minnesota Department of Health, 717 Delaware Street
Southeast, Minneapolis, Minnesota 55440, to ascertain the procedure for filing
exceptions or presenting argument.
STATEMENT OF ISSUE
The issue to be determined in this proceeding is whether the Applicant's
appli cation to provide basic life support ( BLS) services in a two-township
area of northwestern Morrison County should be granted pursuant to the
standards set forth in Minn. Stat. sec. 164.802, subd. 3(g)
Based upon the record here in, the Administrative Law Judge mak es the
following:
FINDINGS OF FACT
BACKGROUND AND PROCEDURAL HISTORY
1. The Applicant has applied to provide BLS ambulance services in a
two-township area (Scandia Valley Township and Rail Prairie Township) located
in northwestern Morrison County. Advanced life support (ALS) ambulance
services have been and continue to be provided by Murphy Morrison County
Ambulance, Inc., whose PSA includes Scandia Valley and Rail Prairie
Townships. These townships are in the very northwest portion of the Murphy
Morrison PSA. In August of 1991, Murphy Morrison closed its base at Randall,
but continued to operate out of its main station in Little Falls. Randall is
approximately ten miles from Scandia and Rail Prairie Townships; Little Falls
is more than 20 miles from parts of the townships. Scandia Valley provides
First Response Team services for Murphy Morrison Ambulance runs into Scandia
Valley and Rail Prairie Townships.
2. Subsequent to Murphy Morrison's abandonment of the Randall
substation, the response time for ambulance runs out of Little Falls to
Scandia Valley and Rail Prairie Townships became significantly longer.
Consequently, the Scandia Valley First Response Team, with unanimous support
from the residents of the two townships, submitted an application to the
Commissioner of Health to provide BLS services to a PSA which includes only
Scandia Valley and Rail Prairie Townships. The Applicant readily concedes
that if Murphy Morrison were to reopen its Randall substation, the Application
now being considered would be withdrawn.
3. On June 23, 1992, the Applicant submitted an Application to the
Commissioner of Health requesting licensure as stated above. Amendments to
the Application were filed in April, 1993. On September 2, 1993, Commissioner
Mary Jo O'Brien issued a Notice of Completed Application and Notice of and
Order for Hearing scheduling a public hearing to consider the Application on
October 11, 1993 at the Scandia Valley Town Hall. Notice of the hearing was
published in the Morrison County record on September 12 and 19, 1993.
Additionally, the Notice was published in the September 7, 1993 issue of the
State Register. Notice of the hearing was served upon the Morrison County
Board of Commissioners; the Community Health Board for Cass, Todd, Wadena and
Morrison Counties; the Central Minnesota EMS Council; the Scandia Township
Board; the Murphy Morrison County Ambulance Service; and North Ambulance
located in Brainerd, Minnesota.
DESCRIPTION OF THE SERVICE
4. The Applicant proposes to provide an all-volunteer, non-profit
ambulance service operating out of the Scandia Valley fire department which
expects to make approximately 45 BLS runs in the first year if the Application
is granted. The proposed ambulance service will serve a population of
approximately 925 year-round residents and approximately 2,500 visitors during
the peak summer tourist months. The Applicant estimates annual revenue from
operations of $20,800 and annual non-operating revenue of $975. The Applicant
did not, however, make an estimate of total annual expenses. If the
Application is granted, the Applicant will purchase a type 11
ambulance with all of the necessary equipment.
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5. The Applicant has mutual aid assistance and backup agreements with
North Ambulance located in Brainerd and the Staples Ambulance Service located
in Staples, Minnesota. The medical director for the proposed ambulance
service is Dr. Randy Peterson, M.D., located in Staples, Minnesota. The
United District Hospital located in Staples will be affiliated with the
proposed ambulance service.
6. During 1992, the Applicant, who now furnishes First Response Team
services for Murphy Morrison in the proposed PSA, had an average response time
of three minutes to the scene of the "pick-up". The Murphy Morrison average
response time was 23 minutes, sometimes with the help of the First Response
Team to direct it to the site. During the first half of 1993, the First
Response Team had an average response time of four minutes and Murphy Morrison
averaged a response time of 25 minutes. The Applicant estimates that from its
proposed base station in Scandia Valley Township, its maximum response time to
the most distant point within the PSA would be 18 minutes and the average
response time would be ten minutes. The maximum distance from the Applicant's
base of operations to the farthest point in the PSA is 11 miles.
RELATIONSHIP TO COMMUNITY HEALTH-PLAN
7. The Morrison County Community Health Services Plan states that
"there is a lack of financial support for accessible emergency medical
services." A stated goal is "to assure coordinated emergency medical services
that provide access to timely intervention of life-threatening emergency
situations." One of the stated objectives is to "support efforts to have
coordinated Emergency Medical Services (EMS) available to Morrison County
residents within an average of ten minutes of their call for help."
8. In a letter dated October 27, 1993, the program director of the
Central Minnesota EMS Council commented on the application considered herein
as follows:
On October 21, 1993, the CMEMS Council Board of Directors
voted unanimously to inform you and the Minnesota
Department of Health EMS Section that the Central MN EMS
Council highly encourages Murphy-Morrison County
Ambulance Service to establish a substation in the
Scandia Valley area with the financial assistance and
volunteer support of the Scandia Valley First Response
Team and Rail Prairie Township. Furthermore, the Board
stated that they do not support encroachment of any
primary service areas.
COMMENTS OF GOVERNING BODIES AND PUBLIC OFFICIALS
9. The Morrison County Sheriff, Paul M. Tschida, commented in support
of the application herein. Sheriff Tschida states that because the Scandia
Valley area is located some distance from the four area hospitals (Brainerd,
Long Prairie, Staples, Little Falls), a quickly responding ambulance service
in the immediate area would be very beneficial for the survival of patients in
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need of emergency medical services. Marge Scudder Brchan, Director of the
Morrison County Public Health Services, stated in a letter dated December 20,
1991, that:
The loss of Murphy's Satellite Ambulance Station in
Randall, dramatically impacts timely intervention to the
northwest corner of Morrison County. Therefore, the
Public Health Services Advisory Board voted unanimously
to support efforts to establish ambulance service to this
area. The Board does request that all possible efforts
be made to work collaboratively with other ambulance
services.
The Morrison County Board of Commissioners adopted Resolution No. 2027 which
"supports the efforts of the Scandia Valley First Response Team to establish
an ambulance service for Scandia Valley and Rail Prairie Townships." William
Block, Chairman of the Morrison County Board of Commissioners, and Ms. Scudder
Brchan refer specifically to the Morrison County Community Health Services
Plan which specifically seeks to "have coordinated emergency medical services
(EMS) available to Morrison County residents within an average of ten minutes
of the call for help."
10. Several hundred letters of support for the proposed ambulance
service were submitted by residents in the proposed PSA and employers who
strongly feel that a local ambulance provider would be very beneficial to the
communities to be served. State Representative Steve Wenzel testified at the
hearing and submitted written comments vigorously supporting the Applicant and
proposed Application.
DELETERIOUS EFFECTS FROM DUPLICATION,OF AMBULANCE SERVICES
11. Murphy Morrison Ambulance presently provides ALS ambulance services
for all of Morrison County Including Scandia Valley and Rail Prairie Townships
in the northwest corner of the County which the Applicant proposes to serve as
its PSA. The record shows that during 1992 and through July of 1993, Murphy
Morrison made 51 runs into the proposed PSA (35 in 1992 and 16 in the first
half of 1993). There is nothing in the record to show what proportion of
Murphy Morrison's total business runs into the proposed PSA are.
Additionally, there is nothing in the record to show what economic impact, in
terms of dollars and cents, the loss of runs in the proposed PSA would have on
Murphy Morrison-
12. Murphy Morrison Ambulance chose not to intervene as a party to
oppose the application herein. Rather, they appeared and testified in
opposition to the application. Murphy Morrison did not, however, offer any
financial data to suggest that they would be adversely affected if the
Application is granted.
ESTIMATED EFFECT ON THE PUBLIC HEALTH
13. The obvious and over-riding effect that granting the Application
will have to the residents of Scandia Valley and Rail Prairie Townships is
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that the response time for ambulance services will be cut by over half in most
cases. People in need of medical services will be in route to a hospital much
quicker if the ambulance is dispatched from the Scandia Valley Fire Department
than if the ambulance comes from Little Falls. As a general rule, there will
be less morbidity due to the earlier intervention of trained medical
personnel. The Scandia Valley First Response Team will continue as first
responders to emergency scenes and to assist the proposed ambulance service
and any ambulance responding to mutual aid.
14. Although the Applicant plans to employ intercepts of ALS ambulance
services if necessary, the proposed service will only offer BLS services at
the scene rather than the ALS services now provided by the Murphy Morrison
Ambulance Service.
15. At the present time, the Scandia Valley First Response Team operates
with a medical director granted variance in the use of de-fibrillator
capabilities and PTL (pharyngeal tracheal lumen). The Applicant will request
that this variance be extended to the ambulance service if the Application is
granted.
BENEFIT TO PUBLIC HEALTH VS. COST OF THE PROPOSED SERVICE
16. The Applicant asserts in its application that the average patient
charge for an ambulance run in its proposed PSA will be $320.00. Under the
category of expenses in the application, the Applicant lists only an expense
for estimated uncollectible accounts in the amount of $1,600.00. The
Applicant estimates that its annual income from operations will be $20,800.00,
and its annual non-operating revenue will be $975.00. As of July 15, 1993,
the ambulance fund checkbook showed funding in the amount of $8,888.51; the
first response checkbook showed funds specified for the ambulance service in
the amount of $1,307.85; the Lake Alexandria property owners had funds
specified for the ambulance service in the amount of $4,000.00; and money had
been pledged for the ambulance service in the amount of $1,195.00. These
funds total $15,391.36. In addition, 50 letters of support stated that if the
ambulance is approved, donations would be forthcoming.
17. The Applicant stated that if the application is approved, it would
purchase a Type II ambulance with all of the necessary equipment. The
application does not, however, estimate any expenses for the items of
insurance, medical supplies, gas, vehicle repairs, administrative or clerical,
legal, or office expense and postage. Additionally, the Applicant assumes
that all of its staffing and personnel will be on a volunteer basis only.
Thus, no wage expense is contemplated.
Based upon the foregoing Findings of Fact, the Administrative Law Judge
makes the following:
CONCLUSIONS
1. The Administrative Law Judge and the Commissioner of Health have
jurisdiction in this matter pursuant to Minn. Stat. 14.50 and 144.802. The
Notice of Hearing was proper in all respects and all procedural and
substantive requirements of law and rule have been fulfilled.
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2. Minn. Stat, Minn. Stat. 144.802, subd. 3(g) provides:
The Administrative Law Judge shall review and comment
upon the application and shall make written
recommendations as to its disposition to the commissioner
within 90 days of receiving notice of the application.
In making the recommendations, the administrative law
judge shall consider and make written comments as to
whether the proposed service, change in base of
operations, or expansion in primary service area is
needed, based on consideration of the following factors:
(1) the relationship of the proposed service . . .
to the current community health plan as approved by
the commissioner . . . ;
(2) the recommendations or comments of the
governing bodies of the counties and municipalities
in which the service would be provided;
(3) the deleterious effects on the public health
from duplication, if any, of ambulance services that
would result from granting the license;
(4) the estimated effect of the proposed service
. . on the public health;
(5) whether any benefit occurring to the public
health would outweigh the costs associated with the
proposed service . . .
The Administrative Law Judge shall recommend that the
commissioner either grant or deny a license or recommend
that a modified license be granted . . . .
3. The Application is both consistent with and supportive of the goals
and objectives of the Morrison County Community Health Plan. The Central
Minnesota EMS Council strongly supports an ambulance sub-station in Randall
(reestablished by Murphy Morrison) due to the need for better access.
However, the EMS Council does not support "encroachment of any primary service
areas". The Judge concludes that the application is consistent with the
stated objectives of the Central Minnesota EMS Council absent a decision by
Murphy Morrison to reopen its station at Randall.
4. The Application has received the support of Morrison County
officials, including the Sheriff and Director of Public Health Services.
5. The record in this matter does not support a conclusion that there
would be any deleterious effects on the public health from the duplication of
services in Morrison County. Murphy Morrison did not petition to intervene in
this matter and did not supply any financial data to suggest that it would be
adversely Affected by a new ambulance service in Scandia Valley and Rail
Prairie Townships. The need for the proposed ambulance service arose solely
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because Murphy Morrison determined to abandon its station at Randall which
served the proposed PSA. Murphy Morrison's failure to participate as a party
to this proceeding mitigates against the Applicant's burden to produce
financial data concerning adverse effects to Murphy Morrison. See, In the
Matter of Rochester Ambulance Service, 500 N.W.2d 495, 499 (Minn. App. 1993).
6. The proposed ambulance service will have a positive effect on the
public heath because much shorter response times will result with an ambulance
service located in Scandia Valley Township. Although the proposed service
will only offer BLS services, as compared to ALS services offered by Murphy
Morrison, the quicker response time and sooner arrival at a hospital outweigh
the lesser level of services.
7. The benefit occurring to the public health will likely outweigh any
costs associated with the proposed new service. However, the Applicant has
not provided detailed expense information concerning its start-up costs and
continuing costs associated with an ambulance service. Although the Applicant
will be a non-profit operation using volunteer staff, there still remains an
over-head expense which has not been completely accounted for in the
application.
Based upon the foregoing Conclusions, the Administrative Law Judge makes
the following:
RECOMMENDATION
IT IS HEREBY RESPECTFULLY RECOMMENDED that the Commissioner of Health
GRANT the application of Scandia Valley Ambulance Service to provide BLS
services to a PSA consisting of Scandia Valley and Rail Prairie Townships
after the application is amended to show greater detail with respect to the
costs of start-up and continuing costs of operation. The Applicant will have
to show that it has committed revenues to enable it to cover costs and keep
service charges at a reasonable level.
Dated this day of November, 1993.
PETER C. ERICKSON
Administrative Law Judge
NOTICE
Pursuant to Minn, Stat. 14.62, subd. 1, the agency is required to serve
its final decision upon each party and the Administrative Law Judge by first
class mail.
Reported: Taped, no transcript prepared.
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MEMORANDUM
The primary issue in this case is whether the abandonment of the Randall
substation by Murphy Morrison creates a need for ambulance services in Scandia
Valley and Rail Prairie Townships sufficient to meet the requirements of Minn.
Stat. 144.802, subd. 3(g). Previous decisions of the Commissioner of
Health, the Minnesota Court of Appeals and the Minnesota Supreme Court, have
generally held that the duplication of ambulance services within a primary
service area is contrary to the aforementioned statute due to the inelastic
demand inherent in the ambulance business. See, In the Matter of the License
Application of Rochester Ambulance Service Commissioner's Order dated
September 30, 1992; Twin Ports Convalescent Inc, y. MinnesotA $tote Board of
Health , 257 N. W. 2d 343 (Minn . 1 977 ) ; North Memorial v. Department of Health
423 N. W. 2d 737 (Minn . App. 1 988) ; In the -Matter -of the Li Ien se Application of
Rochester Ambulance Service, 500 N.W.2d 495 (Minn. App. 1993). However, the
case at hand is unique because it involves the withdrawal of local services in
the corner of a PSA by a licensed provider creating a significantly longer
response time for ambulance runs into the "abandoned" area. The Judge is not
aware of any Minnesota decision which addresses a factual situation similar to
the one presented herein.
The record in this matter shows that the average response time for
ambulance runs by the current provider in 1993 is 25 minutes. This is the
response time for ambulance runs from Little Falls into Scandia Valley and
Rail Prairie Townships which is a distance of 20 or more miles. Prior to
August of 1991, the current provider, Murphy Morrison, provided ambulance
services to the two townships from Randall, approximately 10 miles away.
Minn. Rule 4690.3400, subp. 3.C. states that the maximum allowable time for an
ambulance run within a PSA is 30 minutes. Murphy Morrison's average is under
30 minutes, but nothing was offered into the record to show how many, if any,
runs are longer than 30 minutes. However, there was testimony and written
comments submitted suggesting that ambulance runs longer than 30 minutes were
not uncommon, especially because the Murphy Morrison ambulance drivers were
not familiar with the roads and addresses in Scandia Valley and Rail Prairie
Townships.
The case of Rochester Ambulance Service, supra, holds that the Applicant
has the burden to discover and produce financial data to show that no
deleterious effects will result to current providers in the proposed PSA if
the Application is granted. However, in this case, the provider, Murphy
Morrison, did not petition to intervene and although it chose to testify in
opposition to the Application, did not come forward with any financial data to
support a conclusion of adverse effects if the Application is granted.
Indeed, Murphy Morrison did not even offer an explanation as to why it
abandoned the Randall station. Because Murphy Morrison chose not to be a
party to the proceeding, the normal routes of discovery were not available to
the Applicant. Consequently, the Judge has concluded that the Applicant has
met its burden.
The Findings and Conclusions above state clearly that the Applicant did
not furnish sufficient financial information to show what the actual costs of
the proposed new service will be. The anticipated revenues and expenses must
be much more clearly set forth in the Application to enable the Commissioner
to determine whether the proposed service can be maintained and keep service
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charges at a reasonable level. Consequently, the Judge has recommended that
the Application not be granted until further supplementary information is
provided by the Applicant to show a true financial picture of the proposed
ambulance service. However, the Judge has determined that "need" has been
established for a quicker responding ambulance service in two townships of
Morrison County where the average age of the residents is increasing and
summer recreational population create inherent risks of injuries.
PCE
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