Have Clipboard, Will Travel

Faced with diminishing Medicare reimbursements, this Minnesota ambulance fleet turned to an age-old method of keeping their revenues up: hiring out its expertise.


To most residents of St. Paul, MN, the name HealthEast is the brand name for a system of area hospitals and clinics; in other words, it's a name you think of when you're not feeling right and you need medical care.

More and more St. Paul residents, however, also think of HealthEast when their cars and trucks aren't feeling right and need repair. For the past few years, the healthcare company has been marketing its vehicle maintenance services on the retail market, and it's been a win-win situation for the company and the community.

It may seem at first like an odd fit—after all, what do technicians who are used to maintaining rescue vehicles know about passenger cars or pickup trucks? But then, if your car needed repair, why wouldn't you want it to be fixed by people whose work absolutely cannot fail, because lives depend on it?

THE CORVETTE IN THE CORNER

As you drive along Front Street in St. Paul, there is no outward sign that the low brick building you're approaching is a retail garage. There's no signage anywhere, and the vast majority of the vehicles in the parking lot are from HeathEast's 50-unit fleet of ambulances and transit vans. Even a walk through the four-bay service area reveals only HealthEast rescue vehicles in for maintenance or repair.

It's not until you arrive in the body shop and see the early-70's vintage Corvette being prepped for a paint job that you realize something unique is going on here.

"Rick in the body shop has had to take what you saw: focus on a Corvette and try to make that look beautiful; and tomorrow he's working on an ambulance; and by Thursday we'll have a new bus delivered, and he will have to strip that down," says Nick Greco, accounts manager for HealthEast Transportation. "That's not uncommon for him, and he doesn't miss a beat. He just says, 'Okay, bring it in.'"

As the accounts manager, Greco is responsible for marketing HealthEast's vehicle maintenance services to the public and to other fleets. He admits that explaining what goes on in the Front Street shops can be a challenge. "When people hear the name HealthEast Care System, it doesn't equate to HealthEast vehicle services," he says. "The trade shows are where we typically get the most questions, because they walk by and see our name HealthEast' They say, 'HealthEast, what are you doing here?'"

SHRINKING DOLLARS

What is HealthEast doing here?

To find the answer to that question, you have go back eight years, to a time when the U.S. Medicare program began to hold back reimbursement money for many healthcare services. Healthcare costs were rising, and Medicare needed to find ways to save money.

"Looking forward, a number of things were going to happen: our reimbursements are going to decrease; our volumes will continue to increase," explains senior director Brad Anderson. "We took a look at a couple of options. One was to downsize the fleet and reduce the staff; the other was to diversify the risk.

"We looked at each of our support services for our ambulance division and said that these are centers of excellence," he continues. "So, if we are doing a good job managing our fleet and we have resources available—since the maintenance facility is there 24/7—it's a question of staffing, so why not start looking at that as a retail potential to try to offset some of the costs and some of the declining reimbursements?"

The fleet's existing resources included a body shop, a shop for outfitting transit vans and ambulances, and of course the main maintenance shop. The staff developed a business plan stating that each of those divisions would become budget-neutral, so that they would no longer be cost centers, and they could possibly generate revenue.

The reasons for HealthEast to sell maintenance services go beyond financial considerations, however. According to Anderson, there is also a humanitarian side to the issue:

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