AMBULANCE CHASING

By RICHARD WOODBURY/AURORA

The 911 call in Aurora, Colorado, came from a woman threatening to asphyxiate herself with a garden hose connected to an auto exhaust pipe. Within minutes, nine paramedics and fire fighters aboard two pumper trucks, a battalion fire chief in a Ford Bronco and a pair of medics from a private ambulance company had converged on the scene to administer oxygen to the woman and transport her to a hospital. Across this Denver suburb, a variety of rescue scenes were being repeated in similar all-hands fashion. Boasts fire chief Ray Barnes: "When lives are at stake, we want the fullest emergency response possible."

Who wouldn't? The woman, who survived, was clearly desperate. And so were, in a much, much different way, her rescuers. Throughout the country, aggressive private companies are pouring money into the emergency business like water on a five alarmer. They are battling each other as well as fire departments for the nation's $7 billion ambulance business, lately rising at nearly 10% annually.

Lifesaving heroics get the headlines, but there is real money to be made, particularly in the transport of a growing legion of elderly to and from hospitals, nursing homes, HMOS and other facilities, either in ambulances or in specialized vehicles known as ambulettes. It's one of the unintended consequences--and opportunities--of health-care reform: hospitals are discharging patients earlier, while others need to be shifted more frequently between care centers, boosting the need for transportation.

From a tangle of 3,000 mostly ma-and-pa firms, three ambulance leaders, all based in the West, have emerged to seize 25% of the national market. American Medical Response has devoured 75 competitors Pac-Man style in four years, and now operates 1,760 ambulances in 28 states. MedTrans, which last year swallowed another giant, CareLine Inc., is just as large and has grown tenfold, into a $500 million operation with 12,000 employees. In fiscal 1995-96, MedTrans, a division of Canada's Laidlaw Inc., an environmental and transportation company, posted a 180% jump in profits, to $55 million. Not far behind the two is Arizona's Rural/Metro Corp., which increased revenues 46% to $250 million in fiscal 1996 over 1995; net income rose 66%, from $6.9 million to $11.5 million. Now in 150 communities the company is adding two acquisitions a month.

Applying their purchasing muscle to everything from gurneys to latex gloves, the large outfits are jolting a sleepy industry. At AMR's command center atop an Aurora high-rise, five dispatchers hunched in front of consoles track 60 ambulances with the aid of satellites. In Oregon, where the firm also has a lock on most of the nonemergency transport business, AMR last year added Kaiser's 343,000 members to its client base, reflecting that industry's consolidation too. Boasts chief operating officer George DeHuff, "Big providers can see the benefits of dealing with us."

But as the ambulance giants fight for valuable hospital and HMO contracts, they must now fend off a backdraft of sorts from public fire departments eager to protect their jobs and budgets. In most communities, fire fighters answer 911 calls. But after treating and stabilizing victims, they often hand off the transport of the injured to a private ambulance--as in Aurora--which collects the entire bill, upwards of $1,000 for a seriously injured patient.

The folks who man the hoses need other work; the number of fires across the nation has plummeted 40% since 1977. Last year medical-aid requests accounted for nearly 60% of all fire calls. "We're making the private guys look good, and then they drive up and take the patient and all the money away," complains Skip Kulikoff, fire-fighters-union president in San Bernardino, California. "It's full-scale war," agrees James Page, publisher of the Journal of Emergency Medical Services. "Fire fighters see their careers in the balance." They have won control of the ambulance trade in part of Orlando, Florida; Troy, New York; and Sacramento, Newport Beach and Ventura, California.

Increasing their market share won't necessarily give the consolidators the ability to raise prices. That's largely controlled by government agencies, or the health providers who are looking to cut costs. Thus it's possible the ambulance companies may eventually be chasing profits that aren't available to them. There could be casualties.