Sonoma County seeks next ambulance provider, opening bids for lucrative contract

After a series of setbacks, Sonoma County has relaunched a search for its next ambulance provider, opening up bidding on what had been an exclusive and lucrative contract handling emergency medical care and transport for a large swath of the region.

The state authority that oversees emergency medical services recently signed off on the local contract requirements, allowing the county to move forward and begin accepting proposals from companies interested serving the most densely populated core of the county.

The step is a small but significant one in a long process and marks the farthest the county has come in finalizing a new deal in years.

Since 1991, the county has offered exclusive rights to an area spanning Santa Rosa, Sebastopol, Rohnert Park, Cotati and surrounding unincorporated areas, with an estimated population of at least 238,096, or nearly half the county.

The current operator is American Medical Response, or AMR, a nationwide emergency medical services company that has operated in Sonoma County for 30 years.

At least one public agency, the growing Sonoma County Fire District, is expected to compete for the new contract.

The bidding comes amid both escalating costs for ambulance operators and higher prices for patients — a trend that stands to affect rates set down in any future deal with the county.

Costs for both advanced and basic life support emergency transport have gone up in recent years. For advanced care, ground ambulance services nationwide increased 22.6% from an average of $1,042 in 2017 to $1,277 in 2020, according to a study by Fair Health, an independent nonprofit that collects data and studies insurance and health care costs.

The average charge for basic emergency ground ambulance services increased 17.5% from $800 in 2017 to $940 in 2020, the study found.

Direct cost to patients varies by insurance provider.

The market hasn’t always been kind to business. AMR’s Sonoma County operations lost $250,000 year to date, said Jason Sorrick, AMR’s public information officer.

“Over the last few years of the contract reimbursement for services has declined, while the cost of labor and fuel, our two largest expenses have drastically increased,” Sorrick said.

Sorrick said AMR expects changes made to the system under the county’s new contract framework “will make the system financially stable moving forward.”

The deal, one of the most high-value franchises overseen by the Board of Supervisors, is likely worth millions of dollars annually, though county officials could not provide a revenue estimate.

“It really is a valuable contract to get,” said Supervisor David Rabbitt.

Any winning bidder is expected to work with other agencies covering neighboring jurisdictions, according to a county staff report.

In exchange for the exclusivity, the contract holder is responsible for covering associated costs including: a one-time $200,000 administrative cost; an annual $550,000 fee to cover oversight and monitoring services; and an annual $1.7 million payment to support Redcom, the county’s emergency medical dispatch center, operated by AMR.

Public vs private tug-of-war

The county has had to extend its existing contract with AMR twice over the past few years, as the county struggled to successfully bring in proposals for a new contract. The heart of the dilemma lies in a tug-of-war between public providers such as fire agencies and private operators tussling over whether the county’s contract unfairly benefits one or the other.

Public providers, including the Sonoma County Fire District, have said the county’s past requirements and criteria for evaluating proposals favored private companies. Public entities were disadvantaged by the need to show years of years of previous service, patient treatment outcome benchmarks and insurance requirements, said Sonoma County Fire District Chief Mark Heine.

Formed in 2019 as a result of district consolidation, Sonoma County Fire District covers Bodega Bay, Guerneville, Forestville, Windsor, Bennett Valley and Rincon Valley. The district plans to bid on the contract — an option it could not previously pursue because the county’s contracting process predated the district, Heine said.

Heine is confident the district can fulfill the contract’s needs.

“We can provide a much better level of service as a public provider,” Heine said, citing the investments he said he could more easily make in personnel and equipment versus a private company driven by profit motive.

Publicly employed paramedics and emergency medical technicians generally earn higher pay and benefits than their private-sector counterparts. That payroll cost could affect rates under any newly awarded contract.

AMR has rebid on the county’s exclusive-area contract every five to 10 years as it came up for renewal, said Sorrick.

“We intend to bid and look forward to continuing to serve our community with the same high-quality care as we have for the last three decades,” Sorrick said.

He stressed the company’s history in Sonoma County.

“We know what is necessary and needed to run that system,” Sorrick said.

Prior setbacks

Sonoma County has been working on its process since 2018 when Coastal Valleys EMS Agency, a local agency overseeing the local emergency medical services system, and the county’s health services department formed a committee to gather input from stakeholders. In 2019, the county brought in a consultant to help navigate the process of requesting proposals and assist in negotiating with whoever won the contract, a staff report said.

The county encountered a setback in 2021, when the state emergency medical services agency highlighted a series of issues in the county’s approach, including lacking clarity in how proposals would be evaluated and differing requirements for public and private providers.

Another setback came in February 2022, when the county rescinded its request for proposals after prospective providers, both public and private, said the county’s requirements were unsustainable.

The county received zero proposals, Rabbitt said.

“There’s been a lot of angst with this process,” said Supervisor James Gore, board chair.

Key changes in the county’s new criteria include adding more clarity to how proposals are evaluated and adjusting historical experience requirements.

Those revisions have leveled the playing field and allowed the county to move forward, Rabbitt said.

“We wanted to make sure that everyone could be eligible,” he said. “Historically it was private ambulance services that provided this service.”

Heine sees the changes as an encouraging sign, enabling more competition from the public sector.

“I would say the entire EMS system in California is shifting away from private model to public model,” said Heine. “We can do it more effectively.”

Sorrick said AMR is keeping an eye on fairness of the process.

“We are going to withhold comment on fairness until the RFP process is completed,” Sorrick said.

You can reach Staff Writer Emma Murphy at 707-521-5228 or emma.murphy@pressdemocrat.com. On Twitter @MurphReports.