The Tragedy Of Our EMS System
Individual are incentivized to use the most expensive form of health care for minor issues; Saving pennies at the costs of dollars.
Frequently alternative domains provide convenient frameworks to better articulate problems in the fire service. The economic theory identified as “the tragedy of the commons” may wrap our current challenges with EMS into a tidy metaphor.
The tragedy of the commons a situation where individuals maximize personal gains by exploiting a shared resource to the point of depletion with catastrophe costs for society. Poorly structured incentives that create a “moral hazard,” an economic phenomenon described as “the Dutch disease,” and finally a point of depletion called a “tipping point” typically proceeds the tragic collapse.
The Commons — A Public Resource Available To Everyone
Imagine you’re a rancher, with a small herd of cows limited by your private pasture. Your local government allows ranchers to use a prime piece of public land for temporary grazing during emergencies such as wildland fires or massive droughts.
You notice other local ranchers start stretching the definition of “emergency” and are routinely using the public land for grazing.
A Moral Hazard — Incentivized To Do The Wrong Thing
Learning that each person can define what constitutes an emergency, local ranchers maximize their profits by increasing their herd size beyond their privately owned land. Eventually all ranchers must use the public land just to stay competitive.
The Dutch Disease — A New Resource Erodes Older, Stable Resources
Shifting most of their herds to the free public land, ranchers minimize their costs by ceasing to water their private land, leaving the grass to die. Now the ranchers rely entirely on the public land for grazing.
Tipping Point — The Catastrophic Collapse
Eventually, the grass on public land dies from overgrazing, leaving the ranchers with herds larger than their neglected private land can feed. Suddenly, the rancher’s private land also collapses from overgrazing, leaving all of the herds to starve.
The Tragedy Of The Commons
The system of public resources intended for emergencies has collapsed due to abuse and overuse, leaving the entire community in a desperate situation.
A Warning from the Past
The economist William Forester Lloyd tells the tale of “the tragedy of the commons” in 1833 as a warning to future generations. The warning states public resources pushed beyond their carrying capacity suffer the risk of failure, resulting in an exponential cost to the community.
In other words, the tragedy of the commons is the policy makers inability to recognize when a public good reaches it’s carrying capacity, resulting in a catastrophic collapse that affects the entire community.
The Tragedy Of Our EMS system
Our current EMS system, under increasing use, is starting to look like Lloyd’s “Commons” of the 1800’s, rewarding patients by dialing 911 for minor issues with no real cost to them. As call volume increases, the strain on the system pushes communities to make a massive expansion of EMS resources at the expense of other programs.
With non-critical patients accounting for 90% of all EMS, can we intervene before our EMS system hits a tipping point?
By federal law, EMS is available to everyone and must “accept, evaluate, and stabilize all who present for care, regardless of their ability to pay.” As a result, many people without traditional medical insurance are using EMS for routine medical care. The additional load on the fire departments reduces the services available to other emergencies, effectively draining all resilience from the response model; one large incident can push a local EMS system into complete failure.
Moral Hazard — For The User And The Fire Departments
Moral Hazard is “a situation where there is a tendency to take undue risks because the costs are not borne by the party taking the risk.” Many of the users of EMS face little risk of an adverse outcome, such as massive ambulance bills for using EMS for minor medical conditions.
Using The Most Expensive Option For Medical Care With No Direct Costs
Some patients are encouraged to use the EMS system because there is no direct cost to them. Ultimately, the community bears the additional cost while the user enjoys a sudden enrichment of accessible and advanced medical care.
You Call, We Haul, That’s all
Along with the patients, the fire service is struggling with a moral hazard unto itself. To protect communities, many fire departments entered the ambulance transportation business, hiring additional firefighters and investing in huge capital assets. The revenue from ambulance billing is typically intended to cover the cost of employees and equipment, making the medical transport business a required enterprise. But many fire departments are facing a transactional problem where their costs for staff and assets are increasing while their average collection per transport is falling.
Suddenly, fire departments become trapped into focusing on revenue over community health. Just like the patients, fire departments find themselves in a moral hazard, transporting as many patients as possible regardless of medical need, hoping to close the gap between rising costs and falling revenue.
The Dutch Disease — EMS erodes other forms of medical care
In 1977, an article in The Economist coined the term “Dutch Disease” to describe a form of sudden enrichment that reshapes the economy, eroding some sectors and pushing other sectors to the point of collapse. The “Dutch Disease” may help describe the evolution of our health care system as people are suddenly enriched by low-cost access to an advanced EMS system, while simultaneously eroding more traditional means of healthcare such as family doctors.
Solutions Are Out There, But It May Take A Bit Of Trial And Error
Our EMS system, consisting of fire departments, ambulance companies, hospitals, insurance providers, litigators, and government regulations creates a complex, adaptive system, or a CAS. CAS’s are incredibly hard to analyze, manage, or predict, and can suddenly collapse once they exceed their carrying capacity, like the common grazing pasture in Lloyds parable.
David Snowden,, the creator of the Cynefin framework and a leading figure in complexity theory, suggests that when faced with shaping a CAS, one employs a process of “probe, sense, and respond,” by using a group of safe-to-fail experiments in the system. After the implementation of new programs, administrators dampen or amplify activity based on outcome. In other words, try something new and do more of what works and less of what doesn’t.
When dealing with a CAS, traditional bureaucratic planning and structured implementation rarely create the desired outcome and frequently make the problem worse. The solutions to our EMS problem will be found locally, in a small experiment that produces positive results implemented by bold leaders who care about their community.
Our EMS system is under massive pressure due to a mix of moral hazard and a form of the Dutch Disease. We have built a system that motivates users to seek emergency services for minor issues, with high costs borne by the community instead of the user. The dominance of emergency services erodes traditional forms of health care, potentially leaving a community with no options for health care if EMS collapses. The complexity of our EMS creates a Complex adaptive system, requiring a bit of trial and error to combat the age-old problem of ignorance and indifference before a small crisis turns into a Catastrophe. The fire department didn’t create the problem, but we should be a part of the solution, for the sake of the citizens we took an oath to protect.