Ambulance NB paid millions to hit targets biased against rural areas, auditor finds
Medavie's contract with government distorts wait times, Auditor-General Kim Adair-MacPherson contends
Ambulance New Brunswick has been paid millions of dollars for hitting performance targets that are biased against rural areas and that conceal lower response times to those remote communities, according to New Brunswick's auditor general.
Kim Adair-MacPherson says in a scathing audit that the existing system for measuring ambulance response times has concealed problems that, in some cases, would have seen ANB miss out on performance payments.
The system creates "a bias toward achieving high performance in areas of greater population density, to the detriment of rural or remote communities where 911 calls occur less frequently," she writes in her report released Tuesday morning.
Medavie Health Services New Brunswick Inc., a private company Adair-MacPherson refers to as MHSNB, runs the ambulance service under a contract with EM/ANB Inc., a provincial Crown corporation.
The company gets extra payments if it responds to 90 per cent of calls within nine minutes in urban areas and within 22 minutes in rural areas.
But Adair-MacPherson's audit found 19 of 67 remote, rural communities saw response times far below the 90 per cent threshold.
The lowest was Belledune, with 69 per cent. Another example was Port Elgin with 79 per cent.
But because the response rates in those communities were blended with urban response rates in the same areas, the Medavie service can perform well in larger centres, hit its overall 90 per cent target and still receive bonus payments.
"It's almost like the true results are being masked by the way the four zones calculate the performance measures," Adair-MacPherson said at a news conference.
The arrangement "put rural and remote communities at a disadvantage by reducing the emphasis on achieving performance expectations in these areas," the audit says.
"In this way, MHSNB is given the opportunity to focus resources on urban areas while having decreased performance in outlying communities and without impacting its performance-based payments," it says of the Medavie operation.
Adair-MacPherson says MHSNB was living up to the terms of the 10-year contract and stopped short of recommending the province try to renegotiate it before it expires in 2027.
But she added: "It will be unfortunate and impact the service quality if that doesn't happen until the expiry of this current contract."
Health Minister Dorothy Shephard said she had spoken to Medavie CEO Bernard Lord, a former Progressive Conservative premier, and did not rule out reopening the contract.
We'll be discussing the terms of the contract and how we can make things better.- Dorothy Shephard, minister of health
"I was comfortable with his response that we would be having meaningful discussions and action on accountability and transparency," she said.
"Talking about the contract is not something that he's not willing to do. So we'll be discussing the terms of the contract and how we can make things better."
In a written statement, MHSNB president Richard Losier said the organization "is always looking for ways to improve the service we provide New Brunswickers.
"The Auditor General's report provides another opportunity for discussion on change, and we look to that opportunity to continue our discussions with our government partners to provide better service."
His statement pointed out the zoned system for measuring response times and said the ambulance service "has met and exceeded the standard as set out in the contract" since it was first signed in 2007.
MSHNB gets an additional $650,000 per year if it hits the response rate targets 90 per cent of the time. The amount increases if the response rate is better, up to 92 per cent.
'Excessive' use of exemptions
Adair-MacPherson also says the ambulance response rates have been distorted by the "excessive" use of exemptions, which are supposed to be used for circumstances "beyond the control" of the ambulance service.
By using the exemptions, Medavie can say a particular slow response time doesn't count against its 90 per cent success rate. Any exemptions have to be approved by the Health Department.
The report says 5,500 such exemptions were approved in the two years audited, from April 2017 to March 2019.
The level of exemptions improved the response rate from below 90 per cent to above 92 per cent, allowing the company to collect its full performance payment in both years.
Adair-MacPherson says one type of exemption, a "full deployment exemption," has become routine in Saint John, Moncton and Fredericton and should be curtailed.
A full deployment exemption can be used when the number of ambulances available falls below what's needed to respond to emergency calls.
The report says falling below that threshold happens frequently enough in the three cities that it has become predictable.
That means it can be addressed with better planning by the ambulance company "and, therefore, cannot be considered beyond its control."
People's Alliance Leader Kris Austin, who first alleged that the performance numbers were skewed three years ago, said the report was validation of his criticism and local communities should be given a role in overseeing the service.
Liberal MLA Rob McKee said he was glad the government will try to change the contract and Medavie should agree to that.
"They should review that, and I hope they will sit down with the department."
Green Party Leader David Coon said ambulance services should be put back under the the two regional health authorities.
Incentive to maintain low staffing
Adair-MacPherson identifies another issue with the ambulance service: she says the contract allows Medavie to make more money when paramedic positions are left vacant — a frequent and high-profile issue in recent years.
The Department of Health funds EM/ANB, the Crown corporation, but it's the private Medavie company that manages the money and the ambulance system. If it achieves a surplus in a given year, MHSNB keeps 50 per cent of it.
The audit says year after year, payroll costs were "over-budgeted," calculated based on a full workforce of paramedics with no vacancies. Given chronic vacancies — 96 positions were not filled in 2019 — "it was unlikely this method accurately predicted labour costs."
The vacancies made it easier for the ambulance company to achieve surpluses that it was entitled to keep. Over 10 years, the company pocketed $8.8 million out of surpluses related directly to vacancies.
"In our view, calculating labour cost based on full utilization of ambulances within the budget provided the means for inappropriately paying MHSNB," Adair-MacPherson says.
"This provided an incentive to MHSNB to overestimate the paramedic requirement or maintain low staffing levels while still meeting performance obligations."
Losier's statement described the company's efforts to recruit more paramedics and said shortages of health-care workers are common across the country, but did not respond directly to whether the company made more profit as a result of vacancies.
Problems with governance structure
The audit also faults the governance structure in place for the ambulance service. The EM/ANB Crown corporation's board is made up of officials from the Department of Health and the two regional health authorities.
That means some board members report to other board members in their regular civil service roles, Adair-MacPherson says.
"Under this arrangement, it may have been difficult for individual board members to question or challenge other members of the board."
Losier's written statement pointed out that Ambulance New Brunswick was awarded "exemplary" status earlier this year by Accreditation Canada, an independent rating organization in the health care field.
But Adair-MacPherson said in her audit that Accreditation Canada's assessment "did not appear" to consider the issues with the governance structure of EM/ANB, Medavie and the province, so she did not "place reliance" on it.