American Medical Response (AMR), which has always professed they are the leading provider of medical transportation (they seem to forget the fire service is the largest provider of medical transport) continues to sink deeper. I reported in this column as early as last June 1, 1998 that things were starting to unravel for AMR. I then reported in the August 15, 1998 column that AMR was downsizing by an estimated 700 jobs in an attempt to eliminate $5 million a month in overhead. I also reported that Laidlaw, of which AMR is a division of, was looking at as much as $500 million in restitution to the United States government for back taxes and interest. Now, Laidlaw and the U.S. Internal Revenue Service have reached a settlement. The final settlement will cost Laidlaw a whooping $226 million!

On top of the tax news, AMR is getting a head transplant. George DeHuff, president and chief executive officer of AMR, has submitted his resignation amid what Laidlaw calls "a comprehensive, major restructuring of AMR." Taking his place until a replacement is found is John R. Grainger, Laidlaw's executive vice president and chief operating officer. Grainger has called AMR's performance "disappointing and unacceptable." He additionally said that Laidlaw is likely to sell or abandon its operations at some of its 250 locations nationwide. I previously warned in my August 15, 1998 column that fire departments where AMR is operating should draw up contigency plans in the event AMR decided to leave town. (Incidentally, Chief Rob Brown of the Castle Rock (CO) Fire & Rescue Department will be doing a presentation called "Picking Up the Pieces" at Fire-Rescue Med. The topic deals with when a private ambulance shuts its doors and leaves your community without an ambulance service).

Grainger also warned that AMR was top-heavy and a layer of managers would be eliminated. Sources tell me that quite a few of the 700 jobs previously eliminated were in the area of quality improvement - which should concern users of the service. Who knows what heads will roll in this estimated $250 million new restructuring drive at AMR? Grainger has been described as a "no-nonsense, action, fix-it guy" who will do whatever is needed to get it fixed - including terminating unprofitable contracts and eliminating unnecessary functions. Coincidentally, AMR has lost another major city 9-1-1 contract on top of recent losses in Oklahoma City, Tulsa, Birmingham, Atlantic City, and part of Las Vegas. Their latest casualty is Ft. Worth and the surrounding municipalties operating under a public utility model. Rural/Metro who won the contract and will take over August 1, 1999 promises to bring in new management, ambulances, and technology.

As a result of the underperformance and with the resignation of DeHuff, Laidlaw announced a a major restructuring of AMR. AMR will now be divided into five regions with a CEO heading each region. Trace Skeen, previous CEO of AMR Northwest and past President of the American Ambulance Association is being moved to the South region.

Investors were jolted when Laidlaw warned that its second quarter results would fall short of expectations. The company's Canadian stock nose-dived $2.10 or about 18 percent on the announcement - wiping out about $690 million of Laidlaw's market value. Laidlaw's stock has steadily declined through most of the year. Laidlaw stock hit a high in 1999 of $10.312 on January 11th. By March 2nd, the stock lost about half of its value when it closed at $5.875. About a year ago, Laidlaw stock was trading at over $16 a share.

It is clear, Laidlaw's main interest and priority in their AMR division will not be quality of care or service - but the return on the investment. What can the fire service expect in the future? Expect pullouts and more abandoning of 9-1-1 contracts. Expect more national managed care contracts like their recent one with Kaiser where fully insured patients are steered out of 9-1-1 systems into their pathway management program.

Even with AMR's latest setback still fresh, Grainger in an AMR newsletter when asked about his vision said, "The AMR team of compassionate professionals will be the leading provider of medical transportation and pathways to health care." They still forget the fire service!