ORANGE COUNTY IN BANKRUPTCY : Reorganization of County Paramedic Service Being Urged : Privatization: The complicated system now in use makes taxpayers cover costs that could fall to insurance companies, experts say. Officials are said to be interested.

Advocates of turning some county services over to private business are looking at the Orange County Fire Department’s paramedic system as a good place to start, contending that the current setup is arcane and places an unnecessary burden on taxpayers.

Irvine-based CareLine Inc. and an independent consultant have made presentations on the issue to Assemblyman Curt Pringle (R-Garden Grove), who held a recent hearing on the issue. And the Los Angeles-based Reason Foundation is drafting a report recommending that the service be contracted out to a company that would bill users for its services and then collect insurance reimbursement.

“It’s an area that’s crying out for reform, and it’s one that we will recommend in our report next month,” said foundation President Robert W. Poole Jr., who has discussed the matter with some county officials and said they are “interested.” The libertarian think tank has been hired by the conservative Lincoln Club to draft a privatization plan for Orange County.

“The way the county has paramedic service organized now, it’s paying with tax dollars for something that could be paid entirely with user fees that could be reimbursed by insurance companies and MediCal and Medicare,” Poole said.

County officials say the issue is being analyzed.

“I don’t know how much attention this is going to get right now,” said Tom Uram, county Health Care Agency director and interim county administrative officer. “It’s one of those issues that has to be on the burner with our strike team with hundreds of others.”

Board of Supervisors Chairman Gaddi H. Vasquez said it is unlikely the idea will be considered until a planned Joint Powers Authority, which will create a new fire district and give cities and the county joint control over fire protection services, begins meeting in about three weeks.

But those in private industry who have struggled for some time to reform the county’s paramedic system say the fiscal meltdown may serve as a crucial catalyst for change.

“If there is some golden lining here in this terrible bankruptcy,” it will probably be a change in how the county handles its paramedic services, said Blake MacPherson, director of governmental affairs for CareLine Inc., Southern California’s largest ambulance company.

The county Fire Department now provides the first response to medical emergencies, sending both fire engines as well as fully equipped paramedic units into unincorporated areas as well as the 18 cities that have contracts with the department.

But county paramedics do not transport victims to hospitals, so the county cannot bill insurance companies for payment. Instead, private ambulances do the transporting. A county ordinance, however, prohibits private ambulances from providing advanced life support--or their own paramedics--so county paramedics often ride along with patients to the hospital.

Critics contend that there are too many parties involved. Because of the setup, they add, the county can’t bill for insurance reimbursement and private ambulance companies can only recover minimal reimbursements because they don’t provide paramedics.

“We’re not trying to take away their jobs as the first responder,” MacPherson said of county paramedics. “We need them there. But what we don’t need is government trying to handicap private industry.”

Battalion Chief Mark Kramer, in charge of the Fire Department’s emergency medical services, said that although he could not comment on the issue, the department is well aware of the interest.

Advocates of privatization estimate that Orange County taxpayers spend $15 million to $20 million a year on paramedic service.

Dave Shrader, a 21-year veteran of the emergency medical service industry, said he testified at Pringle’s hearing as an independent consultant. He has since been hired as vice president of American Medical Response West, a national corporation that handles paramedic contracts for a cluster of Northern California counties, as well as Santa Barbara County.

“There is nothing wrong with the level of service being provided,” he said. “The issue is: Is there a more efficient business structure that would allow for health care dollars to pay for the system rather than tax dollars? If the business is properly structured, taxpayers shouldn’t have to pay.”

The recommendations come as cities and counties across the country are increasingly looking to privatize paramedic services.

The Reason Foundation’s Poole said the county shouldn’t have a problem generating interest in finding a private contractor.

“With national companies involved (in the industry) now, Orange County would be quite a plum,” he said.