The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

Public Accounts -- Wed., Apr. 26, 2000

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8:00 A.M.


Mr. John Holm

MR. CHAIRMAN (Mr. David Morse): The clock tells us it is 8:01 a.m., and it is time to start. Perhaps for the benefit of everybody that has not met before, we all could go through and introduce ourselves. I am going to start with myself. I will be sitting in for our regular Chairman. I am the Vice-Chairman, my name is David Morse.

[Members introduced themselves.]

MR. CHAIRMAN: Our guest witnesses today are Mike Murphy, Executive Director of EHS; Arnold Rovers, CEO of EMC. Just coming in is Russell MacKinnon, and we would not want to miss Russell. In the back, we have Roy Salmon, the Auditor General and; David Perry, Auditor General's office.

The topic today is Emergency Medical Care, the ground ambulance service is the topic. Perhaps I would invite Dr. Murphy to make an opening statement, if he so chooses.

DR. MICHAEL MURPHY: Mr. Chairman, what I have done is prepared a brief discussion surrounding the contract for ground ambulance service. When I was initially contacted on behalf of the committee, my understanding was that members of the committee wished to have a discussion of some elements of the contract, to perhaps understand them. I have been accused in the past of being highly technical and perhaps losing the audience in the discussion, because the topic is highly technical. I would urge you to please stop me at any time and ask me questions, because I think what this may do is spur some of the queries you have surrounding the contractual relationship between the Crown and Emergency Medical Care.


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Just as an aside, one of the places that people often get lost is in the discussion of terms, Emergency Medical Care, Emergency Medical Services, Emergency Health Services. I know our own minister threw his hands up in exasperation in not understanding what the various terms are. (Interruptions)

MR. CHAIRMAN: Thank you, Dr. Smith, for reprimanding yourself, and appropriately so, perhaps. (Interruptions) Back to Dr. Murphy.

DR. MURPHY: What we prepared in November of last year was a lexicon of terms that I can leave with the committee so that they can understand some of the terminology. Mora, perhaps I can pass it to you at some point in time. If you would like that reproduced, we can send it around.

Let me first say that in your discussion document that I have placed in front of you, there are a series of key issues that I would like to just touch on. Public policy around EMS, as I mentioned, is highly complex, and there are at least 15 different components of an EMS system that must integrate to provide public safety and quality of care. The fundamental aspect of any EMS system is readiness and public safety, in terms of your key thoughts. However, in designing a system, there are key public policy decisions that a government has to make. One of them is the allocation of market rights, and I will talk about that briefly. Another one is competition, and competition within Emergency Medical Services, EMS.

I want to talk a bit about public protection and the fail-safe nature of the system that we have here in Nova Scotia. Then I want to briefly touch on performance measures and the alignment of incentives between what government expects and the private sector expects in terms of their incentive. Then, at the very end, I would like to touch on key contractual issues, and I suspect that is where we will spend most of our time.

If I could just get you to turn to the page on market rights. In terms of a definition, provider mix, there are a variety of system designs across North America. Most typically systems are in the private sector, a private sector provider of ambulance services is contracted by a public authority to deliver service. But sometimes it is provided by a public sector agency such as police or fire or, in some instances, such as in the City of Toronto, it is in fact a third service, not police, not fire, but a third service. Of course, there are a variety of mixes. In Nova Scotia, what we have elected to do is, and historically this was the fact, we elected to retain ambulance services in the private sector. The reason for that is that if you looked at system efficiency and cost effectiveness in systems across North America, the highest performance at the least cost is in private sector with public sector authorities overseeing them. That is why we elected to leave it there.

The next thing you have to do is determine market boundaries. The economies of scale play into the size of the market. In Nova Scotia, we initially looked at whether or not we would have community-wide services, which were down to something in the vicinity of

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15 to 25 as opposed to the 52 services that were in the place, whether or not we would go with 4, coinciding with the 4 health regions, but ultimately, the economies of scale and the way that the business actually operated in moving patients around the system dictated that we should go to virtually a single market for the entire province. There are currently two exceptions to that, one of them is Pubnico and the other one is a volunteer ambulance service in Louisbourg.

The next thing that we had to come to terms with is, how do you allocate market rights? If you are going to deal with a private sector provider, how will you choose that private sector provider? Most systems in Canada are laissez-faire, it has been this way for 20 years and we have kept it that way. The provider of service has always been there, and it has been a laissez-faire allocation of market rights, or, actually, typically an inherited geographic monopoly.

The next way that you can actually allocate rights is to go out and select what you view to be a series of competent providers of the service and negotiate with those competent providers to deliver that service. That is the way we elected to go in Nova Scotia.

The final way, which is probably the acid test, is to go to a competitive bid. The difficulty in going to a competitive bid for anything, whether it is widgets or ambulance service, is that you have to have a very detailed understanding of what you want from a provider, so that they can cost out the various components of the service, what level of sophistication do you want your providers to have, but more importantly, what precise response time do you expect of your ambulances in various areas of the province, what has been the historical norm. When we began this five years ago, we didn't have any of that information. In fact, we probably won't have detailed information to allow a competent provider to bid on a document that we would put out for the next couple of years.

Going to competitive bid was not in the best interest of the province, and what we elected to do was identify a series of competent providers and negotiate a contract with them. That is where that came from.

MR. CHAIRMAN: Moving on in your presentation?

DR. MURPHY: Yes. I am just stopping, because I am trying to make sure it is straight-forward and understandable.

MR. CHAIRMAN: You are very thorough.

DR. MURPHY: Thank you. I don't want to take too much time.

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The competition in EMS is important to understand. The first is, the customer is the buyer. Oftentimes, in fact, the customer or the patient is not the buyer. The person who has actually requested the service might be a loved one, it might be a neighbour, it might be the police. Oftentimes with the air ambulance, for instance, the requester of the service is not the patient, it is the physician who wishes to send the patient from institution to institution. To then turn around and send a bill to a patient that didn't request the service in the first place, you can understand some of the angst or difficulty that EMS is faced with and why collection rates tend to be fairly low.

The other problem is that while you as a buyer can understand the difference between a Wendy's hamburger and a McDonald's hamburger, you have the time to shop, you have the wherewithal in your palate to discern what your taste is and what you wish and you can understand the parameters of quality, in terms of purchasing health care services - and you read in The Globe and Mail yesterday - typically purchasers of health care services are not very sophisticated in terms of what they expect. In EMS, they expect two things: they expect empathy and compassion, and they expect timeliness of response. So they measure quality on surrogates of what they think quality ought to represent. In fact, we know that while timeliness of service is important, the quality of care really is one to be determined by a higher medical authority, and we interpret the quality of care based on the paramedics' application of protocols that we have developed over time, in terms of provision of care.

I am an anaesthesiologist, I can probably give you a better idea of quality of one anaesthesiologist compared to another than you can discern on your own. In fact, that is why people call me before they go for their operation; they call and say, I have so-and-so doing my anaesthetic, do I need to worry? They use my ability to judge quality, not only their own.

The other distortion of the market, in terms of the buyer, is that the buyer really has no ability to know where the most efficient or quickest response will come from, because they don't know which ambulance service or which location will provide the ambulance closest to them. That is the job of the public, that is the job of government, to ensure that there is a fair and equitable distribution of resources, to ensure that you get the quickest response possible. Even those things that the public expects to be able to judge the service on, they don't have the ability to select, appropriately, the provider of service.

We talk about two forms of competition in emergency medical services. One is competition within the market. So a variety of ambulance services might post their advertisements in the newspaper, and you would go to ABC Ambulance Service, unless of course Aardvark Ambulance Service happened to be in the paper before them. You picked them, they were first in line, or a relative had used Aardvark Ambulance Service and liked it for whatever reason. Competition within the market with a buyer that is not qualified to make the decision often doesn't allow the customer to get the best service available. In terms of public safety, government steps in and says, we will only permit qualified providers of service to enter into the market. We do not allow competition within the market.

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The other thing that competition within the market opens you for is cream-skimming, so that you have one person able to come in and do all of the highly lucrative contracts while leaving the public provider holding the bag for providing public safety and paying a very high cost per unit of service. What we elect to do, typically in EMS, if we do go to competition is we allow competition for the market. The role of the public entity, the authority of government is to define the performance parameters and to level the playing field on which that bid will occur. Typically what you do is define your bid variables very narrowly, response time reliability and quality of care are the two big ones. You then allow the bidder to bid the lowest cost. The bid variable open for bid is typically cost; so competition within the market, competition for the market.

If I might now just flip to public protection and the fail-safe design. As I mentioned before, the role of government is to ensure that if you request a service, the service arrives and that it arrives in a timely fashion, according to a certain standard; that the performance of the paramedics who arrive on your doorstep reflects the fact that they have been credentialed and accredited to be able to provide that level of service, and that the quality of service that they are providing is overseen and delivered in a competent fashion. If you look at what EHS does, EHS sets the standards and monitors the performance of the contractor against those standards.

You must always, as a citizen, understand that fire protection, police protection, and hopefully ambulance protection, as the big three public safety agencies, are always there. The role of government is to ensure that the system is designed in such a way that it can never be removed. In years gone by, ambulance services were privately owned, the telephone numbers were privately owned, the ambulances were owned by the providers themselves, and should that provider elect to leave the business or be put out of business or go out of business for whatever reason, then the assets typically went to the bank, and they weren't left for the protection of the public.

In terms of the design of the system, any factor of production, anything that can be reasonably anticipated to be relied upon by the system to deliver care, whether it is employment contracts or ownership in ambulances or bases or telephone numbers or medical equipment, then the public authority must either own it or have instantaneous unimpeded access to it should the contractor fail to be able to provide the service, for whatever reason. You may put that contractor out of business for failure to perform, or that contractor may say I don't want to work with you anymore, I don't like working with this government, I am leaving. We have to make sure that the public is protected.

Right now, in this age, information and data are things that the public must own. You must know what the response time is, you must know what the deployment of ambulances is. You have to have a great deal of certainty that the information in the system is kept for the public good, not a proprietary interest of the contractor. Now there are proprietary interests of the contractor that the contractor must keep sacred and hold dear to them in order to

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maintain their commercial edge. I understand that, but at the end of the day, all of the data collected by the system must be the system's.

The next thing is visual identity. If the people of the province identify a single name-brand delivery agent of service, it must be the public, it must be Emergency Health Services. It cannot be a private sector provider of the service. In their own mind, they must never fear that the financial dissolution of that agent will mean that they lose their service. They must never be under threat of loss of service. What that does to government is put government over the barrel in terms of justifying to the people of the province that they have in fact delivered a fail-safe design. Finally, as I mentioned earlier, I am not going to reiterate, data and information must be in the ownership of the public entity.

Now just quickly, performance measures and alignment of incentives. We have a performance contract for many of the contracts we have at EHS, but fundamentally, the contract for ground ambulance service is a performance-based contract, it is not level of effort contract. It doesn't matter how well intentioned or much level of effort is put into the contract, if the performance measures aren't met, then there is a failure of the provider to meet the performance measures of the contract. There are penalties in the contract associated with that. If they exceed those performance measures, there are rewards. It is kind of a carrot-and-stick, a Judea-Christian view of life.

Response time, reliability, and compliance of medical protocols, very clearly are fundamentally the two performance measures that we measure the performance of the provider against. We have also attempted to align the incentives of government, which is high-quality medical care and response time reliability with that of the contractor, because if they succeed in providing a higher quality of response time that they are required to do by contract, or they exceed the medical standards required in the contract and are clearly defined, then they have the opportunity to extend the life of the contract. It is called an earned extension. We tried to take the two incentives and align them. We think we have been successful in that based on the models of other places in North America that have used similar systems.

Finally, some key features of the contract. Mr. Chairman, what I might do is just hesitate after I mention each one of these, because these are key features. The first one is the primacy of medical authority. At the end of the day, the most important issue in Emergency Medical Services is the ability to deliver high quality medical care. We have an extensive and intensive medical oversight that reviews all of the high-risk calls that are done by Emergency Medical Care paramedics and the other contractors in the system, such as Pubnico and Louisbourg. Those high risk are any paediatric patient, any patient where an advanced life support procedure is performed, any time there is a refusal of care, any time the ambulance responds and no patient is brought into the hospital; 100 per cent of those are reviewed, 10 per cent of all other calls are reviewed, to ascertain if there is compliance with medical protocol.

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The medical director has a fairly independent position in terms of deciding what the quality of care will be, which you would expect the medical director to have in the system that you fund. You would expect that the highest standards that we could afford are in the contract, and the contractor is held to those standards. The living document, the living proof of that is the medical protocols, which is a standard province-wide document. We are the only province in the nation that has a single provincial standard. Any questions about that? Good.

Ownership. We identify all of the assets and all of the information required for the delivery of the service now and in perpetuity. If there is an asset, be it a building, an ambulance, a piece of medical equipment, or an employment contract, we are privy to that. If there is a piece of information that comes into our computerized dispatch system, it is collected by the medical director or becomes a product of the relationship between us and EMC, then government is privy to that. It doesn't mean that it is freely available to the public, but we are privy to it because we have to understand the nature of the business to ensure that the provision of care is there, and so that we have a fail-safe design.

There are clear performance measures within the contract. I have circulated some information to members of the committee with respect to a recent survey done by the National Association of Public Utility Models, which we have recently been nominated to membership and accepted membership. We are the only Canadian organization in that elite organization, which is a collection of all the high performance systems in North America. In that, there are excerpts from the contract that describe how response time reliability and the progression to advanced life support capability is laid out. Compliance to medical protocol is the medical quality assurance aspect of the business. That goes on on a regular basis.

The contract is a base price for full service contract. We pay a base price to Emergency Medical Care, Pubnico and Louisbourg for them to provide all of the service in their area. They provide the advanced life support ambulance, the basic life support ambulance, the emergency response, the booked transfers, the non-booked transfers, if it goes horizontally, then it is paid for by the province up front. It is a full cost for base service, there is no fee for service incentive or disincentive to overserve or underserve.

You have to understand the difference between cost and price. When we take the amount of money we send to ambulance contractors and add to that an allocated cost of what the bureaucracy assigns to the ground ambulance transport, that is the cost of providing a service. The price is the service that we bill to users of the service, a user fee. We bill a user fee to the citizens of Nova Scotia, consistent with other provinces. Our proposal this year is that it be re-pegged at 20 per cent - it is now 8 per cent or 9 per cent - that it be pegged at 20 per cent, which is consistent with the national accepted user fee rate. That is the price. We have paid for the service up front, we recover a portion of that through user fee, that is a recovery.

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There is a subsidy, a trade-off between price and subsidy. Because EMC is required to respond to every single call for service, no matter where it is in the province, they must respond irrespective of ability to pay, that is fundamentally why subsidy is larger than price. We cannot discriminate against the user of the service in the province as a resident of Nova Scotia because the price is too high. That is our belief. We bill the full cost of ambulance service to non-Nova Scotians. We think that is reasonable. If you come here from Ontario and you get an ambulance, then you are billed the full cost, what it costs us as a province to provide that service. That is the same thing that Ontario does to us when we go to Ontario. That is the same thing that B.C. does to us when we go to B.C.

Finally, we bill cost plus a 50 per cent premium to non-Canadians. The reason for that is that the non-Canadian rate includes an allocation of cost for assets that we don't include in the cost base charged to other Canadians. In addition to that, there is a non-collectibility rate. What we are doing is recovering the cost of service to non-Canadians based on their payment, and the fact that we have underwritten the assets in the system. That is a nationwide convention in terms of health care service provision.

Within the contract, there are stop-losses and flow-throughs. The contractor must be confident that the contract protects them from forces beyond their control. Fuel price is a good example. Should fuel prices rise, through no fault of their own, then there must be an allocation to flow-through that to the contract, to the provider of service, the provider of payment. That doesn't mean that poor purchasing practices or poor performance leading to higher insurance premiums are passed on to the public. The contract allows that that not occur. The public authority, being EHS and the Department of Health, be in a position to judge that and decide that.

There are clear contract termination and end-of-term provisions. It is well known in EMS and other public safety agencies that the biggest risk to the public occurs at the end of a contract. When the contractor is aware that he or she is no longer going to be awarded the follow-up contract, there is the incentive to be in profit taking. It is called the lame-duck period; an obsequious and unapproved scaling back of operations. So the contract recognizes that up front and deals with those things. Not that we would ever have expected that of contractors in Nova Scotia, mind you.

Mr. Chairman, I think I have taken more time than I need, and I will stop there.

MR. CHAIRMAN: That was certainly a thorough overview. I wonder if Mr. Rovers has any opening statements he would like to make to the committee.

MR. ARNOLD ROVERS: Mr. Chairman, a very brief one. Just a basic summary of who EMC is, and that is all I would have a comment on. EMC is a subsidiary company of Maritime Medical Care. Maritime Medical Care is a Nova Scotia company and has been a non-profit society for the last 50 years. Maritime Medical Care is a company that provides

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and has supported medical support services for Nova Scotia for that period of time and has recently, actually, joined forces with Blue Cross Atlantic, which is also a Nova Scotia company but headquartered in New Brunswick as Blue Cross Care, providing for a single administrative structure of two separate organizational structures. Because both by-laws, both organizations are very similar, they have joined forces to provide some synergies in the business they are in.

From Emergency Medical Care's perspective, our sole objective and our sole purpose is to manage for the Department of Health, under contractual relationships that Dr. Murphy has described, the contract to provide pre-hospital emergency health services or the ambulance service in Nova Scotia. We are a signer of the contract that provides that relationship Dr. Murphy has outlined, and that is our sole purpose as EMC. I will be happy to respond to some questions through the course of events.

MR. CHAIRMAN: Thank you, Mr. Rovers. The time is 8:28 a.m. Protocol has it that we alternate between the NDP and the Liberals. Memory serves us that it would be the NDP, and I see Mr. Dexter is ready, so I recognize Mr. Dexter for 20 minutes.

MR. DARRELL DEXTER: Mr. Chairman, I have a series of questions I want to ask with respect to the contract and with respect to specifically user fees and the way in which they are charged. You just indicated to us that the aim for this year was to peg the recovery at 20 per cent of the actual cost of service, as I understood it. Perhaps you could help us understand exactly how that operates in the contract? I know the Auditor General last week was telling us that there is an agreement or a contractual term whereby EMC, as part of that user fee, gets to keep I think it was 25 per cent of the user fee that it recovers. Perhaps you could explain that?

DR. MURPHY: The terms are 20 per cent. The user fee typically in most health-related activities across this nation, in those things that are permitted by the Canada Health Act, would be about 20 per cent is my understanding nationwide. So, that is where the 20 per cent number comes from. In fact, in 1992, the last time the ambulance subsidy agreement was negotiated, it was anticipated that the user fee was about 20 per cent of the total cost to the system at that time. That was pretty accurate, in fact, it was a guess, but it was accurate. As the cost to the system has escalated 2.3 times over the last five or six years as we have upgraded the system, then that sunk from about 20 per cent down to about 8 or 9 per cent. What we are looking to do is readjust that back up to the 20 per cent figure.

Now, in terms of the contract, government makes policy with respect to user fees. All policy setting is within the purview of government. They make the decisions. What EMC then does as a contractor of government is to act out that decision. They do the billing as per policy. They are neither permitted to waver from it, nor are they permitted to alter it. So they are simply an agent of government doing the billing and collections on behalf of, as a recovery, the Department of Health.

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[8:30 a.m.]

Within the contract, it stipulates that no matter what EMC collects, 75 per cent of the billings they actually bill, they must remit to government. If they collect 60 per cent, they remit 75 per cent of the total, so there is a potential for loss there. The 75 per cent number was arrived at as we did a financial analysis in a coalescence of the other operators in the system. That was generally agreed to as the number that could be expected. In addition to that, there is an incentive for EMC to collect more than that. If they collect more than that, for each dollar they collect above the 75 per cent number, they keep half and 50 per cent is remitted to government.

MR. DEXTER: So if you achieved 100 per cent recovery, which I understand you don't, then you would keep 12.5 per cent of the total cost of billings.

DR. MURPHY: Correct.

MR. DEXTER: As I understand it, EMC receives a management fee, somewhere in the vicinity of $975,000 or thereabouts. Is that correct?

DR. MURPHY: I am not prepared to address the numbers.

MR. CHAIRMAN: I am wondering if perhaps Mr. Rovers would like to answer that question.

MR. ROVERS: To me, the financial management of the company should be part of the operations of the company. What the Department of Health pays EMC is part of the public record. What we do with that, I think, is part of our business practices in terms of the intellectual property that the company has.

MR. DEXTER: But you get paid a management fee. It is in the contract, and I am just asking you . . .

MR. ROVERS: Sure, $975,000, which is in the contract, is the management fee.

MR. DEXTER: So, anything you recover over and above 75 per cent is an additional revenue to EMC.

MR. ROVERS: Anything we don't recover under 75 per cent is a loss to EMC; 50 per cent of what we recover above that is a gain.

MR. DEXTER: The government in its most recent budget documents, the budget bulletin I have in terms of cost recovery measures, says under fees increased, ambulance users, and it has a figure of $5 million that they intend to recover. I wasn't sure whether or

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not that was the increase that they intended to recover or the total amount of the recovery from ambulance user fees.

DR. MURPHY: It is the former, which is the increase.

MR. DEXTER: What is the actual amount that Nova Scotians will pay in user fees for their ambulance service?

DR. MURPHY: Let me tell you what we anticipate will be billed, that might be the best place to start. We anticipate that there will be $11.5 million billed in user fees to Nova Scotian residents; to third-party insurers such as WCB, DVA and motor vehicle insurance companies for accidents; and to non-Canadians, non-residents. That is $11.5 million billed. This year we will have billed - and the final number is not in yet - about $5.5 million.

MR. DEXTER: Do you know what amount of it is non-Nova Scotians that are billed.

DR. MURPHY: Breaking it down by our projections, we anticipate that the total user fee amount billed to Nova Scotians will be in the vicinity of $4.1 million; to third-party payers and other Canadians about $6.3 million; and to non-Canadians, non-residents about $1.1 million of the $11.5 million total.

MR. DEXTER: How much was billed this year?

DR. MURPHY: The projection is $5.5 million.

MR. DEXTER: That is for all of those categories?

DR. MURPHY: Correct. I don't have a breakdown for that $5.5 million. I can get it, but I don't have it here with me.

MR. DEXTER: So there is a $6 million increase of which the government will recover $5 million?

DR. MURPHY: The number is $4.735 million and it is rounded off to $5 million. That is where the $5 million came from. I was unclear as to what the budget bullet number was. That is where the $5 million came from.

MR. DEXTER: That is what you say the actual number will be?

DR. MURPHY: That is the projection of what the increased collection will be.

MR. DEXTER: So what percentage of the billing will that be?

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DR. MURPHY: That is the 75 per cent figure because that is the number we have to work with. If that number is the amount billed, if we are correct in suggesting that $11.5 million will be billed, then 75 per cent of that, which is the number that we can rely on, is $8.6 million.

MR. DEXTER: So the increased number that appears here is a projection of 75 per cent of the actual amount billed?

DR. MURPHY: Correct.

MR. DEXTER: When I was asking the Minister of Health about this in estimates, he was saying, as I understood it, that this represented the total amount billed, but that is not the case. This would be the government's share which is the 75 per cent that you guarantee to the government?

DR. MURPHY: Correct.

MR. DEXTER: I know you are saying that there is a risk involved here and I appreciate that, but if you recover more than that, then that will go to EMC, or at least half of it will go to EMC?

DR. MURPHY: Half of that will, correct.

MR. DEXTER: I think I understand that now. I am not sure if you could indicate to us, based on past performance, what it is that you have actually recovered, what percentage do you actually recover?

DR. MURPHY: I don't believe that is in the interest of the government at this point in time, nor do I believe that that is in the interest of the contract provider, but I might be corrected. I cannot speak for Mr. Rovers, but I don't think it is in the interest of either one of us.

MR. CHAIRMAN: I guess, as the chairman, I would have to disagree. If those are public monies that were expended, witnesses are expected to answer the question if you can.

DR. MURPHY: Let me tell you why I disagree. First of all, we have contracted with a service provider who has certain commercial advantages in terms of the way they do business and we think that we have contracted with a company with a great degree of expertise in managing dollars, managing finance and managing user fees. That is a substantial part of their commercial advantage in getting and keeping this contract, so if in the future we go to a bid - and it would be anticipated that in the model we are using now that that bid would require the bidder to come to the table with a guarantee in terms of dollar amounts to return to the province and with respect to user fees collected - we will use that as a substantial

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point in terms of the bid document in deciding which company we will select and which companies we will not.

In terms of the answer to that question, I believe that that confers an unfair advantage in the commercial environment, Mr. Chairman, as we move down the road should we go to bid with other companies with respect to EMC. I believe that that confers an unfair commercial advantage in a commercial world. I understand your comment, but I will tell you where I come from with that.

MR. CHAIRMAN: What I think I am going to do is I am going to ask the member from the NDP, Mr. Dexter, whether he wants to pursue that line of questioning.

MR. DEXTER: Ultimately the payer here is the Province of Nova Scotia and it is Nova Scotians who are going to pay these fees. It is a publicly tendered contract and I think the people of Nova Scotia have the right to know ultimately what it is going to cost, but I would be prepared to accept this. You have been in this business now for a few years and you would have an experience range over a few years. Could you indicate generally what your experience has been over those years as opposed to perhaps last year? So I make the question less specific, but nonetheless, you can give us some indication of what the performance has been.

DR. MURPHY: Mr. Rovers will answer from his perspective, but let me just tell you what the range was. When we consolidated businesses around the province - and some 50 businesses were consolidated - Nova Scotians pay their bills, but the range went from about 10 per cent collectability in volunteer services, community services - although some volunteer services were high - to as high as 95 per cent, and so the range was broad. At the end of the day we could say somewhere between 70 per cent and 80 per cent was the number. I can tell you that our experience, I believe, has been in that range. That is why we selected 75 per cent and that is why we were able to negotiate to 75 per cent. Now, I will pass the torch on to Mr. Rovers. Does that answer your question?

MR. DEXTER: I have more information, but I don't feel any more enlightened, let's put it that way.

MR. CHAIRMAN: Mr. Dexter, if you want more specific answers, if the witnesses have that information, we could have a brief in camera at the end of this session and that would protect the confidentiality.

MR. DEXTER: I am not sure I am prepared to accept that but, of course, the other alternative is always to ask the minister. Go ahead, Mr. Rovers.

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MR. ROVERS: Basically when we negotiated the contract, our expectation was that we were prepared to accept the 75 per cent collectability as a target. We anticipated, obviously, that there is a risk that we would have to make up the difference between not collecting the 75 per cent. One of the key elements of the business is that we cannot refuse to provide service to anyone no matter if we anticipate collecting a bill from that individual or not. That is completely irrelevant. We have to provide services equally no matter what the anticipation of collectability is. So there is a substantial risk there.

From a company perspective we anticipated to be able to collect 75 per cent. Otherwise, we would not have negotiated that level. We hope to do better than that and we are prepared to accept the risk of not doing that well. The other part of the contract is that the government solely decides on the user fee issue. When the government increases the user fee, we accept the risk of not being able to collect a higher user fee on the same basis as we accepted the risk of a lower user fee; obviously, the higher the user fee, the more difficult collectability is.

MR. DEXTER: Let's just pursue that for a second because the change in user fees here meant that the burden of the user fee is now going to fall much more greatly on the urban areas. Is that fair? The higher number of usages are in and around metropolitan Halifax-Dartmouth and in and around Sydney, but the way that the user fees are structured are those going to attract a higher percentage of the user fees than used to be the case?

DR. MURPHY: If I could address that, that is a valid point, and the balance that we attempted to achieve was, first of all, we were eliminating user fees for interfacility transports. Those were large numbers of patients being transported out of urban areas to non-urban areas. As you might expect, the transports to rural areas cost more money than it did in an urban area which there was a certain sense of fairness about that. The whole notion of a split rate for those who live further away from a hospital than those who live closer might have made sense in a geographic monopoly that was fairly small and compact and there were 57 of them than it does for the whole province.

The balance between those, Mr. Dexter, and that is a good point, was who benefits from the reduction or elimination which we have done, of inter-facility user fees versus the increase in price, the majority of it being absorbed in urban areas. In fact, in terms of the balance, the impact is pretty evenly spread no matter if you are rural or urban.

MR. DEXTER: There was something I wanted to deal with off the top and I know we should have some time at the end as well. You mentioned two exceptions to the system: Pubnico, and the volunteer service in Louisbourg. There used to be three - Long Island and Brier Island was the other exception. That ceased recently and I wonder if you could tell us what happened there and why it happened?

[Page 15]

DR. MURPHY: I can tell you in broad terms the commercial relationship still exists and that has not drawn to a conclusion. We have a certain level of service and care that we expect to be provided to all citizens of the province. In remaining outside of the consolidation, Pubnico, Long and Brier Islands and Louisbourg clearly said, we will deliver the same level of service with the same performance that any other area of the province will provide at a competitive cost. We then moved forward. It was not much of an issue with Louisbourg as a volunteer operation, but we had negotiations with Pubnico, they adhered to the same standards of care and they came up with a reasonable price compared to the rest of the province. We were not able to achieve that over two years in negotiations with Long and Brier Islands and it was a persistent inability to come to terms in negotiating a contract. We had no choice, except in the public interest, to say that we as a province cannot afford to pay a much, much higher rate here than we would otherwise, so we elected to terminate that relationship.

MR. DEXTER: Well, when you talk about the whole concept of cream-skimming, one of the ways you do cream-skimming is from the bottom up. You take away service and that increases your profitability on the top. I think what people on Long Island and Brier Island are saying, at least from what I am hearing from them, is that they feel that their service has been eroded as a result of that decision. What do you say to them?

MR. MURPHY: We have a difference of opinion and I think that based on the public meetings we have had in Long and Brier Islands, and that EMC has had in the public meetings, that there is absolutely no erosion of service, in fact, the quality of service has been improved in terms of the sophistication of the medics that we have been able to entice into the area.

There are multiple parameters of that, but I think that at the end of the day I would disagree with the statement that you have made.

MR. CHAIRMAN: I want to thank Mr. Dexter and I would like to pass it over to the Liberal caucus, it is 8:48 a.m., you have 20 minutes.

DR. JAMES SMITH: Mr. Chairman, I would like to welcome our guests again. Could we just go over those last numbers again? I think I am clear, but from the Budget Book, most of us were not clear. I know Mr. Dexter has done some questions in Question Period so can we just go through that again with the anticipated total billing this year? Would $11.5 million be correct?

DR. MURPHY: Correct.

DR. SMITH: Okay and the realization would be about $8.6 million, is that correct?

DR. MURPHY: Correct.

[Page 16]

DR. SMITH: The $5 million that is in the budget would be the increase brought in by the user fee, that would go in to make the $11.5 million, would that be correct?

DR. MURPHY: No, in fact, the $5 million in the Budget Bulletin is the increase in return to government. So that is not an increase in billing, that is an increase in . . .

MR. MACKINNON: Is that user fees?


DR. SMITH: An increase in return?

DR. MURPHY: An increase in return on user fees, yes. So, last fiscal year, we projected $3.915 million returned to government on $5.5 million billed; the increase in billings will be $6 million of which we will realize $5 million, for a total of $8.65 million.

DR. SMITH: The billing anticipated this year would be $11 million?

DR. MURPHY: It would be $11.534 million.

DR. SMITH: That is the number that I just said. Is the cost-sharing on that 25 per cent the same for non-Canadians as Canadians? They are billed 50 per cent over premium, but the 75/25 rule still applies on that, is that correct?

DR. MURPHY: I would have to review with the accounting people the details of how that is being split up. Can I get back to you on that? I am not certain of the details to answer that question.

DR. SMITH: That would be fine. It is not a major point. There may be some other things. I won't burden you with a lot of detail. Mr. Chairman, just going back to basics to set the stage here. We have been accused of having a pretty sophisticated system here in Nova Scotia in EHS and ground ambulance particularly, along with the air services.

I wonder if Dr. Murphy could just set the stage - he has been an integral part of that I believe since early on, brought in through the previous government - what his experience has been and his assessment of EHS in Nova Scotia, and why it was necessary to change that and how that change came about; some of the learning and perhaps some of the growing pains through that and where we are today and what the immediate goals are, particularly in measuring outcomes. We are starting to hear a lot of this. The minister is saying in the House, well, we are not going to do it the old way anymore. We are going to measure outcomes in everything we do in health now. I think we have a high-performance contract here that perhaps outcomes can, in fact, be measured. Would Dr. Murphy and Mr. Rovers agree with that? Is this a way to look at other services within health care?

[Page 17]

In summary, I am just trying, for the committee, to set the stage where we were, what took place; are we getting value for dollar in the system; where we are now, and what are some of the immediate changes we can look forward to that would preserve this service? The purpose of that question is that we are seeing cutbacks already in the administration of this program, can this service be developed without modifications? The minister said in the House there are not modifications to the performance contract, even though there is less money going into the system or at least in the administrative budget. Can that be done? And are there anticipated changes to that performance contract, which may well be setting the standards in the province for measuring outcomes in health care?

If that is a little too long, I can shorten it up, but I just thought maybe, we have started out talking about money - but why it was done and where we are now.

DR. MURPHY: In brief, I don't want to take too much time on this because some of it is history.

DR. SMITH: No, I think memories are short, Mr. Chairman. Sometimes members need to be reminded. It is my understanding of having been a minister, and I will be frank about this, that had I not been a minister I don't think I would have known the extent of the change that has taken place and a need for change.

DR. MURPHY: Maybe I should start by saying that most of the issues we attempt to address in medicine, we attempt to address in a data-driven fashion. Fundamentally, EMS is a medical enterprise. It is a medical operation - it is not a transport business - and it is a prime business. So we believe the practice of medicine needs to be a prime feature or focus of EMC and any provider ambulance service. That is a fundamental difference over what occurred five years ago when we had a transport business.

We also feel that EMS is a prime business. It should be the only business that Emergency Medical Care entertains. Therefore, the focus of the employees of that business is focused on medical care. We do not believe that it should operate on the margin of another business which was the old way the business operated. In fact, that was part of the problem we had in understanding what it actually cost to deliver an ambulance service, because most of the services were delivered on the margin of other businesses. There was a very great difficulty when we went to look at it in terms of the allocation of costs and overhead. How much of the overhead of this funeral home or this garage or this other business is actually allocated to the provision of ambulance care?

In fact, as we have learned, ambulance care was the loss-leader. It was the loss-leader to bring in other business for allied businesses, fundamentally funeral homes, but that was the nationwide norm, so it wasn't unusual. I don't want to cast an aspersion or a negative connotation to that. It simply was the way business was done. The fundamental change was

[Page 18]

to refocus from a transport business on to a medical enterprise and to focus the medical enterprise primarily on the delivery of high-quality patient care.

As Dr. Smith suggests, that required that we impose or introduce standards. Standards in terms of the provision of dispatch services. Standards in terms of the training and qualification of the medics, the response times that we expected of them, the gear that they use and the machines they operate to deliver that gear. So the fundamental role of Emergency Health Services was to implement those public policy decisions that were made over time and at the same time move this from a transport business to a medical business with the focus on the delivery of quality care. That is really what we have been concerned with over the last five years.

Now, in terms of outcome, what we attempt to do is to say if we put these inputs in, what comes out at the other end and what did it cost? What is the cost per unit of service? The system that we have designed is a high-data system. We put in a lot of information in the system. All the public utility model systems in North America are data driven, whether that be in response time, reliability, compliance of protocols or the costs: cost per transport, cost per hours of ambulance service, cost per kilometre, cost per unit of service related to vehicle maintenance, et cetera. So, the data in the system now is enormous. What that means, in terms of outcome, is that when you begin to change some of the inputs, and typically dollars - the fundamental role of any EMS system like any health care system is to turn dollars into health care - what we hope to be able to do is to say, if we take more dollars and put them in the system, what will the improvement and outcome be? How can we measure it?

The outcomes we measure fundamentally are many, but there are two big ones. They tend to be survival, because it is easy to tell the difference between someone that is alive and someone that is not. So that tends to be a fairly discernable end point. So the survival rate from out-of-hospital cardiac arrest is a fundamental quality measure, and one we spent a lot of time and effort looking at. The other one is, what is the impact on trauma care? Do people who are injured in the Province of Nova Scotia have as good a chance, better chance or worse chance of being disabled, getting back to work, or surviving, than do people from elsewhere? So we use those two as our benchmarks in terms of outcomes because we can measure them clearly, and that is where the trauma program came from. That is where the EMS program came from, the ability to measure those, the medical oversight programs. So that is the outputs.

A better question is, what if you don't put as much money in the system? What happens then? Well in the past, we didn't have any ability to understand what would happen if we altered the deployment of ambulances in such a way that it reduces the availability of ambulances. We didn't have any ability to understand what it would mean if we had 120 ambulances as opposed to 130 ambulances. I am not suggesting that any of that is going on, but what I can say is that we are now able to sit back and fairly clearly say that if there is less money going in the system, and we were going to begin to scale down parts of the operation,

[Page 19]

we would scale down those parts of the operation where we do not believe there would be an impact on patient care. There might be an impact on efficiency, timeliness of care for some low acuity - low acuity meaning not too sick - or fundamental transportation issues, but not in patient care issues. After we have been in this business now for about three years and with the help of EMC, who analyzed these details day in and day out, we can have some idea of where those things might occur.

Let me say that in any public safety operation or business, there is excess capacity. Excess capacity allows you to be ready to respond to the next emergency. The excess capacity in the ambulance business exists, and it has always existed. In the past, co-allied businesses used it to do fundamental aspects of the other business, whether it was a funeral home business or the garage business or whatever, mowing lawns, painting fences, helping with funerals, et cetera. Now, that excess capacity is being directed - Long and Brier Islands is a good example of that, actually - to community-support activities in terms of health care.

What can these paramedics do in terms of their scope of practice that they can do in their downtime when they are not actually doing a call, that they can actually be productive in a community and, in fact, reduce costs in another part of the system. That was always envisioned. So it is called legitimate use of excess capacity. However, we do have the ability to reduce capacity and that may affect efficiency - how quickly do we respond to a transport in our hospital transport as opposed to how quickly do we respond to an emergency.

[9:00 a.m.]

To get back to your question, Dr. Smith, we now have the ability to say, if we make this change, here is what we anticipate will happen. My job, as executive director of Emergency Health Services, is to say to government if you take this money out, people will die. I am not saying that. I do not believe that. I believe that we have sufficient information about the system now to make alterations, adjustments, reductions and additions in a way that will either improve care or fail to produce life threat. I don't know if that makes sense to you, but that is kind of a wordy answer.

DR. SMITH: Mr. Chairman, I would ask the witnesses, as of now then there are no negotiations going on that would lead to the modification of the contract? Would that be correct? Did I hear that?

DR. MURPHY: Mr. Rovers and I meet on a regular basis to talk about efficiency and it is an inefficient use of time to whisper back and forth. The numbers of dollars that are available for us to use in the system are less than we would have ordinarily projected. So what we are doing is we are sitting down with EMC to talk about how we can adjust the number of dollars in just exactly the same way that Dr. Smith has suggested that we do, to look at those places where outcomes might not be affected. Many of those are in administrative areas within Emergency Health Services.

[Page 20]

So we are looking at those, but I have to tell you we are discussing with Mr. Rovers how EMC might adjust the way that it delivers care in such a way as to require fewer dollars in terms of the contract, but that would be a normal annual event at any rate. We would always expect to do that.

DR. SMITH: I will not tell the minister; anyway, I won't get them in trouble. Mr. Chairman, we spoke about outcomes and statistics on care and would Dr. Murphy feel that, in fact, there are lives being saved now that would not have been saved six years ago? Can you say that?

DR. MURPHY: Oh, I think so. I don't think there is any question about that. There are certainly advanced life-support procedures such as advanced airway care, the promulgation of public access to fibrillation and rapid defib for patients who have cardiac arrest, the administration of medications for the management of asthma, heart failure, allergic reactions that in years gone by claimed lives. The very simple addition of epinephrine to ambulances and some first responder operations, just in terms of peanut allergies in schools, is not only a tremendous comfort to the schools, but we have documented lives saved. We have documented lives saved from the dispatch system which is a zero response capability. When you call for an ambulance and you have a life-threatening disorder, such as the delivery of a child, or a choking child, the paramedics over the telephone now tell you what to do with that and we have documented lives saved from that. So I think that there is lots and lots of evidence that that has occurred.

There are other places though where it has not been so much lives saved as the degree of illness reduced. It is not uncommon for the paramedics to visit a child in a remote area simply because they have run out of Ventolin which is a medication to treat asthma and deliver a Ventolin medication. It prevents a trip to the hospital, it is called treat and release; or if a patient is a diabetic who has a diabetic reaction, where the paramedics now come and start an IV and administer sugar or administer glucagon, which is a medication to reverse low blood sugar, and restore blood sugar to the point where the patient says I am fine, I don't need to go to hospital now, and that is called treat and release. So there is a fair amount of reduction in morbidity and we believe reduction to man the health care system going on. In fact, we can quantify some of that.

Could I just make one other statement, I think it is important. I circulated to members of the committee the results of a survey that as the member of the National Association of Public Utility Models we completed in February of this year. It is a cost and quality tool that the national association does every year amongst its members. There are 14 high performance systems in North America. We are the only Canadian member and so we are dealing with an apples-to-apples comparison. We submitted our information to the organization to allow them to put us in the mix and say where do we fit? Are we the most expensive, the least expensive and where, compared to other organizations, do we fit in terms of our costs for maintenance, our costs for insurance, our costs for training, et cetera? That document allows that apples-to-

[Page 21]

apples comparison to occur. At the end of the day it gives you a cost per unit of service, for instance. So I would draw your attention to some of the issues in that particular document to allow you to address some of the questions you had in terms of cost and quality.

MR. CHAIRMAN: Dr. Smith, you have got a couple of minutes.

DR. SMITH: Yes, a couple of minutes. I guess we will have a second round, I suspect, that will allow for that?


DR. SMITH: One of the criticisms that has taken place in this House of Assembly was that we don't have as many ambulances as we used to. Could you comment on that, Dr. Murphy? I know when I was minister, this was very much an ongoing saga, the number of ambulances. Would you like to just comment on that? I think we have roughly two minutes.

DR. MURPHY: I think it is important that we define an ambulance as a response capable ambulance. It means it is a vehicle that is in working mechanical order that has two trained individuals on board and is ready to respond to a call or is on a call. In fact, for every hour we have one of those in the system, we call that a unit hour. In the system right now we have 860,000-odd unit hours. Those are the number of hours that an ambulance in running order is available to respond to a call or is on a call.

In the past we tended to equate ambulances, whether or not they were mechanically sound, whether or not they were actually on duty or off duty, with public protection. Of course, we don't believe that is true. We believe that unit hours are what really provide care and so that in the past, under the old subsidy arrangement, I believe there were some 155 subsidized ambulances in the system. Many of you know that the mechanical state of the ambulances at that point in time was questionable for many of them. In fact, when we did an audit of the fleet when we began the EHS system, we found that about 20 per cent or 30 per cent of the fleet was inoperational at any one time.

We have a different situation now. We have a highly reliable mechanical fleet. Mind you, it cost us a fair number of dollars to do that, but it is response capable and reliable and we have a fleet redundancy now of about 15 per cent. So even though the number of physical vehicles may be reduced from 155 to 137, we believe that the true number to look at is the number of unit hours and we believe the number of unit hours in the system is exactly the same now as it was then based on our best audit.

MR. CHAIRMAN: Thank you, Dr. Murphy. At this point in time we are going to turn it over to the government caucus and starting with Mr. DeWolfe.

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MR. JAMES DEWOLFE: Mr. Chairman, I think Dr. Murphy is on a roll. I don't want him to get bored so I think, Dr. Murphy, I will at least start off with you and I would like to take you back to last fall. You said earlier that the biggest risk to the public is at the end of a contract. I was wondering if you would outline the circumstances that led up to the dispute between Emergency Medical Care and the paramedics last fall?

DR. MURPHY: Even though I am on a roll, Mr. DeWolfe, that actually is an issue between the contractor and the employee. We have stayed away from that issue fundamentally. I wonder if I might pass it.

MR. DEWOLFE: Then we will pass it.

MR. ROVERS: I will be happy to respond to that, sir. EMC and its employees, when we took over the operations of the many different services in Nova Scotia, at that time there were four different unions. There were some services that were unionized, many that were not. Unionization was occurring before EMC took over some of those operations. Some occurred after. In the first year of our operation unionization was completed and there was a competitive run-off between the four different unions until all paramedics were in the true Labour Relations Board, jointly, or were brought down to one consolidated union operation which happened to be the NSGEU.

At that point, once that union consolidation was completed through the Labour Relations Board we started negotiations with the employees with the union and over a period of time, we recognized at that point that we were operating 50-some different systems, different hours of work, different conditions, different wages, different circumstances under a standstill operation that was required by an employer through the new unionization process and the Labour Relations Board standards.

We negotiated, I think extremely successfully with the union on many of the issues, the collective agreement and except for four or five outstanding issues, which incidentally the union had agreed with us to proceed to finalization with, and had taken a tentative agreement to the membership who did not approve it, the new negotiations were extremely successful with circumstances that evolved with the membership turning down the draft collective agreement, or the process to finalize the collective agreement. At that point, the membership, as was their right, voted to take labour action because of the circumstances. At that point, the government decided to step in and require the outstanding four or five items to go to arbitration.

When that process was completed, the arbitration board was selected jointly by the union and by EMC and the arbitration process was successfully concluded and a contract signed as of January 2000.

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MR. DEWOLFE: Yes, certainly ensuring a dependable and sustainable health care system is the priority of the people of Nova Scotia and a priority of this government and as you mentioned, our government chose to have an independent arbitrator resolve this dispute and at the same time, to ensure the public safety and ensure the fair treatment of front-line health care workers and paramedics was obtained. What was the outcome of the arbitration?

MR. ROVERS: The outcome of the arbitration was the finalization of the collective agreement of the five or six outstanding points.

MR. DEWOLFE: You are talking about pay and hours of work?

MR. ROVERS: The two big ones were pay and hours of work. The arbitration award imposed a settlement for both the union and for EMC which provides for a reduction in the hours of work and an increase in wage rates over the life of the contract until March 31, 2002.

MR. DEWOLFE: The benefits package and the pension . . .

MR. ROVERS: There is a benefits package and pension package - there were five outstanding issues. Hours of work was the biggest one, labour rates was the second biggest one and there were three or so small items which included pension benefits packages and I forget what the fifth one was, but those would be the big money items.

MR. DEWOLFE: It appeared at the time that certainly the unions were trying to scare Nova Scotians, manufacture a false crisis at the time and our government stepping in and resolving the situation through arbitration was, in retrospect, the right way to go.

You indicated, maybe back to Dr. Murphy, that you don't have a breakdown of the real cost to Nova Scotians, but we have now I would think, a world-class ground ambulance service. Where does this place Nova Scotian paramedics in the big picture with their counterparts across the country?

DR. MURPHY: In terms of wages and benefits, Mr. DeWolfe? I believe the wages and benefits are competitive, based on the health care environment, wage benefits of Nova Scotian health care workers. The difficulty is that it is a supply and demand situation and nationwide virtually all jurisdictions are upgrading the quality of the service they provide through EMS. The best examples of that are perhaps New Brunswick, Ontario, Manitoba, Saskatchewan and Alberta where they are moving to high quality EMS services and they are offering much better wages and benefits packages than we can offer here.

I do believe that we have a very competitive package. The attrition rate, based on the registry, has been very low. Paramedics typically have not left the province. I think that a large portion of that success is in terms of the arbitration process. It is tough, it is an emerging

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market nationwide, and the value of having a system where we value the worker in terms of what they provide in terms of medical care is very different than what happens in most other systems. The paramedics who work in this system feel valuable.

I can't detract from the value that EMC does, they do a wonderful job at that. I believe that we, as a society, place an enormous amount of value on what they do. I think that is why many of them elect to stay here.

MR. DEWOLFE: So, you are saying that they are on par with their counterparts across the country, other jurisdictions?

DR. MURPHY: Based on the adjustment for cost of living and other wages and benefits in the health sector, yes.

MR. DEWOLFE: You take those into consideration. Some people refer to it as a world-class ground ambulance service today. Would you consider it to be the case?

DR. MURPHY: Yes and no. I think that what we do is we provide a level of service in this nation that other provinces can't measure or understand because the way they design their system is different. They don't have the amount of data and information that we do in order to understand it. We certainly are competitive in the North American environment with similar systems. I am talking about public utility models. We have a quality of care that is moving towards where they are over the next eight years; we are not there now, we will move there over eight years at a pace that we can afford. We are not going to jump immediately there.

In terms of cost, it means we come in at costing per transport, per call, per unit hour less than they do. We also take advantage of the Canadian dollar, but I do believe that we have a system designed that allows us to reach the highest quality at the least cost; it is going to take us some time to get there as we can afford it.

MR. DEWOLFE: We are talking about the class of the system compared to other jurisdictions. I am wondering about the paramedics themselves, would you consider them as highly trained as they are in other jurisdictions? These front-line health care workers, are they highly skilled in your mind, compared to other areas?

DR. MURPHY: Yes, I think they are highly skilled compared to other areas. The registration requirements that we have in this province exceed those of most other provinces in the nation. That is not because we think we are better, it is because we believe that a fully rounded health care provider needs to have additional skills in terms of dealing with people and they are not simply technical devices. These are people who deal with people on a daily basis and we spend a lot of time cultivating that in terms of what we expect of our paramedics.

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MR. DEWOLFE: So it is fair to say that the end result of this exercise that we went through last fall accomplished two things: ensuring that the public safety was not compromised - and it wasn't, despite the hysteria that was brought on by the unions - and our government's commitment to the fair treatment of paramedics; that was certainly ensured.

DR. MURPHY: It is interesting to ask, and I don't know if I am permitted to do this Mr. Chairman, Mr. Rovers would have a better idea of how many paramedics are actually trying to get into Nova Scotia, which is a measure of how successful we have been.

MR. ROVERS: I think the fortunate part of the whole process is that paramedics now believe that paramedicine in Nova Scotia is a career, has future opportunities. We have been able to attract over the last two years about 150 paramedics to return to Nova Scotia. There has been an increase in the number of paramedics. An example, on April 1st, as part of our union negotiations, the first hour reduction took place in industrial Cape Breton and we required 19 more paramedics and we had no difficulty attracting them.

We currently have a very high volume of inquiries by both high school graduates and university graduates to enter paramedic training programs. I see a real future for paramedics in Nova Scotia, and in other parts of the country or North America to come back to Nova Scotia, we have a lot of inquiries. There is a very positive interest in the future of this industry in this province as a result of the changes that have taken place over the last three or four years.

MR. DEWOLFE: In years gone by, there were certainly a lot of concerns about the ambulance service and we all realized there were some growing pains involved in what was taking place. There were instances of towns and areas going for many hours without an ambulance. Reports were coming into our caucus when we were in Opposition and so on. How is this working out today? Can you give us an idea if there are many problems of that nature today?

MR. ROVERS: We have a province-wide systems status plan that is an integrated province-wide support system. In many places we have more than one ambulance, obviously, in places like Truro, Antigonish, Kentville, Halifax, Dartmouth. In smaller communities, there may be one ambulance, but there is a province-wide integrated system where we either have post-move supports; for example the small village of Oxford has one ambulance and there are two in Springhill, so if the Oxford ambulance is on a call, Springhill is available to back up the communities. So, it is a province-wide integrated system through a central communications centre.

The central communications system in Bedford manages the placement of all ambulances, 24 hours a day. It knows when an ambulance is on a call, what the expectation for additional calls is in the area through the information flow, and provides the integrated

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support system, either through post moves or through warnings that support may be required. So the service is province-wide.

DR. MURPHY: Mr. Chairman, my job is to make sure that what Mr. Rovers says is true. So, what we require of the contractor is that they provide us on a daily basis a report that demonstrates not the inputs, how many unit hours that went in, but whether or not the response time was complied with. Hence, every day we receive at EHS a report of the numbers of calls, where they occurred, what their compliance with standard is, and if there is a late response, then we chase that down. So we expect the contractor to provide the service in the performance contract as stipulated, and if it is outside that performance standard, my job is to chase that down. We do that with the contract provider.

MR. CHAIRMAN: Mr. DeWolfe, five minutes.

MR. DEWOLFE: I am going to pass in a moment to my colleague. I just want to say that as a government, we are no different than the hard-working paramedics of this province. We only have so much money to spend, and we must live within our means. Underlying each and every decision this government makes are key principles that we have outlined in our tenure in government, that is quality service and fairness to the regions and fairness to the people, and value for the money and accountability to Nova Scotians. I think with our plan and your organization, we can only improve upon it and move forward. I think the residents of Nova Scotia can rest assured that they are in good hands at this time.

MR. CHAIRMAN: Mr. Hendsbee.

MR. DAVID HENDSBEE: I have a couple of questions, following up from the questions Mr. DeWolfe had in regard to the allocation of ambulances across the province. I assume looking at the information that you categorized various areas of population through your zones and response times performances, and I assume the department has been monitoring your calls in responses to situations in the areas that you categorized. At what point will you be re-evaluating to see if you have to redistribute either your categories for your zones or perhaps redistribute the assets - like the ambulances - because you are talking about a fair and equitable distribution of resources. When does this re-evaluation come into effect for some of the rural areas that feel they are being under-serviced?

DR. MURPHY: Can I address the first issue first, which is the establishment of what the response zones are. We were required to have that done by December 30th of last year, working together with EMC to establish the response zones, and by April 1st of this year to have the status quo response, what has gone on in the past. The benchmark as we move forward from where we are now to a 90 per cent compliance standard is what we expect.

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We have only just achieved that goal, and even though we can retrospectively apply the standard, and the reason for that is we were late getting our mapping information together to allow that to occur on the computer data dispatch. It does not change, however, the accountability in terms of response time and compliance response time standards.

Now, the second part of your question is an important one, but it is an important one to me in terms of monitoring the outcome. I monitor the outcome of the unit hours that Mr. Rovers distributes around the province, and what I do is I look at communities in response zones to ensure he is in compliance with the contract. Where EMC deposits those unit hours and how they distribute them is entirely within the bailiwick of EMC. So what I will do, even though we care and we all care about where they are distributed, and we have an abiding interest in that, can I just ask Mr. Rovers to address your question of, how often do you review where the unit hours are distributed and where they go?

MR. ROVERS: We review on an ongoing hourly basis, daily basis, weekly and monthly basis. For example, our unit hour allocation by community or by area would depend on our expectation of the call volume for that hour or for that day. So, for example, on Fridays they would be increased, Saturdays and Sundays, they would be decreased, at night they would be decreased. They would be increased during the high call volume time of 8:00 a.m. to 4:00 p.m. They would be reallocated during the day in high volume communities based upon our expectations. It is system-status planning, which is what this is, an ongoing dynamic process. All the time.

MR. HENDSBEE: Before my time runs out, I just want to make a quick comment on behalf of the member for Colchester-Musquodoboit Valley. He feels, for instance, the heavy industry of MacTara Ltd., the farming and forestry industries in the areas, are more accident-prone, the County Exhibition Grounds, with the rural hospital and seniors care facility, and the high recreational activity, be it through the hiking, the snowmobiling and walking trails, he possibly feels that perhaps there should be an evaluation of how the service is being done in that area.

MR. CHAIRMAN: Thank you, Mr. Hendsbee. I am going to pass it to the NDP, Mr. Dexter. We are going to go for 10 minute rounds which will take us to two minutes to ten.

MR. DEXTER: One of the risks of coming before this committee is you get subjected to inane political posturing, and that is I think what Mr. DeWolfe was engaged in. But since he decided to engage in it, my recollection of events with the paramedics are much different than his, and I want you to know this, because he should have a balanced view.

The paramedics came here, not to scare the people of Nova Scotia. They came here because they were scared for the people of Nova Scotia. They talked about what it was like to be at the end of a very long shift, and how that put the public safety at risk. They talked about what it was like to receive wages that weren't fair, and they had to hold down other

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jobs in order to be able to meet their family commitments. They weren't here to scare people. They were here to give legislators a fair picture of what their lives were like and, therefore, the kind of service they could provide when they were at work. To hear a former union leader with the NSGEU come into this committee and talk about hysteria put in place by the union I think is regrettable in the extreme. I say all this knowing full well Mr. DeWolfe is going to get the last say here.

I wanted to pursue something you had indicated to Dr. Smith. It got to the point where it became interesting and then went somewhere else, so I am going to pursue it a little further. You talked about outcomes potentially being affected by not having enough money in the system. It dawned on me that, I don't think this is a startling revelation or anything, but it dawned on me you have gone through a period where there has been an arbitration awarded, where there are increases that are effective to the union. There were back-pay provisions. There are normal cost drivers in the system that are going to push up the cost of the delivery system. It appears to me you are going to recover, I think you said $4.735 million more through user fees. The budget estimate, the net numbers for the ground ambulance services are less this year in the budget estimates than they were in previous years, but not overwhelmingly. According to the budget estimates we have, it is about $123,000 less in the estimates. Will there actually be less dollars available for the provision of ground ambulance service in the province?

[9:30 a.m.]

DR. MURPHY: That is what we are discussing with EMC right now.

MR. DEXTER: But you must know whether or not?

DR. MURPHY: I can say I think we have a sense that that is going to be the fact, yes. We have gone through an administrative reduction in government. What I am asking Mr. Rovers to do is to have a look at the way he does his business and use the same principles in adjusting what his estimates are that we used in adjusting our estimates.

MR. DEXTER: There is only so much that you can cut out of administration and after a while what happens is you get down to service delivery. You have talked about it and I appreciate you can amend the service because you have more information and more data, it may be that you can apply the resources that you have efficiently so that public safety isn't compromised, but it does not mean that there isn't less service. I mean there still may be less service. I guess that is what I want to know, is where can we expect to see the service delivery go down?

DR. MURPHY: Can I just adjust your words a little bit and ask you if you would agree with me? Would you suggest that it means a reduction in capacity as opposed to service?

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MR. DEXTER: I suppose, yes.

DR. MURPHY: Okay, and I believe that that is exactly what we are talking to EMC about, is how much capacity is there in the system now; in terms of that redundant or excess capacity, are there places that we can reduce that capacity?

MR. DEXTER: Was Brier Island an example of that?

DR. MURPHY: No, absolutely not. Brier Island was not an example of that, but there are other areas around the province. Typically you look at areas that have more capacity and more ability to redistribute the capacity around, in areas that are less, it is very difficult to reduce the hours of the availability in a one-ambulance operation. I can let Mr. Rovers address that. He has more expertise on that than I do.

MR. ROVERS: I think the issue that I talked about before is through systems status planning, you look at where excess capacity exists, hour by hour, and if you can reduce excess capacity, you have a chance to influence costs as compared to service and you look at the issue of capacity and service needs in terms of two separate issues. The ability that we have now with the information that we have gathered over the past one or two years, and particularly our ability now to analyse expected demand, hour by hour and area by area, does allow us to assess whether our capacity is excessive to our need at the present time and how can we address that and what possibilities there are, as Dr. Murphy said, and what we can do with excess capacity in terms of other services within the purview of paramedics responsibility and code of practice.

So there are two ways to go. One is what additional services can you provide in a community because you have excess capacity and the second is if you have excess capacity, how can you reallocate them or reduce them.

MR. DEXTER: I appreciate that. There is a little story that I heard during the time the paramedics were here that I thought was very interesting. One of the paramedics told me that when he worked for a private operator, he used to routinely take the ambulance out of service to go to the lumber yard and fill the ambulance up with lumber and take it off to wherever the job site was for his employer. Obviously, there was an ambulance in that community, it clearly was not in service. It clearly was not doing the kind of transfers that we expected. So, you know, I guess they assumed that that was excess capacity that they could use somewhere else.

I guess, back on what you have just said, when we talk about the excess capacity and just prior to that it was said that part of the theory here was that this excess capacity would be used in the community to do other kinds of work and I assume that health promotion and health prevention, or illness prevention initiatives were the kind of things that were

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envisioned. If you take that capacity out and you readjust it to provide active response, then you are affecting the other part of your mandate, are you not?

DR. MURPHY: If I could just address that, that is a crucial point. You never ever want to fill up your excess capacity with things that detract from your ability to respond and so you are absolutely surgical in the way that you select those kinds of things. The issues that you have suggested are some important ones, but at the end of the day, in my view as an emergency physician and an anaesthesiologist, a doer, are not as important as those other public support things such as managing dressing changes, assisting with injections at home, assisting in immunization programs, drawing blood in remote communities because we have the transportation that we are getting it to where it needs to be and a variety of other activities, such as fall-proofing the homes. In some studies as high as 50 per cent of elderly women who break their hips never go home. They don't all die, they go somewhere else, but that is an important initiative that EMS can contribute to and reduce costs. So those are the sorts of things that I think the excess capacity needs to be used for and it must never compromise your ability to respond.

Mr. Hendsbee brought up an important point about excess capacity and what you do with it, you don't always just chop it, like peeling a carrot, you know, what you do is you reallocate that excess capacity to communities that when you sit down and look at the landscape of response profile, you have communities that are overserved and underserved, just to balance that.

MR. DEXTER: Let me ask one final short snapper. Will there be fewer ambulances in the Province of Nova Scotia next year than there are this year?

DR. MURPHY: I would say to you I hope so, but I don't believe that will be the case. I would hope that we would be able to manage the system in such a way that the capital costs of procuring ambulances could be reduced. I do not know that that is going to be the case. Our fleet redundancy now is 15 per cent only because we have such stringent maintenance standards.

MR. CHAIRMAN: We are going to move on to the Liberal caucus and back to Dr. Smith.

DR. SMITH: Mr. Chairman, just so I could be clear and I am not sure, the question was phrased that way, but what the answer was regarding, will the user fees in the budget that we see, as much as we know about it this year, in the opinion of the witnesses, will that cover the anticipated increase of the paramedics and salaries? I am not sure that was answered, but if it was, I apologize. So is there money now available to honour the commitments or the anticipated commitments that will be made to the paramedics?

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DR. MURPHY: I can leave that to Mr. Rovers, if you like, but your first question I think is to me and I think I should answer that. Does the amount of new money in terms of user fees entirely cover the wage increase and the answer to that is no, not entirely, there is additional money in there as well. So it is not all from user fees, but it is all accommodated.

MR. ROVERS: Dr. Smith, we have every intention of meeting the contractual obligations of our collective agreement.

DR. SMITH: Great. Thanks, Arnold, I know you will give it your best shot. I, too, would like to just follow up briefly on the attitude toward paramedics and again say where I guess I would be remiss too, the member for Dartmouth-Cole Harbour mentioned, that I don't believe, Mr. Chairman, that I have seen a more professional group come here to the Legislature for making their wishes and their concerns known on behalf of the people of Nova Scotia than the paramedics. I would like that to go on the record too. I know it is difficult for government to accept those things sometimes and to try to blame the victims, I have told them that personally. Over the years, in government, we had some demonstrations, obviously, and we are getting to be experts in some of that, as I am sure will the people on my right, maybe in the next few days. I knew some of those people since their birth and have known them for a long period of time. I just want to say that I was really impressed that they conducted themselves in a professional manner, the way that I think they do in our communities. I just wanted to say that.

The question, though, would be the standards, the commitments that have been made regarding the standards, is that on track, the P1, P2, P3? Are we able to maintain that time-frame that was set out?

DR. MURPHY: Yes, we are on track with that. The numbers that I have from EMC, last year, delivered us directly on target, in terms of progression from basic life support to advanced life support were there, and they have exhibited the ability to exceed that pace, if we require it.

DR. SMITH: We talked about the communications, the dispatch centres, and the databases, but we haven't talked much about the other trauma programs. There are some at the QE II, I know, that are world-class. Just for a short moment, could we perhaps mention what other systems are integral parts of this whole emergency services? Also, the discussion here this morning would be incomplete if we didn't mention something like Swissair, that type of catastrophe and the response that this province made to that. I was out of the country at the time, and by the time I saw CNN, the ambulances were there. I think that was a compliment to the people sitting across from us, that they have been able to do that.

Mr. Chairman, I just want to say that sometimes we have had some hard times, tough times, from Dr. Murphy, he was very driven and he had a very supportive minister at the time, which was before me, but I might say there is never a question of the standards and the

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measuring of the outcomes and those types of things. I think it is really positive that he and Mr. Rovers were able to come here this morning. We haven't always agreed, necessarily, because I think his standards were so high. How this has all come about and how he and Mr. Deegan were able to go out and effect those contracts with those 50 businesses, like Mr. Boudreau said, he doesn't even want to know how it was done. It was done, and I think that was something I would never have thought could have been done.

The trauma unit at the QE II, that is an integral part of this service. Briefly, and then I will pass over to my colleagues.

DR. MURPHY: The leading cause of lost years of life in Nova Scotia is death due to trauma. The leading cause of death between the ages of 20 and 40 is trauma. The indicator of the health of a system, anywhere in North America and the world, is what your death rate is due to trauma, especially if you should have survived those injuries. The trauma program is now province-wide. There is tremendous commitment at the level of all of the hospitals, the community health boards, the regional health boards, to move to a system of categorizing health care facilities and their ability to manage trauma. That is now implemented.

The Trauma Registry, which is our ability to track patients through the system to determine if they should have survived an otherwise survivable injury is in place as of this year. Finally, the public and professional education portions of the trauma program are fully ramped and the integration of the trauma program at the QE II, with the regional health facilities, through the air program and the ground program is accomplished as of this year. The trauma program is together, and we are seeing the fruits of that now.

The other major programs, such as air-medical transport - air-medical transport is now operating at about 500 transports per year, which is about the limit for a single air vehicle. The training programs for paramedics and the skills maintenance programs for paramedics are now fully ramped, in terms of the ability of maintaining their skills. We are now entering the first re-registration cycle for paramedics.

MR. CHAIRMAN: The honourable member for Cape Breton West.

MR. MACKINNON: Dr. Murphy, we are going to see an increase in user fees this year. How much?

DR. MURPHY: The old range was, if you were transported less than 160 kilometres, return trip, the rate was $60 to the user; if it was more than 160 kilometres return trip, it was $80; that now goes to a flat fee of $85.

MR. MACKINNON: On trips less than 160 kilometers, it is approximately a 30 per cent increase?

[Page 33]

DR. MURPHY: I haven't worked the numbers out.

MR. MACKINNON: The response time, I am given to understand you have your peak hours, let's say 8:00 a.m. until 8:00 p.m. or whatever the time is, and then after that it is scaled back somewhat in terms of the amount of manpower you provide. In rural Nova Scotia, in particular where I come from in Cape Breton County, which is predominantly rural, let's say for example a heart attack victim, what is the response time after hours as opposed to during your peak hours?

MR. ROVERS: It is exactly the same.

DR. MURPHY: If I just explain that, you look puzzled.

MR. MACKINNON: I can probably explain why I am puzzled because we seemed to get a different sense of that last week at our briefing on this particular issue. Perhaps scaling back on manpower would have an impact on the response time.

DR. MURPHY: The standard, though, is no different. If it is, we will detect it early on because we get the reports in terms of response time.

MR. MACKINNON: I am just thinking that if you take a heart attack, you only have so many minutes to go without oxygen. The issue was raised by my Conservative colleague that the strike did not affect the service. That is essentially the issue, the point he was trying to put out that it was just hysteria. Did the strike affect ambulance service in the province?

DR. MURPHY: We did a review of the calls that occurred during the labour disruption, and we did not identify any compromise in any patient care. There was not one death during the period of time. There was not one adverse outcome in that period of time related to the work disruption.

MR. CHAIRMAN: You have just a couple of seconds.

MR. MACKINNON: Thank you for coming before the committee. No sense wasting valuable time. I will pass my time over to the Conservative caucus.

MR. CHAIRMAN: Mr. DeWolfe.

MR. DEWOLFE: I don't want to disappoint the honourable member to my far left there, I will get the last word. It's not the hard-working paramedics that I have a problem with. Disputes are not settled by union-NDP-manufactured false crises and public hysteria. This was proven last fall, and it will be proven today. This government will not be bullied into making decisions that are not in the best interests of Nova Scotians. I will pass to my colleague.

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MR. CHAIRMAN: Mr. Langille.

MR. WILLIAM LANGILLE: Now that we are on the subject that has been brought up here by my colleagues to the left and to my right, I want to go back to last fall, and I just want a short answer please because I want to move on. Was there a contingency plan in place during the paramedic strike last fall?


MR. LANGILLE: Okay. Was that a workable contingency plan?

DR. MURPHY: My view is yes. I will pass that on to Mr. Rovers.

MR. ROVERS: The contingency plan was in place. We did deploy ambulances. We priorized the response requirements. As I think Dr. Murphy said, there was no adverse patient outcome during that time.

MR. LANGILLE: Thank you very much. I want to move on to value for money. I want to move on to the ambulances themselves. The ambulances, I understand, are leased from Tri-Star Industries of Yarmouth. Is that correct?

DR. MURPHY: That is correct. The lease is a capital lease, and we are the lessee, the Province of Nova Scotia. The lessor is I believe a subsidiary of Tri-Star, but consider it Tri-Star Industries.

MR. LANGILLE: I also understand you have a cap of 200,000 kilometres per ambulance, is that correct?

DR. MURPHY: That is correct; three years or 200,000 kilometres.

MR. LANGILLE: After the ambulances are turned in, are they turned back in to Tri-Star?

DR. MURPHY: That is correct. They are turned back in to Tri-Star at the end of that period of time. The view is that at the end of that period of time they still have 35 per cent to 50 per cent of their useful life or enhanced resale value if you wish to turn that into dollars.

MR. LANGILLE: Are these ambulances being sold offshore? Is it correct that they are not allowed to be sold in Canada as ambulances?

DR. MURPHY: There are very few jurisdictions in North America that permit used ambulances to be used, none in the United States. Federal regulations in the U.S. prohibit the sale of ambulances to be reused as an ambulance. In Canada there are isolated pockets of

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provinces. Newfoundland is a notable exception where they permit the purchase of used vehicles.

MR. LANGILLE: I understand that the Caribbean is a prime place to sell these ambulances?

DR. MURPHY: That has become a major market. We have been able to sell the ambulances in Cuba, St. Kitts & Nevis and Trinidad to date. Some have gone to Newfoundland and other places, but typically that is where they go.

MR. LANGILLE: These ambulances you said still have 35 per cent to 40 per cent?

DR. MURPHY: The estimate is 35 per cent to 50 per cent of their useful life which we believe translates into resale value.

MR. LANGILLE: The resale value when it is sold, where do the monies go from the sale?

DR. MURPHY: They are split 50/50. When the ambulances are turned in, they go through a refit to get them up to resale and that refit has an average price of $1,000 to $1,500. Once you do that, the ambulance is then sold offshore typically. The amount of money that it is sold for, termed profit, is divided in half between Tri-Star and Emergency Health Services or government; government gets one-half of that back.

MR. LANGILLE: Looking at a 200,000 kilometre cap, would it be feasible, more value for money to have that maybe 250,000 kilometres or would preventive maintenance kick in and make it not feasible?

DR. MURPHY: No, no. We have learned a lot about the management of a fleet over the past five years and we do believe that there are some ambulances that we may wish to own versus lease and there are vehicles that we may wish to keep for many years. So as we move forward we make clear decisions that we want to be able to have that kind of flexibility, especially if it is in the interests of the public in terms of cost.

MR. LANGILLE: In the urban areas, your wear and tear on your ambulances would be more severe than in rural areas. Do you interchange the ambulances back and forth to get better service?

DR. MURPHY: While we own the fleet, the fleet isn't managed by EMC so that is why I am passing on . . .

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MR. ROVERS: We interchange the ambulances because we have to manage them within the three year-200,000 kilometre limit. For example, if you left one ambulance in Sydney doing long hauls, you use up 200,000 kilometres in 200 days. So we transfer the ambulances from region to region, from area to area, to manage them for maximum mileage and time.

MR. LANGILLE: That makes sense. Now, I want to ask about bases for your ambulances. My observations are that they are in free-standing bases throughout Nova Scotia. Is there consideration given to put them in fire halls, or hospitals, instead of paying leases to other places, would that not make better sense? Can you elaborate on that, please.

DR. MURPHY: Mr. Chairman, maybe I could answer that. I think you are correct. What EMC has done, and they have done a pretty good job of this, is to look at where the least expensive place to put the ambulance is while maintaining the response capability. Sometimes it is fire halls, but we are, through the contractor, paying leases or rental space on all of those. Even if we relocate to a hospital, the leasehold improvements and the rental space, the cost of that is transferred to Health, transferred to EHS, so that we incur that cost no matter where the vehicle is.

What we hope to be able to do for the 60-odd bases around the province in the next iteration of the Department of Health is to address those issues specifically with hospitals because they are part of the system and we believe that if they are in a response-sensitive situation, then we ought to be able to use those facilities without incurring a charge to the public.

MR. LANGILLE: My observations have also been that I see your ambulances continually roving around. I am thinking of gas mileage, and I am thinking of idling mileage. Has any consideration been given to that about the cost incurred for this type of procedure?

MR. ROVERS: In many cases, the ambulances, particularly in metropolitan Halifax, we do post-moves continually to place an ambulance where we expect the next call to come. So, in a place like Halifax, which is a very intensive-use area, the ambulances are significantly on the move. If, for example, an ambulance in a high-use area is on a call, an ambulance from a lower-use area, which could be a half kilometre or a kilometre away, will be moved to the high-use area. It rotates around, so when the first ambulance comes off the call, it goes back to the place that was vacated by the second ambulance. It is a continuous process of placing ambulances where the anticipated next call is going to come from.

DR. MURPHY: If I could just address that as well? Directly to the point, there are two issues being addressed within EMC now. One of them has to do with idling time and post-to-post moves because that does cost money. They are addressing that issue, especially with respect to fuel costs.

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The second one is, how do we improve the efficiency of the kilometres being travelled? That is called loaded kilometres. In the old world, the ambulances that came to Halifax, had a patient on board only half the time, so half of your kilometres were loaded. We are now at a point where we are about 70 to 75 per cent loaded which improves the efficiency of those. We are going to use the gas anyway, we might as well use the transport of patients both ways, not just one way. That is what EMC is doing.

MR. CHAIRMAN: One minute.

MR. LANGILLE: I don't know if I entirely agree with you on this, because I look at a fire department and I see they are stationary. They are not roving around, expecting where the next fire is going to be and so on. It just seems the response time, if it was stationed at a hospital and not being continually driven, would cut down in mileage and time use and so on. However, I am sure you people are looking at that and will make a rational decision.

Just one other quick question. What other companies could bid on the ambulance service for Nova Scotia? I am thinking of Laidlaw and the financial problems they are in with their ambulance service privatization in the United States. What other players actually could come into play as far as bidding is concerned?

DR. MURPHY: I could answer that. I have been contacted by many municipalities in Ontario to ask that very same question. Ontario is in the process of devolving ambulance services to the upper two municipalities, and they are panicked. The reason for that is that at the present time in North America, there are no available qualified ambulance services to bid on your contract.

If you went to bid today, you would be in big trouble. Laidlaw is in huge trouble, divesting themselves of ambulance operations and Rural Metro Corporation, the other major player, is pulling out of Ontario. Their share price has gone from the mid-40s to below a dollar a price. Right now in North America - and this is directly as a result of the health care financing administration decisions in the U.S. regarding ambulance transport - they are in huge trouble. Right now we have, probably, one of the most qualified, large-system operators in North America.

MR. CHAIRMAN: With that I want to thank our two witnesses today for a very professional performance, and to say that next Wednesday, we will be hearing from representatives of Nova Scotia Resources Limited.

It is 9:59 a.m., and with the agreement of the committee, we will adjourn.

Is it agreed?

It is agreed.

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We stand adjourned.

[The committee adjourned at 9:59 a.m.]