Cooperatives: An EMS Case Study

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Cooperatives An EMS Case Study
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Cooperatives in U.S. Economy

• Cooperatives are new to EMS but not to the
  general economy
• Cooperatives are strong in many sectors

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Key Cooperative Characteristics

• Owned by the users
• Controlled by the users
• Benefits distributed according to use

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A Day in the Life of Cooperative America

• 3 million people in cooperative housing
• 180 million in sales from members of grocery
  and hardware co-ops
• 22 million eat at fast food restaurants whose
  owners are members of purchasing co-ops
• 72 million people belong to co-op credit unions

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Cooperatives are Strong in Rural Areas

• 26 million served by rural utilities (electric,
  telephone, cell phones)
• 3.4 million members of farmer co-ops that
  generate 287 million in sales per day

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Famous Co-op Brands

• Our Own, True Value and Ace Hardware are
  distribution co-ops
• Taco Bell, KFC and Burger King buying co-ops
• Sunkist, Ocean Spray, Welches, Blue Diamond
  Almonds
• Land O Lakes, Cenex-Harvest States
• Associated Press, C-Span

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Why Develop Cooperatives?

• Address a commonly felt need
• Improve well being of members
• Achieve market power
• Do things that exceed ability of individual firm
• Integrate into additional parts of product
  transformation process

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Co-ops Are Difficult to Form

• Democratic decision making
• Missing hero
• Someone must bear costs disproportionate to
  benefits
• Unfamiliar organizational form

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Keys to Successful Cooperative Formation

• External Factors
• Real/Perceived Problem
• Available financial resources
• Available physical resources
• Available consultants/advisors
• Support of local leaders

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Keys to Successful Cooperative Formation

• Internal Factors
• Local leadership
• Clear/Agreed-Upon vision
• Realistic expectations
• Trust
• Early success
• Offensive reason for being
• Representation
• Communication

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NCEMSC is Non-Profit but Acts Like a Co-op

• One member-one vote
• Focus on improving well being of member
  organizations
• Democratically elected board of directors.

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Founding Members of NCEMSC

• Gold Cross, HealthEast, and Rice Memorial
  Hospital
• Filled missing hero role
• Developed trust
• Provided valuable expertise (RFPs, Legal,
  Marketing, etc.)
• Established clear vision

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Why an EMS Cooperative?

• 1997 Balanced Budget Act
• Changing ambulance reimbursement
• Preservation of the safety net
• NHTSA defines EMS as this to the Health Care
  System
• Minimize closures
• Minimize service degradation

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Vision and Mission of the NCEMSC

• ...a network of stable, independent emergency
  medical services providers and related
  organizations in a five state area.
• formed to reduce members costs through group
  purchasing.

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Goals of the NCEMSC

• Reduce costs or minimize impact of increasing
  costs
• Participate in legislation related to coop issues
• Enhance the quality of EMS among our members
• Be viewed by industry as a leader in product
  evaluation in the EMS sector

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Core Values

• Principles and core values that guide the NCEMSC
• We value high quality supplies and equipment, and
  provide them to members at the industrys best
  prices
• We are committed to maintaining and enhancing the
  independent, autonomous operation of EMS
  providers.

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Core Values, continued

• We value, need and will actively seek input from
  all types of EMS providers, and from all levels
  of member organizations
• We will treat all members equitably, regardless
  of size, location or organizational structure.
• Membership in the NCEMSC and participation in
  cooperative sponsored programs is voluntary.

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Who can join the NCEMSC?

• Any organization, regardless of size or
  structure, that provides emergency medical
  service to the public
• First Responders
• Municipal Fire and Ambulance Service
• Local Red Cross chapters
• Non profit or for profit ambulance service
• Volunteer Rescue Squads

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The Early Days

• Minimal Membership
• Three founding members
• Receipt of a W.K. Kellogg Foundation Grant
• Assistance in the development of the Co-op
• Purchase of Equipment (Computer projector, booth
  supplies)

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Membership Growing

• 1997 - 3 members
• 1998 - 3 members
• 1999 - 26 members
• 2000 - 96 members
• 2001 - 150 members/8 states
• 2002 384 members/11 states
• August 2003 425 members/15 states

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Greater Successes

• BLS service - 20K savings on new ambulance
• Hospital saved nearly 11K on one software
  purchase
• BLS service saved 500 on vital signs monitor
• On a pace to exceed 1M in medical supply
  purchases in 2003
• States joining in groups

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Who Funds the Co-op?

• Membership dues are low
• The same amount for everyone
• Guaranteed to save or your dues back
• Vendors are primary funding source
• Minimum percentage of sales returned to the Co-op
• Written into the contract

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Were on the web at www.ncemsc.org