EMERGENCY RESPONSE SERVICES: Background and Motivation 6

The mechanism which allocates patients to hospitals can also have unintended consequences, in that it affects the incentives of hospitals to adopt various technologies. According to the triage protocols, certain patients should almost never be allocated to hospitals without a sufficient level of emergency services, and cardiac patients may tend to be allocated to hospitals known for cardiac care. Thus, hospitals may have a “business-stealing” incentive to increase the rating of their emergency room or their available technology (Vogt, 1997).

Anecdotal evidence suggests that hospitals are aware of the discretion of ambulance operators, although their response to this discretion is not always as sophisticated or expensive as increased technology adoption. In many localities, hospitals provide free supplies to the ambulances, as well as amenities for ambulance operators such as access to lounges supplied with food and beverages. more

Empirically, there is wide variation across counties in the provision of 911 services.

Some of the heterogeneity may be accounted for by efficiency considerations. For example, counties where addresses are assigned systematically see lower benefits to E911. Differences in population may also account for differences in adoption across counties, since, as a service with adoption costs and fixed costs, 911 should exhibit economies of scale, at least initially (systems which become too large may experience coordination costs). Further, the costs of adoption and implementation of 911 may vary across counties. Consider the nature of these costs. When adopting E911, it is necessary to assign new addresses, create new maps, and develop a computerized database, a process is very labor-intensive and usually takes at least six months to a year to complete. Furthermore, the telephone equipment, caller identification database, and the system of call-taker workstations must be procured and installed. While systematic data about the start-up costs of E911 is unavailable, based on several cases, we estimate a typical county has a startup cost of between $1 million and $4 million.