Where's the money?

After several months of digging, the West Lafayette Clerk's office was able to dig up several emails sent to Chief Need from Franciscan that contained board of directors packets that were sent to him during 2023-2024. This gives us a window into the financial state of TEAS that helps give context to why response times are the way they are. One of the initial responses I got when starting this work was that it clearly must not be financially viable for TEAS to do more than it's doing today. Is it, though?

Some Finances, at Last

On page 7, you'll find the following "Statement of Income". The most important piece of this that we can check against other data is the "YTD Actual 03/31/2024" column that shows everything for the first quarter of the year.

Net Operating Income

You can see under the "Net operating income" row there was a $243,986 surplus for the quarter. Assuming an even distribution of income for the rest of the year, this comes out to just under $1m surplus for the year.

"That's not all that much" you might say, but this is before TEAS raised its rates by approximately 70% somewhere between the middle of 2024 and the point in 2025 when Wabash Township opened its ambulance service.

We know this because:

• You can see the "Gross Charge/Billable Runs" row on the income statement says they're averaging $869.14 per run.

• Here are the discussed rate changes in the Q42023 packet:

• Public records requests to Wabash Township show that the medical billing company sent them the then-current rates of other emergency ambulance providers in the county, on which TEAS' rates were listed. You can see below that by the time middle of 2025 rolls around, the highest level of care went from "$3,000" in the above proposed rates, to "$3797.28".

If you do the math on Q1 of 2024's numbers, multiplying the percentage change in rates 2023 to 2024 to the "Net Patient Service Revenue" row (The amount of revenue collected after billing fees and write-offs are done), that comes out to be around $1.3m per quarter, or around $5m per year in additional collected revenue, with no corresponding increase in expenses.

If you look at the rate changes from the proposed 2024 rates to the known 2025 rates, they're collecting even more revenue today.

Did they improve services?

Non-profit organizations are expected to reinvest their operating surplus into improving services for their charitable purpose instead of trying to turn a profit. That's why they're given preferential tax treatment.

In this case:

1. No additional units were purchased.

2. As noted in my previous posts, Franciscan has advertised that all units are Advanced Life Support (ALS) staffed and they're staffing 2 ALS chase cars, but they're not.

   • Only 1 chase car is being staffed

   • Several of the units are being staffed at a Basic Life Support (BLS) level

3. Response times have not improved at all throughout the county

4. The units that are being staffed

   
   

Where did the money go?

It's built into the bylaws of TEAS, Inc that Franciscan and IU share a 50/50 split of the profit/loss of TEAS. See the screenshot below from the bylaws, Article II, Section 11. So where does it go? It is siphoned out into the hospital systems instead of improving response times.

Is that legal?

Maybe. I'm not a lawyer. Indiana Code says distributions can be made "in conformity with the purposes of the corporation", which generally seems to mean that if two non-profits have compatible charitable purposes.

TEAS, Inc's charitable purpose is as follows:

“The goals and objectives of the Corporation are as follows:
(a) To operate or provide a business to be known as “Tippecanoe Emergency Ambulance Service” (“TEAS”) that provides governance for emergent transportation, pre-hospital care incident to emergent transportation, and medical transport services primarily serving Tippecanoe County and that engages in other lawful purposes related thereto (“Ambulance Services”);

(b) To provide leadership and facilitate coordination in the provision of Ambulance Services and other services related thereto, including professional education, research, centralized strategic planning, capital finance, marketing, entering into mutual aid agreements, securing accreditation of the Ambulance Services, and such other administrative and management activities as shall be identified in order to enhance quality, reduce unnecessary duplication of resources, and increase efficiencies in the provision of Ambulance Services in Tippecanoe county;”

In contrast, Franciscan Alliance's mission is as follows according to their form 990 tax returns (The only public docs I have access to):

"Franciscan Health Foundation, Inc. (The Foundation) raises, invests, and disburses contributions to support the programs and services of Franciscan Alliance, Inc. The overarching purpose is to continue the healing ministry of Christ in accordance with the teachings of the Roman Catholic Church and in partnership with others to provide a full continuum of health care services. The foundation is dedicated to addressing the ever-growing healthcare needs of our patients and to supporting all Franciscan Alliance, Inc's health centers in their commitment to building healthier communities. The funds raised and disbursed by the foundation support the needs of patients without the resources to attain care without regards to age, sex, relition or national origin; increase patient access to medical technology; furthers scientific and medical education opportunities in order to improve care; and promotes wellness within the communities we serve."

TEAS, Inc's purpose is to run an emergency ambulance service that provides pre-hospital emergent care. Is it really a compatible purpose to use the operating surplus to fund hospital care, or whatever other wing of Franciscan or IU they might move the money to that has nothing to do with providing "pre-hospital emergent care"?

Even if those two things are deemed "compatible", are we OK with distributions occurring when there are no response time thresholds before they occur? Have any of the involved public officers within TEAS, Inc ever considered this?