When you dial 911 and Wall Street answers the call

A Tennessee woman slipped into a coma and died after an ambulance company took so long to assemble a crew that one worker had time for a cigarette break.

Paramedics in New York had to covertly swipe medical supplies from a hospital to restock their depleted ambulances after emergency runs.

In each of these cases, someone dialed 911 and Wall Street answered.

The business of driving ambulances represents just one facet of a profound shift on Wall Street and Main Street alike, an investigation by The New York Times has found. Since the 2008 financial crisis, private equity firms, the "corporate raiders" of an earlier era, increasingly have taken over an array of civic and financial services that are central to everyday American life.

Today, people interact with private equity when they dial 911, pay their mortgage, play a round of golf or turn on the kitchen tap for a glass of water. Private equity put a unique stamp on these businesses. Unlike other for-profit companies, which have years of experience offering a service, private equity is primarily skilled in making money. And in many of these businesses, The Times found, private equity firms applied a sophisticated moneymaking playbook: a mix of cost cuts, price increases and litigation.

In emergency services, this approach creates a fundamental tension: the push to turn a profit while caring for people in their most vulnerable moments.

For governments and their citizens, the effects often have been dire. Under private equity ownership, some ambulance response times worsened, heart monitors failed and companies slid into bankruptcy, according to a Times examination of thousands of pages of internal documents and government records, as well as interviews with dozens of former employees.

Since the 2008 financial crisis, private equity firms have gone from managing $1 trillion to managing $4.3 trillion — more than the value of Germany's gross domestic product — according to the advisory firm Triago. Retirement nest eggs are fueling the growth and sharing in private equity's risks and returns: Nearly half of private equity's invested assets come from pensions.

Warburg Pincus, Kohlberg Kravis Roberts & Co. and other major private equity firms have invested in emergency services, a business that routinely holds the lives of customers in its hands. While this represents one small corner of private equity, which traditionally used debt to seize underperforming companies, it captures the industry's newfound pervasiveness.

Of the 12 ambulance companies recently owned by private equity, three filed for bankruptcy in the last three years, according to public filings and S&P Global Market Intelligence, a research service that tracks more than 1,100 major ambulance companies in the United States. Those three companies had problems that predated private equity. But no other ambulance company tracked by the research firm filed for bankruptcy during that period.

The latest blowup came in February, when TransCare EMS, controlled by the firm Patriarch Partners, filed for bankruptcy. One day, cities and towns up and down the East Coast had TransCare services; the next, they didn't.

"Private equity has, in this case, threatened public safety," said Richard Thomas, the mayor of Mount Vernon, New York, which relied on TransCare. "It's not the way to treat the public."

Patriarch's owner and founder, Lynn Tilton, said in a statement that she was "deeply saddened by the unfortunate circumstances that triggered the abrupt end to TransCare's operations and the heartache it has caused for many of its devoted employees." She noted that TransCare, like other ambulance companies, "faced the obstacles inherent to its business model."

Rural/Metro, long one of the nation's largest ambulance companies and one of the few operators of private fire departments, did a tour through bankruptcy, although it reorganized and stayed in business. One private equity investor took Rural/Metro into bankruptcy, and another helped get it out.

In a statement, Warburg said it "invested in Rural/Metro with the objective of growing and strengthening the company's business."

"Despite several initiatives undertaken by the company's board and management team," the statement said, the "challenges Rural/Metro faced were too difficult to overcome."

While private equity firms have always invested in a diverse array of companies, including hospitals, their movement into emergency services raises broader questions about the administering of public services.

"We're reaching new lows in the public safety services we will help provide, especially in very poor cities," said Michelle Wilde Anderson, a law professor at Stanford University who specializes in state and local government. Private equity firms, she said, "are not philanthropists."

A TransCare ambulance pulled into a hospital parking lot in Westchester County, New York. They were there not to bring in a patient or sign paperwork but to go "ER shopping": swiping supplies to replenish critical items TransCare could not afford to replace in its ambulances.

After an ambulance finishes a run, hospital staff members often restock medications as a courtesy. But TransCare emergency workers described pressure from supervisors to go further and raid supply carts, sometimes without the hospital's blessing. On occasion, one TransCare worker would act as lookout while "the other one would just be grabbing stuff," said Emanuel Almodovar, a former employee.

The supply shortage — and the extreme measures taken to address it — was just one warning sign of TransCare's demise. In February, it became official: Employees received an email from a supervisor declaring, "We are being told to cease operations immediately."

In 2003, Patriarch — which manages a sprawling portfolio of more than 70 companies — helped rescue TransCare from an earlier bankruptcy. For years the company, which once had 2,000 employees, showed signs of improvement, with ample resources and high morale. But former TransCare employees have described pressure to cut costs and increase billing as the company weakened in recent years.

In Loudon County, Tennessee, another ambulance service was unnerving local officials.

After 11 years of relying on Rural/Metro, the Tennessee county wanted to part ways in 2014. So it sent letters to the company outlining grievances: Rural/Metro employees slept through an emergency call. A Rural/Metro driver refused to transport a dead body because it would "stink up" his ambulance. Another Rural/Metro worker, who later said she had offered to respond to an emergency even though she was off duty, had enough time to smoke a cigarette while the company scrambled to assemble a full crew. The patient later died.

In the year since private equity led the company into bankruptcy, Rural/Metro had endangered "the health and welfare" of its citizens, Loudon County said in a letter to the company. It was, as the letter put it, "a complete system failure."

Data on the quality of ambulance companies' performance is scarce at the national level and difficult to compare town-to-town or company-to-company. A basic metric — how often ambulances are late — is often defined differently, if it is measured at all.

Still, data can show how one company changes over time, and a Times analysis of data obtained under freedom of information laws from five of Rural/Metro's major markets suggests that service in four areas suffered under private equity ownership. The Times examined where Rural/Metro operated exclusively, in or near cities.

In one town, response times surged; in another, penalties skyrocketed. In a third, county officials time and again received a dreaded alert: no available ambulances.

Officials in Knox County, Tennessee, said they started worrying in April 2015 when Rural/Metro alerted them twice that it had no ambulances available for emergencies, forcing them to rely on other providers. That is known as a "level zero." In 2015, the county penalized Rural/Metro $110,000 for level zeros.

After private equity took over Rural/Metro, new posters appeared on the walls of ambulance and fire stations, featuring a caricature of a uniformed employee delivering a mandate: Get a signature.

In other words, get patients to sign documents that can be used to bill them.

"Almost always, if the patient is alert, they will be able to sign," he says.

The posters — just one element of Rural/Metro's aggressive billing practices while owned by private equity — promoted "Do the Write Thing," a policy instructing employees to document every detail of a patient's treatment.

The policies, Rural/Metro said, would help patients by ensuring that bills were accurate. But employees complained that the process distracted them from caregiving and put them in the awkward position of seeking signatures from ill or medicated patients.

Do the Write Thing "didn't sit well with the firefighters," said Nico Latini, who has worked at Rural/Metro for a decade. "We operate under a high level of integrity and we do the right thing every day — with an R, not a W."