Why exactly did the funeral director quit the ambulance service? This is a question that I have wondered about for a long time. The old adages about lack of care or lack of interest and training do not hold up to the fact that the funeral director was in the ambulance business for 50 years before he abandoned it to rescue squads and fire departments.
In the Beginning
Let's begin our search by looking at why he got into it in the first place. Before the Civil War ambulances were pretty much unknown. In the 1800s and earlier when civilians became sick or injured the doctor came to them, in the form of housecalls. Medical technology had not progressed beyond equipping the doctor with any more items than he could carry in the classical "little black bag". At the time of the civil war the equivalent of a hospital pharmacy could be carried easily on a horse's back. There was no need to bring the patient to the hospital, because the hospital could just as easily come to them. The prescription for disease and disability at that time was generally simple bedrest anyway, and this could just as easily be arranged for at home.
There were some large cities (generally European) that maintained wagons to transport the sick but they might just as well be used to pick up the dead as to transport the living. Little actual curing went on in hospitals before medical science discovered such important concepts as bacteria and antibiotics and abandoned such treatments as bloodletting. Hospitals at the beginning of the 19th century were little better than the streets as a place to die while being cared for by nurses who might as well have been prostitutes and doctors who would today be considered charlatans and butchers.
The need to efficiently provide some care for massive numbers of casualties at central locations during wartime, lead to the production of ambulance wagons. Before the American Civil War, the battlefield wounded might lay on the field for days before being removed to a designated treatment area. Solders used to pray that they would be killed quickly in combat rather than becoming wounded. There were few disabled veterans from the Revolutionary War, you either came through unscathed or died on the field. Caring for the wounded takes a lot of resources that were viewed as being better spent on people who could still fight. Specific surgical procedures and medical treatments that were aimed at recovery did not begin until Florence Nightingale worked during the Crimea war and battlefield evacuations as a routine procedure did not start until the Civil War.
After every war the increases in medical knowledge (usually trauma care) find their way into the civilian world. Battlefield trauma management has probably done more than anything to prove the value of surgical intervention. Surgeons were not allowed to experimentally cut into bodies during peacetime. But during war they were allowed to perfect their techniques and show that under the right conditions their "cutting" could "cure". These conditions existed in a hospital operating room. As the world's surgeons became more skilled, the reasons to bring the patients to the hospital increased. And who in town had a vehicle that could transport a sick person in a lying position? Why the undertaker of course! Ambulance service began as an outgrowth of the need to transport human bodies supine. As an added advantage, operating the ambulance service helped to improve the public image of the local mortician and could result in business tips and referrals about who was dying or who was already dead. There are numerous anecdotes about a funeral director's ambulance being headed for the hospital until the patient died, when they would then "conveniently" continue on to the funeral home. And guess who got the job of burial?
The Ambulance Part of the Funeral
Funeral directors continued this arrangement well into the 1950's. They used their ambulance service to desensitize the morbid aspects of their business. They would pass out telephone stickers that listed the name of their mortuary under "emergency ambulance." People would not keep the name or advertising from an undertaker in their home but they would proudly display the same phone number on their list of people to call in an emergency! What did it cost the funeral director to operate his ambulance? I don't think most funeral directors really knew. My studies of the funeral industry in postwar America shows that the morticians of that time were generally very nice people but horrible businessmen. They managed to operate mortuaries on caseloads of less than 100 per year, sometimes as low as 50-60. Imagine making a profit on a little more than one funeral per week, AND operating the ambulance. Postwar America was a prosperous time and funeral directors were often building impressive structures and chapels. They were buying new automotive equipment frequently in an effort to keep up with the funeral home down the street. But did they know how to pay for all this expansion and acquisition?
In 1959 there was an article in Mortuary Management magazine explaining how to depreciate the value of a professional car against business income to insure that there would be enough capital in the business to replace that car 4 or 5 years hence. Imagine needing to explain this basic accounting concept to people who should have been shrewd businessmen. Where were their accountants???
Funeral Directors and Accounts Receivable
Funeral directors were too often nice guys about collecting on their debts. They frequently allowed their bills to be paid out of estates. This meant that they would perform a funeral service (including giving cash up front to preachers, cemeteries, and government recording offices), then wait 6 months to a year or longer for probate to be settled before they got paid. Think what this did to their cash flow! Because of the screwy things that happen in probate they might never get paid.
Consider the following true story:
A man is in the middle of a divorce. He lives near his parents in a town away from his wife. When he dies his parents arrange for the funeral, and the mortician allows to have his bill to be paid out of the estate. Because he was not actually divorced, the wife now inherits all his assets and because the parents arranged the funeral (not the wife) she is found to be not responsible for the debt. The undertaker forgot to get the parents to guarantee the funeral contract. This case actually made it up the supreme court and the funeral director lost. He was out the entire expense of the funeral.
Not very smart from a business sense but it illustrates how trusting some funeral directors were. In the funeral literature there is no end to the number of free funerals that the industry gave away. It seemed that whenever there was a disaster involving multiple deaths of very poor people (such as a tenement fire or a mass murder) some funeral director would step forward and perform the service for free, including caskets! (sometimes the caskets would be donated by a casket manufacture)
The funeral industry cash flow became such a crisis that in August of 1961 the Casket Manufactures Association officially voted to stop the shipment of units to funeral homes that were more than 90 days over due. By inference this meant that 60 day accounts were so routine as to be normal, and accounts greater than 90 days overdue were common. (try getting your mortgage bank to go for that one!) By 1965 advertisements were commonly being run in funeral trade journals by companies that would buy "uncollected debt" offering 90% of the total for accounts from zero to 90 days graduating down to 1% for accounts that were 5 years old.
I do not see how anyone can run a business while holding on to and not collecting 5 year old accounts. In his defense, the funeral director did not always work as hard as he could to collect the accounts receivable because he was commonly owed money by the people that he lived with. He knew that the local widow did not have any funds since her husband passed away and he did not want to be seen as the nasty greedy money collector taking somebody's last dime ESPECIALLY after they had just suffered "a death in the family". So how did he stay in business? Creative accounting. He charged enough from the people who could pay that the business managed to show some kind of a profit at the end of the year. He was also aided by the fact that it was a family run business and the labor costs of family members were considered negligible because salaries would be drawn only during good times.
Economics of an Ambulance Service
Mixed into this crazy business environment was the ambulance service. The side of the business that required 24 hour labor coverage, increased vehicle maintenance on a coach that is sure to be driven hard and the job of trying to calculate the cost and inventory of supplies used per run that even today baffles modern computer systems. Training wasn't much. A Red Cross Advanced First Aid card was the most that was required and renewal wasn't much of a problem. Many of the persons transported, of course, did not pay any part of the presented bill so their costs would be added to the interfacility transport bills that did pay. In the end it was much easier to conceal this hidden overhead in a funeral service than in an ambulance run. This is how most funeral home ambulance services were operated until the late fifties or early sixties.
The Ambulance Tackles Technology
During the late fifties technology began to catch up with the ambulance. Supplemental oxygen became the standard of care. Recusistators, inhalators and Rico Suctions became necessities. In order to operate these devices additional training became required. Basic CPR training lead up to the Emergency Medical Technician curriculum that we have today. All of this training costs something and the increased costs were often hidden in the price of funerals not the ambulance runs. To be fair it would not be unusual for the allowable charges of ambulance service to be regulated by local laws, the funeral director might have his hands tied about how much he could charge. The US has a history of feeling that all EMS work should be free, or next to it.
The first reference that I find to funeral directors screaming "uncle", came in January 1960. It was then that a letter of inquiry was published in Mortuary Management from a funeral home asking for suggestions from readers about how to dump their ambulance service and not lose the good will that had been built up in their town over the years. How not to be seen as the person who left the community without any emergency medical transport. Most of the respondents said that they too had tried but eliminating the ambulance service could not be done. One person sold out to two "Korean war vets" who went bankrupt within months another donated the ambulance to the fire department who let it sit out behind the station and deteriorate while refusing to provide service. Another entered into an agreement with his competitor that if they both dropped the service the town would have to pick up the slack. At the eleventh hour the competition reestablished service and attempted a smear campaign against the other.
Enter Jessicia Midford
In 1963 Jessica Midford published a book titled The American Way of Death. Jessica was an average woman who found herself having to arrange her mother's funeral. She entered into the funeral industry at the height of their "creative accounting" phase. She found she could not compare prices between funeral homes because they did not give out price information over the phone. She could not compare costs and services between competing homes because all their services were rolled into the price of the casket. She could not adjust the price of a funeral by declining services that she did not want (i.e. use of chapel, use of limo, embalming etc.) because funeral homes routinely rolled everything into one package deal. Her entire book spotlighted on these unethical (today illegal) practices that some (most) funeral homes engaged in at that time. This book changed an industry probably more than any book has changed any industry in history. The result was that laws were passed forcing (sometimes strongly encouraging) funeral homes to compete on a price basis, disclose the costs of all services and refrain from selling any unwanted or non-required services. Because the funeral side of the industry now had to stand on its own economically the costs of the ambulance service could no longer be hidden in the price of funerals.
The 1966 ICC ruling
In 1966 the federal government in the form of the Interstate Commerce Commission made a significant change to the ambulance industry. The ICC is the governing body that among other things, creates the rules that long haul truckers must follow. Generally these rules are in the spirit of public safety. Rules that govern the safe operation of trucks including how long a driver can be behind the wheel make the roads safer for everyone. In 1966 the ICC stated that because ambulance services conducted business on the federal highways they fell under the jurisdiction of their rules and those of the Fair Labor Standards Act. Because most ambulance drivers do not actually drive longer than the maximum hours required that provision wasn't a problem, the problem came when they required that the minimum hourly wage (and benefits) must be paid to ambulance personnel whenever they were employed. This included all the stand by and sleeping time. This was probably the fatal economic blow to funeral home based ambulance services. They could no longer hide their salaries by employing family members or other funeral home workers as stand-by attendants.
The White Paper Report
In 1966 The National Academy of Science published a "White Paper" report entitled Accidental Death and Disability: The Neglected Disease of of Modern Society. This report outlined how; poor automobile design, poor design of both highway surfaces and accessories (light posts, sign posts etc.), and the lack of adequate training of ambulance attendants caused increased morbidity and mortality. Out of this came the Highway Safety Act and the DOT curriculum for the Emergency Medical Technician (EMT) program. This was the final straw. It would not be possible for funeral home employees to remain current in their primary profession (embalming and funeral directing) while also training and retraining as EMTs. The funeral director now had a perfect justification for relinquishing emergency care to people who wanted to provide it, and more importantly encouragement from the community to practice their primary profession of funerals while suffering no ill will from the community for leaving them abandoned. In the end it was the community requesting the funeral director to give up the ambulance service.
Prepared by Jim Crabtree
for the So-CAL Chapter of the Professional Car Society Newletter