Public Reports and Testimonies

Remarks by Alan D. Aviles
President, NYC Health and Hospitals Corporation

Good evening, I am Alan Aviles, President of the New York City Health and Hospitals Corporation (HHC). Thank you all for coming tonight. This is our fourth annual public meeting for 2010. As always, I am eager to hear what HHC’s communities have to say about our performance, especially at this very challenging time in health care.

First, I want to recognize HHC’s senior executives here in Brooklyn: our host this evening, Antonio Martin, Senior Vice President of the Central Brooklyn Family Healthcare Network and Executive Director of Kings County Hospital Center; Peola Small, Executive Director of the Dr. Susan Smith McKinney Nursing and Rehabilitation Center; Arthur Wagner, Senior Vice President of the South Brooklyn/Staten Island Healthcare Network and Executive Director of Coney Island Hospital and George Proctor, Senior Vice President of the North Brooklyn Healthcare Network and Executive Director of Woodhull Medical and Mental Health Center. Although George only took up his position at Woodhull a few months ago, when Iris Jimenez-Hernandez moved to the Generations Plus/Northern Manhattan Network, he is well known to all of you here at Kings where he served admirably for 15 years. I want to thank Tony, Peola, Artie, and George and all the talented staff in their facilities for the stellar work they do every day caring for the residents of Brooklyn.

I also want to thank Tony Martin for coordinating HHC’s response to the disaster in Haiti. Kings County serves a large population of Haitian New Yorkers and it has our largest number of Haitian staff. Since the beginning of this year, Tony has worked with the Office of the Mayor, New York State Representatives and federal officials, as well as local elected officials and community-based organizations, on HHC’s immediate and long term response.

I also need to acknowledge the critical support and guidance we receive from our Board of Directors, under the leadership of Dr. Michael Stocker. My special thanks to Board members who are here tonight.…… and to the members of our Kings, Woodhull, Coney Island and McKinney Community Advisory Boards, who advocate on behalf of our public system and work hard to keep us grounded and responsive to the needs of our patients and communities.

A year ago, I spoke at this meeting about the financial challenges that HHC faced. Dealing with these financial challenges has made this a very difficult year. More difficulties lie ahead, but with healthcare reform enacted, there is some light at the end of the tunnel, as I will explain.

Before I begin, however, let me stress the important role that we all must share, if we want to preserve the mission of our public hospital system. Despite these challenging economic times, we at HHC are absolutely committed to providing New Yorkers broad access to quality health care, and rendering that care in a way that reduces healthcare disparities and steadily improves the health of our communities. We ask in return that as government at all levels looks to reduce its own budget deficits you actively advocate for continued funding of our mission to serve all New Yorkers without regard to their ability to pay.

As the State’s budget gap grows -- and as future budget cuts threaten to undermine our system and our mission – I ask you to recognize that it’s your healthcare that is at risk and to stand with HHC in its advocacy efforts.

Background

As you all know, the role that HHC plays throughout the City continues to be absolutely essential. Last year, HHC facilities served 1.3 million adults and children. We admitted about 225,000 patients into our hospitals, approximately 30% of them right here in our Brooklyn hospitals. We provided outpatient care to another one million patients, 285,000 of them in Brooklyn. We delivered 23,000 babies across the City. More than one-third of our patients – a total of more than 450,000 last year – were uninsured. Providing all of this care is extremely expensive; it now costs us roughly $6 billion annually.

At this time last year, I told you that HHC faced an extraordinary budget shortfall of $1 billion as a result of the combined effects of rapidly rising costs in such areas as medications, medical equipment and employee pensions; hundreds of millions of dollars in cuts to our Medicaid reimbursement from the state and federal governments; and a dramatic increase in uninsured patients.

Late last year, I shared details of the $300 million cost-containment plan that we had launched earlier in the year. It included a sharp reduction of all discretionary spending, and improvements in revenue collection to capture every dollar owed to us from government payors and private insurance companies for the services that we provide and it included a commitment to reduce staffing levels through attrition. We have carried out that entire plan successfully and by the end of this year, we will have reduced our budget gap by about $300 million. These measures helped, but still fall short.

This past year, with the help of a consulting firm, our senior leadership completed work on a second plan to further reduce our budget gap without compromising our ability to meet the essential needs of our communities. I won’t go through all the elements of this second cost-containment and restructuring plan; it consists of 39 projects that we will complete over the next four years. To fully implement the plan, we must consolidate some programs, right-size some of our operations, contract for targeted support and technical services, close some low-volume clinics, and restructure our largest long-term care facility located on Roosevelt Island. The entire plan, when implemented, will reduce our budget gap by another $300 million. The plan was released this past May and is available for review on our public website.

We have already begun to implement some of these proposals. Layoffs of central office staff, as well as construction and plant maintenance staff, have occurred in recent months. And we closed several small clinics several months ago, including the Williamsburg Dental Clinic, the Wyckoff Gardens and Howard Houses Child Health Clinics, and the Fifth Avenue Health Center here in Brooklyn. We have reached out to all the patients served by these clinics to link them to alternative care either at another HHC facility or with available community providers. We have also begun the longer-term process of changing our relationships with our affiliate partners to reduce the total number of different agreements we have to administer and to more tightly align our physician workforce to strengthen our ability to function as an integrated delivery system. Such a change in our affiliate relationship at Coney Island was accomplished seamlessly several months ago.

We regret that layoffs have become necessary to help address our budget deficit, especially at a time when alternative employment opportunities continue to be scarce. But, these are the tough choices we have to make if we are to remain faithful to our mission, protect our core patient care programs, and prevent the need for a more drastic reduction or elimination of services.

Even after taking these painful actions, we still fall short of a balanced budget by hundreds of millions of dollars. Fortunately, our goal to stabilize HHC’s finances has been aided greatly by significant additional financial assistance -- in the amount of $350 million -- authorized by the Mayor and the City Council earlier this year. We are grateful for this critical financial support, especially at a time when the City is struggling with a budget deficit of its own and has very limited flexibility. Without this City support, however, we would not have had the ability to target and phase-in the planned reductions and restructuring over a four-year period to minimize disruption to our delivery of care.

The gap closing actions on our part – both those already taken and those planned – will ultimately address only about $600 million of our projected $1.2 billion budget deficit. However, in addition to the $350 million in immediate financial support, the City has included in its financial plan an average of almost $300 million annually over the next several years and, with the help of the State, it appears that these amounts will be matched by federal funds under the supplemental Medicaid program. We are awaiting final federal approval of this additional funding, and with it we will have achieved a more secure fiscal footing for the next several years. We are grateful for this strong support of our safety net mission from all three levels of government.

Health Reform

Turning to a brighter note about the past year, we finally saw the enactment of comprehensive healthcare reform. As a result, important insurance reforms are already taking place, allowing children to remain on their parents’ insurance coverage up to the age of 26 and giving patients with pre-existing conditions more affordable insurance options.

But most of the key provisions of the new health reform legislation begin in 2014 and it is projected that more than one million uninsured residents of New York State may become insured, either through an expanded Medicaid program or through new insurance options that will be made more affordable through federal subsidies.

Equally important, healthcare reform provides funding opportunities for systems that are working to be more accountable for improving the health of their communities through comprehensive primary care, better coordination of care, and more effective chronic disease management. Such “accountable care organizations” may elect to work out arrangements with the federal government and the state to be reimbursed in ways that better support an activist approach to promoting health and preventing unnecessary hospital admissions. Of course, our public hospitals and health centers here in Brooklyn and across the City have invested heavily in very comprehensive primary care services, including smoking cessation services, routine HIV testing, and the use of advanced information technology tools to help patients better manage their asthma, diabetes, hypertension, and depression.

Formal certification that our facilities are “patient-centered medical homes” is the foundation of HHC becoming a recognized “accountable care organization.” Our facilities, including every one of our primary care sites, will be applying for certification as a “patient-centered medical home” by the end of this year. Not only does the medical home designation establish that we are delivering primary care in the way that is most calculated to improve the health of our patients, but, importantly, achieving this designation for all of our primary care sites will increase our Medicaid reimbursement by roughly $15 million annually. Woodhull Hospital and the Cumberland Diagnostic & Treatment Center were given formal designation as medical homes in August and Coney Island received its designation in October. The applications for Kings County Hospital and the East New York Diagnostic and Treatment Center will be submitted by the end of the month.