ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
April 26, 2007

On Thursday April 19, over 100 members of my senior clinical and administrative team gathered at the Corporate Training Center at Jacobi Medical Center for the third in a series of Senior Leadership Forums that are helping us to continue to work towards our goal of being one of the safest healthcare systems in the country by the end of the decade. An informative full-day training was presented by expert David Marx, JD, President and Founder of the Just Culture Community and author of "Patient Safety and the 'Just Culture': A Primer for Health Care Executives."

Over the last year I have provided regular reports to you about the work we have undertaken to develop a culture that is perceived by all staff to be open, fair, just and supportive of overall system safety. This work is absolutely critical to our patient safety goals and helps us create and sustain a robust, learning organization. Our goal is to move away from the culture of shame and blame typically associated with healthcare organizations toward a system that focuses on strengthening our systems, communications and processes to limit the opportunity for errors to occur. A just culture holds individuals accountable in a fair and predictable way for reckless conduct but otherwise strives to make staff feel comfortable and compelled to come forward to report on mistakes, errors and perceived risks to patient safety and to encourage and reinforce safe behavioral choices. Our ultimate goal is not to punish but to learn from our mistakes so that we may provide safer, patient-centered care.

Over the next few months, we hope to be able to provide similar Network-based training for other facility clinical and administrative leaders and middle managers. We will keep you informed of our progress.

Earlier this week conferees from the U.S. House and Senate finalized the Iraq emergency supplemental appropriations bill which contains funding to support American Troops in Iraq and Afghanistan. Embedded in the legislation is a one-year moratorium on a proposed Medicaid rule change (Limiting Public Providers to Cost) that would reduce federal funding to HHC by $350 million in the first year alone. Also included in the bill is language that would prevent the Administration from restricting Medicaid payments for graduate medical education, which in the first year would cost HHC $200 million in federal funding and another $200 million in a State match. The House narrowly passed the bill yesterday by a vote of 218-211. The Senate is expected to pass this legislation today. President Bush has signaled that he intends to veto the bill, as the legislation includes “timetables” for withdrawal of U.S. forces from Iraq which he opposes. Congress will therefore need to revise this “must pass” bill. HHC continues to advocate with legislators to maintain the moratorium language in the final version which is ultimately sent to the President for his signature. New Yorkers who played key roles in ensuring this provision’s inclusion in the legislation include: Congressional Conference Committee members Nita Lowey and Jose Serrano; House Ways and Means Chairman Charles Rangel; and Senators Charles Schumer and Hillary Clinton.

As you all know, a final agreement on the $121 billion state budget was reached between Governor Spitzer and legislative leaders in the last days of March and passed on April 1st. The Legislature negotiated significant restorations of the amount the governor was seeking to reduce from Medicaid spending. The agreement also accepted the Governor's proposed changes to New York’s public health insurance programs that HHC has long advocated, including streamlining the application and recertification process for Medicaid, Child Health Plus and Family Health Plus.

Notwithstanding the positive insurance initiatives, managed care premium rates for Medicaid, Child Health Plus and Family Health Plus will be frozen for one year resulting in an estimated loss to MetroPlus of $12.5 million. This freeze will not affect the anticipated premium rate increase associated with the emergency department rate increase agreed to last year.

There were a number of actions taken in the State budget to reduce Medicaid spending that will affect HHC facilities, such as a 25% reduction in the hospital and nursing home trend factor, reductions for Graduate Medical Education funding and reductions in workforce recruitment and retention funding. Nursing homes will see a two-thirds reduction in grants for quality improvement along with a reduction to workforce recruitment and retention funding with eventual phase-out over three years. Overall, HHC will receive $54 million less this year as the result of these budget actions.

However, at the same time, an agreement was reached between the Mayor's Office and Governor's Office that fundamentally changed the flow of supplemental Medicaid funds owed to HHC, and, as a result HHC will receive the full benefit of these funds going forward. This negotiated result between the City and the State fully restores the apparent direct cuts to HHC in the Medicaid budget. Beyond that, this commitment to permit HHC to receive the full measure of supplemental Medicaid funding intended to support its mission and to underwrite a significant portion of its deficit in serving the uninsured has placed HHC on secure financial footing for the near term. If we are successful in protecting the supplemental Medicaid funding that the proposed CMS rule would undermine, our solvency over the longer term would be greatly enhanced. HHC’s present healthy cash reserve position is a reflection of the strong support that our system now enjoys from both the Mayor and the Governor. We are grateful to OMB Director Mark Page, his counterpart in the State Division of Budget, Paul Francis, as well as to Dennis Whelan, the Governor's Deputy Secretary for Health and Human Services and Deborah Bachrach, the State's Medicaid Director, for their respective roles in bringing about this positive result for HHC.

Several other important health policy initiatives were agreed to in the final budget agreement, including a $5 million appropriation for palliative care training programs, authorization for the creation of chronic care case management programs for Medicaid enrollees with co-morbidities, and $5 million to establish a Medicaid reimbursement rate for telehealth services by home health providers.

The Gouverneur Nursing Facility was surveyed by the Joint Commission from April 17th through the 19th. The facility received an excellent report with minimal requirements for improvement and many accolades from the surveyor. Executive Director Mendel Hagler and his staff are to be commended for their performance on this test of quality. The Joint Commission now surveys all facilities on an unannounced basis. Three additional HHC facilities will be surveyed at some time this year by the Joint Commission - Elmhurst Hospital Center, Jacobi Medical Center and Metropolitan Hospital Center.

HHC is collaborating with the New York City Health Department to enroll several thousand young women in the Nurse Family Partnership, a program that has been proven to improve the health of at-risk mothers and their babies. Eligible women are first time mothers making their first prenatal visit less than 28 weeks into their pregnancy. The program is available at no cost to the patient, regardless of immigration status. Patients will be enrolled from Queens Hospital Center, Kings County Hospital, Lincoln Medical and Mental Health Center, Metropolitan Hospital Center, Woodhull Medical and Mental Health Center and Harlem Hospital Center.

A patient enrolled in the program is visited at home by a specially trained nurse throughout her pregnancy and periodically until her baby is two years old. The visiting nurse works with the mother and the family to help ensure a healthy pregnancy and a healthy baby and to provide guidance about continuing education and career development. The nurse ensures that the mother has appropriate referrals for health care, child care, job training and other services in the community. Positive outcomes for participants have included fewer childhood injuries, improved school readiness for children, fewer subsequent pregnancies, increased intervals between births and increased maternal employment.

On April 11, 2007, Harlem Hospital hosted a conference at the New York Academy of Medicine entitled "Closing the Gap in Stroke Disparities." There is a disproportionate stroke burden among African Americans and Hispanics and conference participants reviewed the root causes of this disparity, and discussed evidence-based approaches for the treatment and prevention of stroke.

In 2005 the Harlem Hospital Center Stroke Center launched a multi-year Stroke Initiative to provide screening services and educate the community to recognize stroke symptoms. One of the most successful programs to date of the Stroke Center has been the Hip Hop Stroke Program, which has been presented to over 1500 elementary school-aged children, to educate them about lifelong healthy habits that prevent stroke and to teach them how to recognize stroke symptoms. Hip Hop Hall of Fame artist Doug E. Fresh is an enthusiastic spokesman for the program and to the delight of all attendees, he served as Master of Ceremonies for Harlem's first annual stroke gala fundraiser immediately following the conference.

Since Harlem's Stroke Initiative began in 2005, the percentage of stroke patients who arrive within the crucial three-hour time frame for successful treatment has more than doubled, greatly improving the chances of many more people to realize full stroke recovery. Congratulations to the Harlem Stroke Center for these encouraging results. The Harlem community is fortunate to have your leadership on this important health issue.

New York City celebrated Immigrant History Week, April 16-22, to honor the experiences and contributions of immigrants in the five boroughs. While this celebration week focused on arts and education events to build cross-cultural understanding, HHC used the opportunity to reassure immigrant New Yorkers of our commitment to health care privacy and confidentiality. HHC and the Mayor’s Office of Immigrant Affairs once again broadly redistributed an “open letter” in 12 languages that delivers a simple message: HHC cares about your health, not your immigration status.

You may recall that we issued this letter last year in the midst of heightened debate concerning immigration laws and in response to reports that fear of having their immigration status reported was keeping some New Yorkers from seeking healthcare services. We must continue to remove any worry our patients may have about having their status disclosed so they can focus on what is really important - keeping their families healthy. The open letter will be redistributed to HHC patients and staff, community and immigrant advocacy organizations and ethnic papers across the City. Reminding patients about our open door policy is one of the many ways HHC is committed to serving New York’s immigrants.

In recognition of Mother's Day, HHC will launch a promotion campaign to increase breast cancer awareness and encourage women over 40 years old to get an annual mammogram at any of our acute care hospitals. The campaign includes multi-language print and radio advertising and directs the public to “Dial 3-1-1” for more information and to learn where they can get low or no cost screenings. Last year, HHC facilities performed nearly 90,000 mammograms and saw a significant increase - from 65% in 2005 to 79% in 2006 - in the percentage of cancers that were found in early stages, when there is a better prognosis for successful treatment. All our facilities work closely with the Healthy Women's Partnership Program to extend no cost mammograms to women who qualify. The campaign will specifically include:

• multi-language radio and print advertisements that will appear for two weeks before May 13 in various stations and ethnic publications across the city;
• multi-language flyers to be distributed by HHC's Healthy Women's Partnership outreach staff;
• appearances by HHC experts in public affairs programs on participating radio stations; and
• an electronic Mother's Day card that can be downloaded from our website and sent to remind mothers and all women over 40 to get their mammogram this year.

New Yorkers will be able to learn more about breast cancer screening and mammograms and to view our ads, by visiting HHC's web site at nyc.gov/hhc.

At a City Council hearing on overcoming language barriers in the healthcare setting on April 11, Dr. Karen Scott-Collins outlined HHC's language assistance programs and some of the innovative work that has been done in this area by HHC’s facilities. The presentation noted that more than 100 languages are spoken at HHC facilities every day and that 50% of the patients served in some HHC facilities catchment areas speak little or no English. The New York Academy of Medicine, the New York Immigration Coalition and the Commission on the Public's Health System also testified before the Council on overcoming barriers to care and language access services and applauded HHC and our facilities for our efforts to provide robust language services to our patients.

For the fifth year in a row HHC is participating in the national public awareness campaign during Cover the Uninsured Week, April 23-29, by sponsoring insurance enrollment events at health fairs in every borough of the city. This year the national campaign is focused on enrolling uninsured children. An estimated 1.8 million people in New York State are uninsured and approximately 400,000 of them are children.

At HHC, we've made enrolling children a top priority in our facilities. In 2006 our managed care partners, MetroPlus and HealthFirst, enrolled nearly 37,000 uninsured children in Child Health Plus, New York State's managed care program. Our child health centers help children from low-income families enroll in Medicaid and Child Health Plus and our HHC Options program allows many more uninsured families and working poor to have access to affordable healthcare, regardless of immigration status or ability to pay. We applaud the nationwide efforts of our healthcare colleagues during Cover the Uninsured Week, at the same time that we continue to make quality healthcare affordable for all New Yorkers every other week in the year.

On Thursday, April 12, 2007, HHC participated in National Alcohol Screening Day. Seventeen HHC facilities had information and screenings available, including Central Office, which had information and staff available to talk with the public outside 125 Worth Street. More than 3,700 individuals received information and over 1,500 were screened. For the last several years, HHC has led the nation in the number of participants and received awards from Screening for Mental Health, Inc., the national organization which sponsors the event. Last year, Metropolitan Hospital had the highest level of participation in the United States. Alcoholism and chemical dependency are grave health threats in the communities we serve and this national screening day provides an opportunity for our behavioral health staff to educate our patients on the dangers and warning signs of this serious illness.

On our agenda today, is an Affiliation contract renewal for your review and approval. This Agreement with Staten Island University Hospital (“SIUH”) is for general care and behavioral health services at Sea View Hospital Rehabilitation Center and Home for three years, from July 1, 2007 to June 30, 2010. The agreement will provide our patients/residents with timely emergent care, specialty outpatient care and inpatient care from the same providers with minimal disruption, and no transportation expenses.

The proposed Affiliation Agreement, like the prior one, will continue to compensate SIUH on a cost basis. Because of the small size of this contract and since SIUH will only provide services on a part-time basis, additional performance indicators beyond those already being tracked as part of the Corporate quality assurance program are not included. The total contract cost is expected to be approximately $991,000 for the three-year contract period.

On April 18th I attended a memorable event, at the invitation of Gulfport Memorial Hospital in Mississippi, to celebrate the unveiling of a new immunization van purchased with funds donated by HHC employees and matched by Pfizer, Inc. in the wake of Hurricane Katrina. Linda Brooks, an administrative assistant from Woodhull Hospital, was among those who accompanied me and she represented all HHC employees who helped make the new medical van a reality.

You will remember that shortly after Katrina hit the Gulf Coast, HHC employees banded together to collect more than $173,000 to aid their colleagues at two public hospitals in hurricane-stricken Mississippi and Louisiana. After learning of the generous outpouring from HHC employees, Pfizer, Inc. agreed to match every HHC employee dollar raised with nearly two more. The total donation of $500,000 was given to Louisiana State University-Health Care Services of New Orleans and Memorial Hospital at Gulfport.

Gulfport Memorial determined that the best use of the $250,000 they received would be to finance a new mobile health van to serve some of the worst-hit residents of the region, many of whom had lost everything, were in dire need of health services, and could not reach the public hospital. The van replaces a mobile medical unit which is being retired after 13 years of local community service. On April 23 the new unit began its operations, providing childhood immunizations, adult screenings and general health information to the local community. I'm extremely proud of the HHC staff, and their generous contributions to their sister public hospital whose determination and resilience in the face of a devastating disaster continues to inspire us all.

On March 30, HHC recognized National Doctors Day by honoring 27 remarkable physicians for their commitment to advancing the mission of our public hospital system. These individuals exemplify the expertise, compassion and collaborative spirit that is helping to drive performance improvements across our vast system and truly represent the exceptional talent among the several thousand physicians who treat HHC’s 1.3 million patients each year.

This year’s awardees were selected not only for their leadership and clinical skills, but also for their cultural competence and sensitivity in treating a vulnerable and diverse patient population. In fact, the 27 physicians receiving the Doctors Day awards reflect the cultural diversity of our patients and hail from different corners of the globe, including Puerto Rico, Spain, India, Pakistan, Korea, Cuba, the Dominican Republic and various parts of the United States. These HHC National Doctors Day Award recipients and all the other dedicated and talented physicians in our organization are helping us to make HHC one of the most safe, effective, efficient and patient-centered health care systems in the country.

• On March 15, Dr. Joseph Masci and the infectious disease health care team at Elmhurst Hospital received the President's Volunteer Service Award for their work to improve HIV care in Russia. Dr. Masci's team visited Orenburg, Russia to share their expertise and train health care providers, and Russian doctors, nurses and government officials also visited Elmhurst to learn that facility's infection control and care management techniques. Dr. Masci's team was one of four in the country selected for this international assignment by the American International Health Alliance and the United States Agency for International Development.

• HHC has been recognized by the National Association of Public Hospitals and Health Systems with an honorable mention award in the 2007 NAPH Safety Net Awards category of Reducing Health Care Disparities for its HIV Testing Expansion program. The NAPH awards committee was highly impressed with HHC's outcomes in the first year of the initiative - a 57% increase in testing, with 76% of newly positive patients receiving and keeping their first appointment for primary HIV care. These results were achieved through the use of rapid tests, the integration of testing into routine care and increasing the range of staff who could offer and provide the test.

• The Bellevue WTC Environment Health Center has been designated to receive half of the $4.7 million raised by the New York Times 9/11 Neediest Medical Campaign to help those who developed serious illness after the attack on the World Trade Center. Gouverneur Healthcare Services also receive a grant from the New York Community Trust for $530,000 for treatment of people with health problems related to living and working near Ground Zero

• Queens Cancer Center has been awarded a $39,000 grant from the Susan G. Komen Foundation to fund a support group for children and teens whose parents are battling cancer and receiving treatment at Queens Cancer Center.

• Woodhull has received a $50,000 grant from the Starlight Foundation to fund the training of families in the care of their newborns and effective family health practices.