ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
December 20, 2007

The Institute for Healthcare Improvement (IHI) held its 19th Annual Forum on Quality Improvement in Orlando, Florida December 9-12. The forum is the largest annual international congress on quality and patient safety and was attended by over 6,500 participants with an additional 15,000 people viewing portions of the Forum via satellite broadcast.

This year HHC was featured in the IHI's 2008 Progress Report, which focuses on quality improvement and was given out to all the attendees at the Forum. The article, which was included in the transparency section of the report, praised HHC's web publication of infection and mortality data, citing our corporate strategy of using public accountability as a tool for quality improvement.

Caroline Jacobs, HHC Senior Vice President for Patient Safety and Accreditation and Regulatory Services, gave a presentation at the Forum entitled "A Bold Vision for Patient Safety at the New York City Health and Hospitals Corporation." Her presentation provided an overview of HHC’s patient safety journey as we strive toward our goal of making HHC one of the safest healthcare systems in the nation by 2010. The session generated considerable interest among the 180 Forum participants in attendance.

HHC employees were able to see many of the presentations in real time via the satellite transmission, which was televised in Woodhull Hospital’s main auditorium. More than 100 HHC employees attended some portion of the satellite broadcast, including Central office staff, patient safety officers and medical staff from the facilities. Among the presentations they saw was the Keynote by Donald M. Berwick, MD, who is president and CEO of the Institute and a world-renowned expert on patient safety. Other presentations included "When Safety Programs Make Us Less Safe," "The Nursing Advantage; Best Practices and Promising Approaches to Achieving Clinical Excellence" and "Execution of Strategic Improvement Initiatives to Produce System-Level Results."

Congress is hoping to finish all critical legislation before leaving at the end of this week. An Omnibus Spending Bill for Federal Fiscal Year 2008, which totals $517 billion was sent to President Bush last night. This bill combines appropriations for all federal departments except for that of the Department of Defense which had already been approved.

The Omnibus bill includes $108 million in federal funding for 9/11 health needs. These funds, for the first time will be available for the treatment of residents and office workers as well as first responders. We anticipate some federal funds finally flowing to HHC’s World Trade Center Environmental Health Program.

The Omnibus bill also includes Congressional earmarks which fund projects at Lincoln, Metropolitan and Woodhull Hospitals.

A second bill on Medicare, Medicaid and SCHIP went separately to the President. Unfortunately, HHC’s top priorities -- inclusion of an extension of the May 25 , 2008 legislative moratorium on the implementation of two Centers for Medicare and Medicaid Services (CMS) regulations, the first Limiting Public Providers to Cost and the second eliminating Graduate Medical Education (GME) from the Medicaid program -- were not in the bill; nor was the clarification language that we wanted, stating that the Outpatient Upper Payment Limit (UPL) rule which CMS proposed on September 28 should be covered under the existing May 25, 2008 moratorium.

Other health care related highlights in this bill include:

• Reauthorization of the State Child Health Insurance Program (SCHIP) until March 31, 2009, with funding provided to allow states to maintain current enrollment;

• Freeze of the Inpatient Rehabilitation Services compliance threshold at 60% - instead of the scheduled 75% -- including hips and knees reimbursement, and comorbid conditions. This is a positive development for HHC facilities.

• A six month Medicare Physician payment increase by 0.5% (until June 30, 2008), which replaces a scheduled 10.1% cut, ensuring that Congress will need to legislate again on health care during the coming months; and

• Long Term Care Hospital (LTCH) regulatory provisions, including a three year moratorium on implementing the “25% rule”(no more then 25% of patients can come from a single facility) to free standing LTCHs.

This month, our facilities, staff and the Corporation have again received a number of noteworthy acknowledgements.

Woodhull Medical and Mental Health Center received the Gold Award from both the American Heart Association and the American Stroke Association for quality management of both Coronary Artery Disease and Heart Failure - the only hospital in New York City to receive the Gold Award in both categories. The American Society of Health System Pharmacists also recognized Woodhull this month for accomplishments by its Anesthesiology Department. In addition, the hospital recently received designation from the New York State Health Department as a Stroke Center. Congratulations to Woodhull for these achievements.

On December 6, the Department of Juvenile Justice gave HHC special recognition for distinguished leadership and invaluable support in providing health services to New York City's detained youth. The young people who reside in these detention facilities often have serious health concerns and HHC's contributions have been greatly appreciated.

And finally, Dr. Oladipo Alao, HIV Medical Director at Harlem Hospital, received the 2007 Dr. Linda Laubenstein Award for HIV Clinical Excellence from the NYS Department of Health AIDS Institute. Dr. Alao has achieved notice for his clinic leadership, and has also introduced and fostered approaches in HIV/AIDS care that emphasize the importance of training the patient to become an effective partner in care, undertaking daily management of medication regimens and identifying and dealing with specific health concerns.

This month, with the introduction of HHC Advantage, HHC has entered a new era in its efforts to support a more effective partnership with the physicians in private practice and community health centers that treat patients in our communities. The program, based on an application developed at the Queens Health Network, is a web-based system designed to offer seamless linkage between physicians and HHC facilities. The program offers greater convenience for referring physicians, greater efficiencies for hospital staff in managing larger referral volume, and reporting functionality that will help senior executives to identify areas for improvement. It also provides a secure, HIPAA-compliant vehicle for patient tracking and ensures that consult reports are returned to referring providers in a timely manner.

Training of HHC staff has begun at Coney Island Hospital and will be rolled out to all HHC facilities by late spring 2008. After the system is implemented internally, we will begin to reach out to train selected providers and community health centers on the application.

As I've reported to you in the past, HHC has been working to insure that depression screening is more consistently integrated into our primary care practice, especially for patients with chronic diseases, such as diabetes, asthma and heart failure. By more effectively identifying and treating depression as part of primary care, we address an important, but often neglected, dimension of our patients’ overall health. Moreover, for patients with chronic illness, depression can be a formidable barrier to patient engagement in better medication compliance, as well as diet and lifestyle modifications, that can enable more effective management of chronic disease.

From December 2006 through November 2007, approximately 72,000 patients in HHC primary care clinics were screened for depression using an evidenced-based questionnaire that is embedded in our electronic patient record. Of those, 1,720 (or roughly 2.5%) showed signs of depression and most have begun treatment within our primary care settings.

As more patients are diagnosed with depression, the importance of providing clear guidelines and decision support for primary care clinicians has become apparent. One tool created to help address this issue is the "Depression Pocket Guide", developed by our corporate office of Healthcare Improvement, in collaboration with Bellevue and Elmhurst hospitals. The pocket guide summarizes a standardized treatment protocol for patients diagnosed with mild to moderate depression. Chronic Care Coordinators at our facilities have introduced the Pocket Guide to primary care clinicians, and are continuing to arrange in-service training to heighten awareness around depression screening and the protocols for its effective management.

A copy of the Pocket Guide has been included in your Board packet today.

As HHC recently observed World AIDS Day, it was heartening to see that HHC facilities are on-track to reach our corporate goal of 150,000 HIV tests this fiscal year. Between July and October of this year, HHC facilities tested 49,993 patients - almost exactly one-third of our goal in the first third of the year. More patients tested means that more patients will know their HIV status, and those who learn that they are infected with the HIV virus will have access to early, and therefore more effective, treatment.

LaRay Brown, HHC's Senior Vice President for Corporate Planning, Community Health and Intergovernmental Relations, testified for the Health and Women's Issues committees of the City Council on the services provided by HHC for HIV positive women and children. After acknowledging the City Council's strong financial support for the expansion of HHC's HIV rapid test program, Ms. Brown described various HHC programs, such as medical treatments to prevent HIV transmission to babies from HIV-positive mothers, and the HIV Special Needs Program run by MetroPlus, which addresses the special health needs HIV positive women. She also discussed programs to treat children and adolescents who contracted the HIV virus before birth, and the importance of teaching them the skills they will need to manage their medical condition and stay healthy as they grow into adulthood. Last year, 48% of the people who tested positive for HIV at HHC facilities were women.

HHC's major modernization projects are continuing to progress toward completion.

• At Kings County Hospital, work continues on the seven-story, 300,000 square foot behavioral health pavilion that will provide for 230 private and semi-private inpatient mental health and chemical dependency beds, a new psychiatric emergency center, and a wide range of outpatient and day treatment programs. The new behavioral health pavilion will replace and consolidate services now provided in seven older buildings on campus. Construction is scheduled to be completed by the end of 2008.

• Harlem Hospital's major modernization project is underway and scheduled to be occupied in 2011. As you know, this project will include renovation of the existing Martin Luther King Pavilion and construction of a new pavilion on Lenox Avenue. The new pavilion will include an emergency department, surgical suite, diagnostic and treatment services, a critical care suite and a modern radiology center. The project also includes preservation and restoration of historical art that has been a part of the Harlem Hospital complex since the 1930s.

• Work continues on Jacobi Medical Center's new 125,000 square foot ambulatory care pavilion. This four-story facility, which is scheduled for completion in 2008, will accommodate outpatient services, including general medicine, surgical sub-specialties, and women's health care services.

• The expansion of the Emergency Department and construction of the new medical clinic annex at Lincoln Medical and Mental Health Center continues in progress. The new two-story glass-enclosed annex, which will be used for medicine clinics, is scheduled to be weather-tight by January 2008. Upon completion of the new clinic annex next year, the existing emergency department will be renovated and expanded, with new visitor and ambulance drop-off entrances, as well as state-of-the-art medical technology.

• The design is nearing completion for the modernization of Gouverneur Healthcare Services. This project will house HHC's first full-scale "Culture Change" long-term care community. The project will re-design the flow of patients, residents, families and staff to improve wayfinding, making the facility more open to community use, and creating a state-of-the-art ambulatory care center. Groundbreaking for the project is anticipated for spring 2008.

• November 30- In observation of World AIDS Day, Dr. George Alonso, Director of Infection Control at Elmhurst Hospital, was interviewed by WADO 1280 AM Radio and WNJU Telemundo 47 about HIV/AIDS. Dr. Alonso explained HHC’s initiative to expand HIV testing and described the services available for persons infected with HIV/AIDS across the corporation. Television coverage of World AIDS Day also included a story from NY1 News- NY1 Noticias with an interview with Dr. David Stevens of Gouverneur Healthcare Services.

• December 2- Staten Island Advance reported that Sea View Hospital Rehabilitation and Home was the recipient of the Ernest Amory Codman Award given by the Joint Commission on Accreditation of Healthcare Organizations. The newspaper said that an enhanced toileting program at Sea View helped lower the number of incontinent patients from 79 percent to 38 percent in the last three years.

• December 7- Downtown Express, a community paper in downtown Manhattan wrote that HHC announced a 116 percent increase in HIV tests in the past three fiscal years.

• November 24-December 5- Daily News, El Diario, Hoy, Am-NY, Metro, Amsterdam News, Flatbush Life, Bronx Times Reporter, Harlem News, Caribbean News, Queens Tribune, Queens Courier published the HHC - World AIDS Day commemoration advertisement page by HHC saluting its staff for their commitment and efforts in HIV Testing and Treatment.

• December 10- Modern Healthcare Magazine published an Opinion/Commentary piece written by HHC President Alan Aviles titled "Transparency in Practice". Mr. Aviles described HHC’s decision to make its quality data available publicly and said that by issuing this type of data, staff can be empowered to communicate imperfections in the processes of care.