ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
April 30, 2008

Today, as part of our corporate Transparency Initiative, we have updated the HHC In Focus web site, a key component of our Transparency Initiative, posting data, for the first time, on our performance in disease prevention and chronic disease management services. The prevention statistics include the number of mammograms and colonoscopies done, flu immunizations given, patients enrolled in smoking cessation programs and their quit rates. The chronic disease management figures include outcome statistics for asthma and diabetes treatment.

We also have added new patient safety data that reflects how well we follow evidence-based practices related to the risk assessment and prevention of deep vein thrombosis in hospitalized patients.

In addition, we have updated the information we posted in September, showing our record on certain key performance measures of hospital quality and safety. I am especially pleased that our rates of hospital-acquired infections have dropped dramatically over the last 2 years achieving a 55% reduction in the rate of central line infections and a 78% reduction in the rate of ventilator-associated pneumonia in our adult intensive care units.

On April 22nd, the Division of Patient Safety sponsored HHC's third annual Patient Safety and Quality Exposition, hosted by Coler-Goldwater. Staff of each HHC facility, Health and Home Care, and Central Office Divisions of Medical and Professional Affairs, and Corporate Planning, presented poster/storyboards of patient safety or quality of care success stories. Board members John R. Maese, MD, David A. Rosin, MD and Josephine Bolus, RN/CNP, together with Arnold Saperstein, MD, Executive Director of our Metroplus HealthPlan, served as judges for the event which was attended by over 500 HHC facility staff and Community Advisory Board members.

This year's Grand Prize winner is Kings County Hospital Center for its impressive "Multi-Interventional Strategy To Reduce Hospital-Acquired Deep Vein Thrombosis."

There were separate First Prize awards in each of three categories of patient care. For Community Based Services, the award went to HHC Health and Home Care for its successful work on “Improving the Management of Oral Medications in Home Care Patients.” For Long Term Care Services, Coler-Goldwater Specialty Hospital and Nursing Facility took the prize for its initiative on "Reducing Ventilator-Associated Pneumonia (VAP) with the Application of a Long Term Care Bundle." The award for Hospital-Based Services went to Lincoln Medical and Mental Health Services for its pioneering work on "Decreasing Mortality in Severe Sepsis and Septic Shock in the Medical ICU Through a Multi-Disciplinary Approach."

Congratulations to all winners, to every facility and indeed to every entry. The range of accomplishments represented at this fair makes it clear that HHC is moving steadily toward its goal of becoming one of the safest healthcare systems in the country by 2010.

Both Queens and Bellevue Hospitals were recently surveyed by The Joint Commission. Queens Hospital underwent a five-day survey with five surveyors and Bellevue a five-day survey with six surveyors. Both facilities performed extremely well and have been awarded full accreditation. Congratulations to both Tony Martin and Lynda Curtis and their staffs for jobs well done. Coler-Goldwater, Harlem, North Central Bronx, and Woodhull Hospitals remain to be surveyed by the Joint Commission in 2008.

Shortly after our last Board Meeting in late March, the Governor and State Legislature came to an agreement on the healthcare sections of the budget. Although HHC will be receiving about $14 million less in Medicaid reimbursement, we are pleased with the direction this budget takes, in particular, shifting funding towards ambulatory care and a unique program -- Doctors Across New York -- which will provide increased reimbursement, loan repayments and other incentives for healthcare providers to expand to underserved areas.

The proposal to rebase hospital inpatient rates to 2005 costs was postponed for one year to allow further analysis and refinement. HHC will be participating in the technical advisory group being formed to work on this issue over the next several months.

To fund initial investments in primary care, inpatient reimbursement will be reduced by $51 million, while $56 million in investments will be made to outpatient rates, conditional on CMS approval. $25 million will go to clinic increases, $23 million to hospital ambulatory surgery increases, and $8 million to emergency room rate increases. The budget also includes $45 million for rate increases for physicians, diagnostic and treatment centers, and primary care initiatives.

The legislature agreed to fully fund the Governor’s proposal to expand the eligibility levels of the Child Health Plus Program from 250% to 400% of the Federal Poverty Level. Additionally, a new State Medicaid Enrollment Center will be created to streamline the enrollment and renewal process for public health insurance programs.

Last Wednesday, April 23rd, the House of Representatives, by a vote of 349 to 62, adopted moratoria until April 1, 2009 on seven onerous Medicaid regulations. Three of those rules, the public provider cost limit rule, the elimination of Medicaid payments for Graduate Medical Education (GME) and severe cuts in reimbursement for outpatient services, would have a very dramatic negative impact on HHC – putting at risk over $500 million annually.

This was an encouraging vote in the House but our fight is not over. The Administration has threatened to veto these moratoria and the Senate is divided on the issue. Senator Baucus (D-TX), Chairman of the Senate Finance Committee, has said that the Senate may attach the moratoria to the supplemental funding for Iraq in an effort to overcome the veto threat. HHC has been instrumental in organizing a large coalition of associations and unions to oppose these rules. We will also continue to work with our partners in HANYS and GNYHA to build greater support in the Senate.

On April 23rd I attended an inspiring program sponsored by the Commission On the Public's Health System, a local public health advocacy organization that has been extremely supportive of HHC and a staunch advocate for the rights of all New Yorkers to accessible, quality healthcare. The occasion was the granting of the Marshall England Memorial Public Health Awards, an award named for a man who had served on the Council of Municipal Hospitals Community Advisory Board and the Harlem Hospital Community Advisory Board. Gladys Dixon, the Chairperson of the Council of Municipal Hospitals Community Advisory Boards, received an award for her outstanding community leadership, and Barry Liebowitz was recognized for his leadership of Doctor's Council. I was also honored on the same program - which really reflected a tribute to our senior leaders across the organization. CPHS has been a tireless champion of the right of all New Yorkers to access quality healthcare, regardless of ability to pay or immigration status and we are grateful for the organization's supportive advocacy and its recognition of our work in recent years.

In recognition of National Doctors' Day, March 30, HHC honored 22 of its remarkable doctors for their commitment to advancing the mission of our public hospital system.

Arnold Saperstein, M.D., Executive Director of MetroPlus Health Plan, received the President’s Award for Outstanding Service, in recognition of his extraordinary leadership. Doctors' Day Awards were also presented to 21 other gifted physicians across our system.

These individuals reflect the diversity of the population they serve and exemplify the expertise, compassion and collaborative spirit that are helping to drive performance improvements across our system.

Each year we recognize National Volunteer Week by honoring a select group of individuals at HHC’s Annual Volunteer Recognition Ceremony. This year's ceremony, which was held yesterday at Bellevue Hospital, honored 33 volunteers who represent the more than 8,000 men and women who dedicate nearly one million hours of service to the city’s public hospitals each year.

This year, two individuals received our highest volunteer recognition, HHC's Volunteer of the Year. Deborah Freundlich was selected for both her commitment to, and exceptional fundraising efforts for, Bellevue’s Reach Out and Read Program where she has volunteered since 2001. John Walz, of Sea View Hospital Rehabilitation Center, was honored for his eight years of service to the Pastoral Care Department.

On April 28th, the United Hospital Fund held its annual Tribute to Hospital Trustees. At the event, our Board Chair Charlynn Goins was recognized with the 2008 Distinguished Trustee Award for her extraordinary stewardship over the last four years. I know that all of HHC’s senior staff -- many of whom were present for the award ceremony -- will agree that this recognition is well-deserved and we are grateful for her thoughtful leadership and unwavering support.

Once again, during the month of May, as New Yorkers are celebrating Mother's Day, HHC is reaching out to inform women over 40 about the life-saving benefits of getting an annual mammogram. The campaign was launched this week and will reach millions of New Yorkers, generating more than 31 million impressions through broadcast and print ads. Radio ads in English and Spanish will run on WBLS, WLIB, WPAT and WSKQ, HHC doctors will speak on radio programs about the importance of mammograms, and radio vans will make appearances at select HHC locations. Television ads will appear on WABC, Univision and Telefutura, with both WABC and Univision running internet promotions on their high-volume web sites. WABC personalities Lori Stokes and Nina Pineda, and Daneida Polanco from Univision will provide on-air announcements promoting HHC mammography services during the month. Posters with the life-saving mammography message will be on display in strategic locations at HHC facilities. Advertisements on the Staten Island Ferry and newspaper ads in the Staten Island Advance will inform New Yorkers about mammography van visits provided by the Women's Outreach Network during May at multiple locations on Staten Island.

This year, select HHC staff members went above and beyond the call of duty to help raise awareness of the importance of early detection by volunteering to be part of our print and broadcast advertising campaign. Thanks to their participation, we were able to showcase their diversity and enthusiasm, which you will see, as we now show you the English and Spanish television ad, as well as the 15-second celebrity promotions on WABC and Univision.

This year, HHC will be observing Cover The Uninsured Week, as HHC facilities, our partners and our managed care plan MetroPlus sponsor community health fairs and insurance enrollment events throughout the city from April 26 to May 3rd. Events will be held to provide health screenings and enrollment of children and adults in government-sponsored health insurance programs for which they qualify. HHC Options will also be featured during the week, offering affordable healthcare to the estimated 1 million New Yorkers who have no health insurance.

HHC's colon cancer public awareness campaign during March was a great success this year, with total 311 calls to HHC during the month increasing 18% over last year's total, and 311 callers who asked specifically about colon cancer during the month increasing 190% over last year. "Subway hero" Wesley Autrey once again served as HHC's spokesperson for the campaign, appealing to New Yorkers to get checked for colon cancer with his now famous slogan, "It's Just What You Do."

On March 12th the Healthcare Association of New York State featured Kings County Hospital Center's Wellness Center, in its weekly case study fax that is sent to members of the State Legislature. KCHC's Wellness Center provides patients with free supervised programs of exercise training. The center targets diabetics and patients with insulin-resistance syndrome, as well as overweight and obese adolescents.

• Lincoln Medical and Mental Health Center received a $325,000 grant from the state Health Department to enhance services of the South Bronx Health Living Partnership, to screen adults for breast, cervical and colorectal cancers and to do related education.

• Lincoln also received congressional funding of $219,000 from Congressman Jose Serrano to be used toward the purchase of a new Fetal Monitoring System.

• The Interboro Regional Health Information Organization, led by Elmhurst Hospital, received a $7.7 million grant to be used in building a health information technology infrastructure in Queens and parts of Brooklyn.

• Woodhull was one of three recipients in New York State to be awarded a grant to develop a Latina Adolescent Suicide Prevention program, to raise awareness of the issue and increase access to culturally appropriate community mental health providers.

On our agenda today, is an Affiliation contract renewal for your review and approval. The Agreement with New York Medical College is for the provision of general care and behavioral health services at Metropolitan Hospital Center and Morrisania Diagnostic and Treatment Center, and general care services at Lincoln Medical and Mental Health Center and Segundo Ruiz Belvis Diagnostic and Treatment Center. The agreement is a three-year contract commencing July 1, 2008 and terminating on June 30, 2011, at the total cost of $183,270,000.

The proposed agreement will compensate New York Medical College based on costs, not to exceed departmental spending limits. It builds on a long-standing clinical and academic relationship that benefits patient care and ensures patient safety. The agreement also includes financial incentives that are designed to align business goals and improve overall hospital performance, address market changes and meet community needs. These pay-for-performance standards will assess improvement in areas of regulatory compliance, satisfaction of Centers for Medicare and Medicaid Services (CMS) indicators, and facility-specific quality and efficiency indicators.

We were saddened and stunned by the sudden death of Gloria Jeanne Bynoe Thomas last week at Metropolitan Hospital Center at age 59. Ms. Thomas will be forever linked with the Harlem community that she devoted her life's work to serving. Her leadership and ability to build coalitions among the community stakeholders, including healthcare providers, community representatives, consumers and elected officials significantly benefited HHC. In her capacity as Chair of the Harlem Hospital Center Community Advisory Board, she promoted strong and lasting alliances between the hospital and the community it serves. Her effective stewardship as Chair and President of the Friends of Harlem Hospital Center helped to support and enhance the Hospital’s programs and services.

Gloria Thomas was an extraordinary person who made a lasting difference. She will be missed.

• March 30 – The NY Daily News reported on OraSure Technologies' donation of thousands of HIV Rapid Tests to HHC. Speaker Christine Quinn was joined by representatives from OraSure Technologies, Rev. Calvin Butts, and Sr. Vice President Laray Brown at a press conference held at Harlem Hospital Center to make the announcement.

• April 23 & 24 – The New York Daily News, The New York Sun, Newsday, NY1, Fox 5, Channels 9, and 11 reported on HHC's Neonatal Intensive Care Unit Redesign and Developmental Care Initiative. HHC President Alan Aviles made the announcement about the system-wide environmental and programmatic improvements at a press conference held at Queens Hospital Center on April 23rd. Noting the increase in high-risk pregnancies and premature births, President Aviles said HHC wants to improve the quality of care and health outcomes of the littlest New Yorkers by dramatically reducing stressful external stimulation and nurturing them as if they never left their mother’s womb prematurely.

• April 27 – The Jerusalem Post published an article on Israel’s first cultural competency conference hosted by Alyn Hospital in Jerusalem last month where Coney Island Hospital’s Brian Palmer, AED, presented Coney Island’s extensive efforts to provide culturally sensitive care to the hospital’s immigrant populations. Mr. Palmer noted that Coney Island celebrates diversity, and has a better hospital as a result.