ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
May 22, 2008

The Joint Commission conducted its four-day survey of Harlem Hospital Center from May 13-16. The five surveyors conducted randomly selected patient "tracers" to assess all aspects of care rendered to specific patients in inpatient, outpatient and off-site settings across the organization. They also interviewed staff extensively and reviewed policies and procedures, medical records and other relevant documents. I join our Chairperson in thanking Reverend Diane Lacey for her participation in the Leadership Session held early on Friday morning.

At the conclusion of the survey, the survey team praised Harlem's leadership and front-line personnel. The surveyors told several hundred assembled staff that "HHC should be very proud of the work you do." And needless to say, we are. Congratulations to Jose Sanchez, John Palmer, the network’s senior team, and all of the leadership and staff of Harlem Hospital Center for their successful survey performance.

Harlem joins Bellevue and Queens, which both passed their surveys with flying colors earlier this year. Coler-Goldwater, North Central Bronx Hospital and Woodhull remain to be surveyed by the Joint Commission in 2008.

Numerous modernization projects are proceeding on schedule, and I want to share with the Board the status of the most significant on-going work, as we continue to re-build or renovate important parts of HHC’s physical infrastructure.

At Jacobi Medical Center, the new 125,000-square-foot Ambulatory Care Pavilion is substantially complete. Occupancy is scheduled for this summer, pending New York State Department of Health approval.

Kings County Hospital Center's new Behavioral Healthcare Center is 90% complete. The new pavilion will house behavioral health emergency care services, 230 inpatient beds, and behavioral health ambulatory care and day treatment services. Construction is scheduled to be completed by the end of 2008.

At Harlem Hospital Center, the campus-wide modernization project, including the new pavilion on Lenox Avenue and the renovation of the existing Martin Luther King Pavilion, is scheduled to be completed in 2011. Work continues to relocate services housed in buildings scheduled for demolition. A new underground tunnel that will connect major elements of the campus is substantially complete. The last of the historic murals slated for restoration is being prepared for removal and will be in storage by September.

Construction of Lincoln Medical and Mental Health Center’s new medical ambulatory care annex is proceeding, with completion of interior construction scheduled for this summer. Upon occupancy of the new annex, the renovation and expansion of the existing Emergency Department will commence.

A Chronic Disease Forum was held yesterday to assess our progress to date in improving the management of chronic disease, with a focus on diabetes, hypertension, congestive heart failure and depression. Clinical teams shared their results to date and discussed best practices and approaches to supporting more effective patient self-management. The optimal use of our electronic diabetes registry and our evolving standardized treatment protocols for diabetes were also topics of discussion. HHC has set goals for dramatic improvement in the blood sugar, blood pressure and cholesterol levels of its patients with diabetes by the end of 2009, and will post its progress toward those goals on its public Web site going forward.

As Marlene Zurack and I have previously briefed the Board, HHC continues on a course toward auction rate bond conversion. Keeping you up to date, the Swiss bank UBS this month announced the sale of its municipal division (which was formerly known as Paine Webber), which is HHC's current lead bond underwriter.

HHC is currently in conversations with the division to assess how this transaction might affect HHC's future bond conversion. In the event that HHC's needs cannot be accommodated, we have a team of underwriters that could step in. The Finance Committee will be briefed at the June 12, 2008 meeting on the status of the auction rate bonds and the conversion process.

As many of you know, Mayor Bloomberg released the FY 2009 Executive Budget on May 1. The $59.1 billion spending plan proposes to limit spending increases to less than 1%, use savings to pay down gaps in FY 2009 and FY 2010, and extend Capital plan commitments over an additional year from four years to five years to achieve annual savings of 20%. The City Council began agency budget hearings yesterday and these will continue for the rest of May. HHC is scheduled to testify on the capital budget before the Council Health and Finance Committees on May 27 and for the first time in many years we have been invited to present budget testimony later that same day before the Committee on Mental Health, Mental Retardation, Alcoholism, Drug Abuse and Disability Services.

At the end of last month, the City Council Committee on Mental Health, Mental Retardation, Alcoholism, Drug Abuse and Disability Services held an oversight hearing on the effectiveness and use of buprenorphine in New York City. HHC and DOHMH were invited to testify. Joyce Wale, Senior Assistant Vice President for Behavioral Health, testified for HHC and gave an overview of the treatment options we offer for opioid dependency, the buprenorphine initiatives that HHC has undertaken, and our assessment of buprenorphine as one of a number of medication-assisted treatment options. HHC began to offer buprenorphine as an alternative to methadone in 2003 with two pilot programs and expanded its use in 2005 to eight outpatient clinics. Today, all of HHC's outpatient chemical dependency programs offer buprenorphine and we have found it to be a viable treatment option for a growing number of HHC patients with opioid dependency.

Last week, the House passed the Fiscal Year 2008 supplemental appropriations bill to fund the wars in Iraq and Afghanistan and to address domestic spending priorities. The House-passed bill includes moratoria until April 1, 2009 on seven Medicaid rules, including three that are of most concern to HHC and others in the hospital community: the public provider cost limit, graduate medical education and outpatient rules. These three rules, if implemented, could cost HHC $500 million in reduced federal Medicaid funding each year.

In the Senate, the domestic spending portion of the supplemental war appropriations bill passed earlier this afternoon by a vote of 75-22. Thus, the bill pending in the Senate contains the moratoria on all seven Medicaid rules. Sixty votes will be needed to defeat various additional procedural challenges to this legislation.

In an effort to both head off a defeat in the courts (which is expected to require CMS to re-issue the public provider cost limit and GME rules) and to offer a safe harbor to those who might hesitate providing the 60 votes needed to turn back these procedural challenges, the Administration last night officially announced that they would voluntarily extend the moratoria on the two hospital-related regulations until August 1.

In addition, while there remains strong bipartisan support for the moratoria, the President has issued veto threats on both the House and Senate war supplemental funding bills, objecting to provisions concerning the Iraq war and other items including the Medicaid moratoria. The Administration issued a similar veto threat, however, on the original moratorium when it was in the fiscal year 2007 supplemental bill which was later signed into law with the moratorium language included. This complicated legislative process will likely extend past the current moratorium expiration date of May 25.

The Staten Island Immigrants' Council and Staten Island Borough President James Molinaro recognized HHC for our efforts to make health care more accessible in the borough.

LaRay Brown and Joanna Omi joined me in accepting, on behalf of HHC, the John Lavelle Memorial Award for Outstanding Contribution to the Immigrant Communities of Staten Island. HHC's assistance with the development of the Community Health Center of Richmond (CHCR) and implementation of the Staten Island Health Access Program were cited as important contributions to improving immigrants' access to health care services.

John Lavelle was a New York State Assemblyman and Chairman of the Staten Island Democratic Party, whose commitment to improving the lives of low-income Staten Island residents was steadfast and widely known. He had also served as Chairman of the Community Advisory Board of Sea View. His untimely death at age 57 was mourned throughout Staten Island and New York State.

At the 2008 Nursing Excellence Program, which was held last week at Elmhurst Hospital Center, we saluted the extraordinary nursing professionals from our facilities for their exceptional service.

HHC nurses have been leaders in our system-wide initiatives to improve patient safety, enhance chronic disease management and reduce the health disparities that affect many of the communities we serve. They have been on the front lines of preventing hospital acquired infections through their meticulous attention to protocols that have been shown to reduce or eliminate central line infections and ventilator acquired pneumonia. They are leading players in our system-wide effort to reduce cardiac arrests by calling on rapid response teams to intervene when their patients show early signs of decline. And, of course, they are instrumental in avoiding medication errors by their careful adherence to procedures that ensure the five "rights" of medication administration are upheld -- that the right patient receives the right medication, right dosage, at the right time, by the right route.

The theme chosen this year by The American Nurses Association was particularly appropriate -- Nurses: Making a Difference Every Day. This certainly describes the over 7,000 dedicated women and men who provide excellent nursing care in our hospitals, medical centers and nursing homes every day.

HHC staff continues to be acknowledged by professional colleagues for outstanding achievements.

• Jean Leon, Network SVP and Executive Director of Kings County Hospital Center, and Marie Anker, HHC Assistant Vice President for Nursing, were honored last night at The Brooklyn Nurse Partnership's annual gala for their contributions to the nursing profession. The Brooklyn Nursing Partnership is a unique collaboration of hospitals, academic institutions, nursing education programs and health care policy groups. The partnership was formed in 2004 under the leadership of the Brooklyn Borough President's Office to unite these groups to begin to solve the nursing shortage collaboratively. Congratulations to both Jean and Marie for this well-deserved honor.

• Moftia Aujero, RN, Deputy Executive Director of Nursing and Patient Care Services at Bellevue Hospital Center, was chosen from hundreds of nominations to be featured as a regional finalist in the May edition of Nursing Spectrum magazine for Excellence in Advancing and Leading the Profession. Ms. Aujero was acknowledged for helping staff members better respond to patient needs and for improving collaboration. She was also praised as a role model and change agent at Bellevue.

• Alina Moran, HHC Senior Director of Managed Care Contracting and Operations, was among 22 women selected from across the nation to participate in the National Hispana Leadership Institute's (NHLI) 2008 Executive Leadership Forum. The program includes training at the John F. Kennedy School of Government at Harvard University and at the Center for Creative Leadership. This is an honor both for HHC and Ms. Moran.

The seventh annual Urban Health Conference will be held June 12 and 13, hosted by HHC's Generations Plus Northern Manhattan Health Network, which includes Lincoln, Harlem and Metropolitan hospitals. The conference focuses on strategies to reduce the health disparities that continue to plague the communities served by HHC. This year the forum will have a dramatic kickoff on Thursday evening, when Tony-Award winning actress Sarah Jones performs her one-woman show, titled "A Right to Care," about the healthcare challenges faced by new immigrants and communities of color. On Friday, we will be honoring Dr. Frieden with an award for his extraordinary leadership and collaboration with HHC in championing public health initiatives that improve the health of all New Yorkers while also addressing healthcare disparities in the diverse, low-income communities of our City. The keynote speaker on Friday will be Dr. Ayman El-Mohandes, Chairman of the Department of Prevention and Community Health at the George Washington University Medical Center School of Public Health. Workshops will cover a wide range of patient safety topics, as well as issues such as the looming nursing shortage.

On our agenda today is an affiliation contract renewal for your review and approval. This Agreement with New York University School of Medicine ("NYUSOM") is for the provision of general care and behavioral health services at Bellevue Hospital Center and Gouverneur Healthcare Services. The agreement is a three-year contract commencing July 1, 2008 and terminating on June 30, 2011 for a total cost of $335 million.

The proposed agreement will compensate NYUSOM based on relative value units and fixed costs for services at Bellevue, and fixed costs for services provided at Gouverneur. The parties propose to add pay-for-performance incentives keyed to improvement in aspects of regulatory compliance, Centers for Medicare and Medicaid Services (CMS) quality indicators, and facility-specific quality and efficiency indicators.

The agreement builds on a long-standing clinical and academic relationship that benefits patient care and I urge your approval.

• Wheelchair Charities President and founder "Hank" Carter hosted the 21st Annual Wheelchair Charities Dinner to benefit Coler-Goldwater Specialty Hospital on May 8th. Guests included patients and residents from Coler-Goldwater, legends in sports, media, business, politics, medicine and more. The event was attended by 600 guests and raised $750,000 to improve the quality of life of the patients and residents at Coler-Goldwater. The funds will be used to purchase wheelchairs which have special adaptations that give disabled patients and residents more independence and mobility, buses customized to accommodate wheelchair-bound travelers, electric beds, state-of-the-art speech rehabilitation equipment, and the continued development of the Computer Lab, which helps Coler-Goldwater residents to become more engaged members of society, regardless of disability.

• The HHC Foundation held its fourth annual Breakfast Benefit yesterday to honor outstanding innovators, whose contributions have benefited our patients. Doug E. Fresh received the Social Innovator Award for his creative use of hip hop music to teach children how to recognize the signs of stroke and intervene to save the lives of their loved ones. Dr. Max Gomez, Medical Reporter for WCBS-TV, was given the Excellence in Healthcare Reporting Award, for his coverage of critical health issues and some of HHC's healthcare innovations, like the Asthma Buddy. Brandon Steiner, Founder and Chairman of Steiner Sports Marketing received the Humanitarian Award for his philanthropic work. Money raised at the event will fund healthcare programs to benefit patients throughout HHC.

• May 14-19 – The New York Times, New York Sun, Wall Street Journal, Associated Press, Newsday, Metro NY, amNY, WNYC Radio, NY1, and Night Edition News 12 Bronx TV all reported on the reduced infection rates in HHC’s 11 hospitals. HHC announced that hospital acquired infections have dropped dramatically since 2005 as part of its larger patient safety program to reduce preventable deaths and unnecessary hospital stays. Between 2005 and 2007 the hospitals achieved a 55% decrease in central line bloodstream infections and a 78% drop of ventilator-associated pneumonia among adult patients in intensive care units. HHC President Alan D. Aviles shared that "our aggressive focus on evidence-based prevention practices is helping us get closer to our goal of eradicating such infections from the intensive care units in our public hospitals." The new statistics were published on HHC’s Web site in an ongoing effort to voluntarily share information on hospital quality and safety with the public.

• May 15 - The New York Times, NY Daily News, NY Post, New York Sun, and the Bond Buyer all reported that HHC could potentially lose $390 million a year in state and federal funding for the training of doctors. The cuts are part of changes to the Medicaid program backed by the Bush administration. HHC President Alan Aviles noted if these regulations are allowed to go into effect, the damage to both aspects of HHC’s mission would be devastating.