ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
JUNE 18, 2009

Federal activity around health care reform is very fluid, but I want to keep you informed of some of the key features in proposed legislation that could affect HHC in the near future, as well as in the years to come.

We have been examining proposals from four major federal sources: The Obama Administration; the Health, Education, Labor and Pensions Committee (HELP) chaired by Senator Ted Kennedy (D-Mass); the Senate Finance Committee led by Senator Max Baucus (D-Montana); and the House Energy and Commerce Committee chaired by Henry Waxman (D-California).

Before Wednesday, both houses of Congress had announced plans to mark up health care reform legislation within the next two weeks and then complete floor action in both houses before the end of July. The Senate Finance Committee, however, after receiving a Congressional Budget Office (CBO) score of $1.6 trillion on their bill this week (June 16) postponed their mark up until after the 4th of July recess. The Senate Health, Education, Labor and Pensions (HELP) Committee went forward with their mark up on Wednesday. The House had planned to release their bills and proceed to mark up after the Senate, no doubt wishing to see first what the Senate had included, so now it is unclear whether the House will delay as well.

We understand that a reduction in Medicaid Disproportionate Share Hospital (DSH) funding is being considered by both Congress and the White House as a means to pay, in part, for the additional cost of universal coverage.

This past weekend, the Obama Administration announced additional proposed Medicare and Medicaid cuts totaling $313 billion, as a way, in part, to pay for universal coverage. This $313 billion in savings is in addition to the $632 billion in savings and revenue that the Administration had included in their budget as a means to fund health care reform. The new proposals included $106 billion in cuts over 10 years to Medicaid and Medicare Disproportionate Share Hospital (DSH) funding. The specific proposal is to cut the combined DSH programs by 75% by FY 2019.

Medicaid DSH funding, half of which comes from the federal government, and half of which comes from local match (in HHC’s case, from a City match), accounts for $1.1 billion of HHC's funding in the current fiscal year. HHC also receives $125 million in Medicare DSH. The Administration’s proposal, if implemented, could mean a loss of $800 million in DSH funding to HHC over ten years.

The Senate Finance Committee’s options papers mention several possible modifications to DSH funding, including "federalizing" Medicaid DSH which would remove the state and local match requirement and reducing and/or combining payments for both DSH and Graduate Medical Education. Although the Committee seems to have lost interest in federalizing DSH, the Committee is still considering cutting DSH funding through a trigger mechanism related to increased coverage of uninsured patients, possibly after three years, as a measure to pay for universal coverage.

The House Energy and Commerce Committee, which has jurisdiction over Medicaid, is also working on proposals. The Energy and Commerce Committee is more supportive of DSH than the Senate but has not yet finalized any DSH position. Most are confident that the Energy and Commerce Committee will not cut DSH in the early years but may have a trigger to reduce DSH funding in the out years.

The Ways and Means Committee, chaired by Charlie Rangel, has jurisdiction over Medicare DSH. We are quite confident that Chairman Rangel is championing DSH in negotiations with the other Committees and with Speaker Pelosi.

Earlier this week, Mayor Bloomberg and Council Speaker Christine Quinn announced that they reached an agreement on the Fiscal Year 2010 City Budget. Some of the details of the budget are still being drafted and the Council is expected to vote on the budget tomorrow. At the moment, it appears that the City Council has agreed to restore expense funding to HHC for certain programs that we sought. This includes $5 million for the operation of child health clinics, $2 million for HHC's HIV Testing Expansion and $800,000 for Behavioral Health programs. It is also expected that the Council will restore funds for Speaker Quinn's Primary Care Initiative that will expand services in certain neighborhoods. We also have heard that several HHC facilities will receive Capital funding from their respective Council Members and Borough Delegations. I would like to thank the Mayor, OMB and the Council for their support. I would also like to thank the many community advisory board members, public health advocates and union partners for their advocacy with the City Council.

Sea View Hospital completed a very successful survey by The Joint Commission during the week of May 26th. Very few issues were identified, none of which had direct patient care impact. Most issues identified were easily corrected while the surveyor was still on-site.

The team leader remarked that she was impressed by the meticulous maintenance of the facility, the aesthetic appeal of the public spaces for both residents and family, and the commitment and caring that staff uniformly demonstrated toward the residents.

Angelo Mascia, Executive Director of SeaView and all of his staff are to be commended for strong survey results that reflect excellent care.

Kings County Hospital Center is now the only HHC facility in this year's survey cycle that remains to be surveyed.

This month HHC added a new section to our public reporting of healthcare quality in our “HHC In Focus” web site - Maternity and Infant Care. The public reporting of the performance data from our hospitals in this area is the latest addition to our transparency initiative that shares information with the public on HHC’s quality of care and patient safety performance.

In addition to the new section on Maternity and Infant care, we continue to refresh other statistics on the web site, as new data becomes available. The newly updated statistics in this release include Heart Attack Care, Heart Failure Care, Pneumonia Care, Surgical Infection Prevention, Deep Vein Thrombosis Prevention, and three indicators of care at our long term care facilities -- Preventing Pressure Ulcers, Pain Management, and Preventing Falls.

With the public reporting of these and other quality and safety measures, we continue to demonstrate our willingness to be held accountable for doing all that we can to offer excellent care and to keep our patients safe.

HHC received the 2009 “Builders of the New New York” award presented by the New York Immigration Coalition (NYIC), an umbrella policy and advocacy organization of more than 200 groups in New York State that promotes fairness and opportunity for immigrants and refugees. The award is given to individuals and organizations who share the NYIC's vision for justice, fairness and inclusiveness. HHC was specifically recognized for significant innovations in expanding access to care for immigrants, including our financial assistance policies that provide deeply discounted fees for uninsured people who otherwise could not afford health care, comprehensive communication assistance for limited-English proficient patients, and strictly enforced confidentiality policies that afford new immigrants a sense of security in accessing needed care.

HHC's Board Chair, Dr. Michael A. Stocker was honored with a special award at the June 4th Spring Gala held by the Primary Care Development Corporation (PCDC). Dr. Stocker joined many highly distinguished New Yorkers honored by PCDC in recent years, including Governor David A. Paterson, Mayor Michael R. Bloomberg, and City Council Speaker Christine Quinn. The award honors innovators, champions and advocates who share PCDC's mission of assuring that underserved communities have access to effective, high quality primary health care.

A tentative agreement between the City and the Municipal Labor Council was announced on June 2nd which modifies the New York City Health Benefits Program in ways that will save the City $200 million in FY 2010, $200 million in FY 2011, and $150 million in recurring savings every following year. The agreement will also defer the implementation of planned City layoffs for 90 days. The cost of the layoff deferral will be borne by the union's Health Insurance Stabilization Fund.

As part of the agreement, approximately 60 HHC permanent employees scheduled to be laid off effective June 27th will continue their employment through September 26th. However, approximately thirty provisional employees, who are not covered in the agreement, will be terminated from service on June 27th. The layoff deferral will not affect the previously announced program closures and consolidations, which will proceed as planned.

The agreement also includes the formation of a Labor-Management Health Benefits Subcommittee to explore additional efficiencies and programs and to consider providing health benefits to certain groups of employees, subject to identification of a funding source mutually agreed upon by all parties. A Labor-Management Subcommittee will also meet to confer on issues such as: telecommuting; compressed work schedules; job sharing; unpaid furloughs and other unpaid leaves of absence; and potential employment opportunities for laid-off provisional employees.

In May, HHC honored 59 outstanding nurses from among the 8,000 women and men who provide nursing care each day in city’s public hospitals, long term care centers, and health centers in every borough. HHC nurses work as administrators and educators, as well as providing an array of clinical services across a wide variety of settings. Those honored this year included 13 nurses recognized for their exemplary care of older adults.

On June 2nd the Office of Behavioral Health held a day-long conference titled "Fitting The Pieces Together: Improving Health Outcomes For People With Mental and Substance-Use Conditions." People with a mental illness die 20 to 25 years earlier, on average, than the general population from a chronic disease, and HHC, as one of the largest providers of care for patients with mental illness, can have a substantial impact on reducing premature death. Conference presenters described how obesity, hypertension, smoking and diabetes are prevalent in this population and how, through integrated care and lifestyle changes, this cycle can be broken.

The event also included an awards program recognizing the Best Practices in Behavioral Healthcare. Programs from all HHC hospitals were recognized for a wide variety of clinical and administrative innovations to improve patient safety and care. The highlighted programs are described in the Awardee Booklet, which is included in your packet today.

I want to thank Josephine Bolus from the Board for her participation in the event.

As you know, in 2007 we embarked on Breakthrough, a system of principles and tools based on an improvement philosophy known widely as "Lean." On June 4, we held our first corporate-wide conference for an in-depth review of HHC's Breakthrough activities and successes, and a look ahead at coming challenges. At the event, updated measurements were presented on the accomplishments of Breakthrough projects. As of June 1st, the Breakthrough teams found new revenue of $14.1 million and cost savings of $6.8 million. More than 1,700 HHC employees have participated in Breakthrough events, which have occurred in 10 facilities and central office. More than 30 clinical and administrative value streams have been tackled by Breakthrough teams, including perioperative, emergency room, and inpatient services, as well as revenue cycle, human resources and materials management processes.

At this time of unprecedented pressures on HHC, the Breakthrough initiative continues to provide us with a strong and successful process to reduce waste and achieve clinical and operational efficiencies that are measurable and sustainable.

Jacobi Medical Center hosted its Second Annual Lorraine Tregde Patient Safety Leadership Conference last week, with the theme "Fostering Sustainable Change." More than 250 participants from across the city, including staff and senior leadership from Montefiore Medical Center, St. Francis Hospital, The United Hospital Fund, Greater New York Hospital Association, the National Association of Public Hospitals, White Plains Hospital, Mt. Sinai Hospital, Columbia Presbyterian and Westchester County Medical Center, attended the event. Presentations were made by faculty from many distinguished institutions, including Albert Einstein College of Medicine, Mount Sinai School of Medicine, Montefiore, NYU, and HHC. Topics included the use of technology to make healthcare safer, human factors in fostering safer care, and instilling a culture of safety in medical training programs.

Also last week, the Generations Plus/Northern Manhattan Health Network hosted its Eighth Annual Urban Health Conference, devoted to discussion of the problems addressed daily by clinicians and administrators in our system and other urban safety net institutions, as they seek to provide better access to quality healthcare for communities which have been underserved. The two-day conference opened with CNN Commentator and public policy strategist Paul Begala addressing current political considerations in healthcare. Caya B. Lewis, MPH, director of the Outreach and Public Policy Office of Health Reform at the US Department of Health and Human Services, opened the second day of the conference with a talk discussing the Health Policy Priorities of the Obama Administration. Other speakers focused on key features of healthcare reform envisioned by political leaders and health policy advocates. Seven conference workshops and panel discussions were presented on topics including Engaging Community Leaders on Health Issues, Improving Women's Health in Urban America, and Improving Diversity and Cultural Awareness in the Healthcare Workforce.

On Tuesday June 2, Congresswoman Nydia M. Velazquez presented a check for $380,000 in federal funds from the U.S. Department of Housing and Urban Development (HUD) to Gouverneur Healthcare Services. The funds will support Gouverneur’s Nursing Facility Culture Change program which represents the next generation in long-term care. The Residence at Gouverneur Court will resemble a luxury apartment building and include recreational and dining areas, private rooms and suites and a resident-centered design to foster a sense of community. Funds earmarked by Congresswoman Velazquez will outfit the nursing facility with homelike kitchens, bathing, dining and recreational areas. We thank the Congresswoman for her efforts on our behalf.

On May 30th, more than 1,000 HHC staff members from around the city joined thousands of walkers in Battery Park for the Sixth Annual Asthma Walk, sponsored by the American Lung Association. This was the sixth year the HHC was a flagship sponsor of the event. Even in this year's difficult financial climate our employees, family members and Team Leaders participated enthusiastically in the Asthma Walk. This is one of our city's most serious public health issues, especially for the 18% of New York City children who suffer from asthma. Thanks once again to our caring HHC employees, who not only provide compassionate care for sufferers of lung disease, but devote their own time to events like this.

Nine HHC hospitals held special outreach events during the month of May, and more than 900 women made appointments to get mammograms in our facilities throughout the month. New York City Council Speaker Christine Quinn supported the campaign by visiting Bellevue to get her mammogram, praising the outstanding breast health care available at HHC hospitals. Ms. Quinn's own mother died of breast cancer, and she is a vigorous proponent of early detection and treatment to save lives. HHC also partnered with the American Cancer Society as well as media partners FOX 5 and the New York Post to get the word out.

HHC Patient Safety Campaign has won the 2009 Gold Aster Award for Best Total Advertising Campaign. The campaign will be featured in an article in Marketing Healthcare Today, a magazine that is affiliated with the Aster Awards.

• The North Bronx Healthcare Network has been awarded a Gold Award of Excellence from the International Academy of the Visual Arts for their community publication "A Conversation with Bill Walsh - The Lean Campaign." The award is the highest level of recognition given as part of the 2009 Communicator Awards competition.
• Georgina R. Howard, RN, Nursing Supervisor at Queens Hospital Center, was selected to be part of the nationwide panel of nursing experts who advise the National Council of State Boards of Nursing, as it develops its national examination to determine basic nursing competence. All candidates are required to pass the exam to receive a nursing license.

• One-On-One with NYCHHC President and CEO Alan Aviles, Healthcare Informatics, 6/09
• The 10 Most Influential Nuyoricans, New York Post, 6/10/09
• City Council bills would ban candy-flavored tobacco and smoking outside of hospitals, New York Daily News, 5/22/09
• Jacobi Hosts Trauma Event, Bronx Times Reporter, 5/28/09
• Hospital Profile: Elmhurst Hospital, Times Ledger, 5/22/09
• Hospital Profile: Queens Hospital Center, Times Ledger, 5/22/09
• Campaña de examen de VIH en El Bronx, El Diario, 6/5/09
• Ribbon snipped for senior housing on Staten Island, Staten Island Advance, 6/10/09
• By the numbers: Health systems with largest number of full-time employees , Modern Healthcare, 5/25/09