ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
OCTOBER 29, 2009

Last week Governor Paterson and Health Commissioner Daines suspended the emergency regulation that required all health care workers to get vaccinated for the flu -- both the seasonal flu and the new H1N1 flu. In announcing this decision, Commissioner Daines cited concerns about the national shortage of vaccine supply and need to balance the imperative of vaccinating healthcare workers with the need to make vaccine available to high risk patients. The state has no plans to reinstate the emergency regulation this flu season, but will issue for public comment a similar regulation to take effect for next flu season.

We have been offering seasonal flu vaccine since September through our Employee Health Services. Since mid-October we have been providing it as part of our annual "blitz" during which we administer the vaccine to workers in the workplace on every shift, 24/7. The state requirement did have a positive result at HHC in that more than 70 percent of our employees have already received the seasonal flu vaccine, which is a big increase over the entire flu season last year (when 50 percent got a flu shot) and way above the national average in recent years.

We have also been providing vaccinations to our patients at all pediatric and primary care clinics across HHC. To help increase access to free or low cost vaccinations to New Yorkers who are not our patients and who may not have a regular doctor, HHC also opened 11 Fast Track Flu Shot Centers last week where we are providing seasonal and whatever limited H1N1 supplies we have available. The centers, which are open during evening and weekend hours, are located throughout the five boroughs. In addition to the 11 locations, our Mobile Medical Office on Staten Island is also offering free vaccines in five different Staten Island communities.

Thankfully, flu activity across our City continues to be modest, unlike other parts of the country where significant outbreaks have occurred. We are tracking the data from our emergency departments carefully and are fully prepared to respond in the event of a surge in flu-related patient volume.

BREAKTHROUGH ACHIEVEMENTS FEATURED AT NATIONAL CONFERENCE

Earlier this month HHC hosted a symposium sponsored by our Breakthrough partners, Simpler Consulting. About 50 senior leaders representing health care organizations from across the US and Canada came together at Bellevue for a day and half to learn from improvement experts and to hear about the issues we face as we implement the performance improvement method, known widely as "lean," in our various institutions.

Jacobi, Metropolitan and Woodhull were featured through slideshow presentations that displayed some of their successful projects, covering a wide range of areas from improving patient flow in the operating room to better inventory management. Bellevue showcased its Breakthrough "mission control room," or obeya, where status of all the current work was displayed visually in charts, graphs, and tables, showing what is expected and the progress toward goals.

The praise for HHC as a whole, was overwhelming and quite rewarding. We were reassured by the impressions of attendees from across the country who are implementing “lean” in their own organizations -- that the first few years are very challenging, that our rollout is one of the largest in the country and that we are doing the things we need to do to make this transformative work successful and sustained.

HHC CONTINUES TO EXPAND PALLIATIVE CARE SERVICES, OBSERVES NATIONAL PALLIATIVE CARE MONTH

The Palliative Care Initiative, a program that has been expanding in our facilities since its introduction in 2006, now has physician-led interdisciplinary teams in all of HHC's 11 hospitals. In the last two fiscal years, palliative care teams have served more than 10,000 HHC patients and their families. Financial support for the program has come from grants from New York State, the United Hospital Fund, the HHC Foundation, and private foundations.

November is National Hospice and Palliative Care Month and several corporate-wide and local observances have been planned. On November 9th a Grand Rounds webinar presentation will be "broadcast" from Metropolitan to an estimated 800 physicians, nurses, social workers, chaplains, ethicists and others at the hospitals and long term care facilities. The webinar will address issues that arise when a treatment option has both a positive and negative effect on the patient. Later in the month, on November 19th, a senior leadership conference will be held at Draper Hall. On the conference agenda will be a panel discussion to look at the state of palliative care, particularly as it affects the elderly, throughout the City of New York. In addition to HHC specialists and other national experts, representatives from several City agencies are expected to be part of the discussion.

At various times throughout the month, local facilities have also planned observances in the form of special memorial services for surviving members of the palliative care patients' families, as well as for staff, who have cared for critically ill patients. Other community education events and presentations are also planned throughout the month.

JOINT COMMISSION SUMMARY OF HHC FACILITY SURVEY RESULTS

The Joint Commission (TJC) multi-facility survey of HHC concluded on October 6th when the Survey Team Leader, Suzanne G. Brauer, RN, returned to HHC to share with members of the Board of Directors and Senior Leadership the survey results. She discussed comparative data in other hospitals, based on surveys conducted across the nation, some of the best practices that were identified across HHC, and some opportunities for improvement. This year, Coney Island Hospital, Kings County Hospital Center, Lincoln Medical and Mental Health Center, Sea View Hospital Rehabilitation Center and Home, and nine HHC Opioid Treatment Programs were surveyed. Ann Scott Blouin, RN, Ph.D., Executive Vice President of Accreditation and Certification Operations at The Joint Commission, also attended the Summation and spoke about TJC's new vision, mission, and future directions.

We were very pleased with the positive Corporate report which included the Survey Team Leader's assessment that she "has not seen, as a group, facilities so committed to improving quality as this System." Congratulations, once again, to Antonio Martin, Angelo Mascia, Arthur Wagner and Jose Sanchez and their staff on their excellent survey performance.

Elmhurst, Metropolitan, Queens, Gouverneur and McKinney are scheduled to be surveyed in 2010.

SENIOR LEADERSHIP FORUM ON MEDICATION SAFETY

On October 22 Corporate Patient Safety convened a Senior Leadership Forum on Medication Safety. The Forum was held at Woodhull Medical and Mental Health Center and nearly 160 senior clinical and administrative leaders participated. The Forum was specifically convened during National Hospital and Health System Pharmacy Week, October 18 - 24, 2009, the week when we acknowledge the invaluable contributions of pharmacists and technicians to the provision of safe, high quality patient care. HHC's Pharmacy staff safely processed over 9 million medication orders in 2008 in addition to providing guidance and advice to physicians, nurses, and most importantly, our patients and their families.

The program included a presentation and discussion of medication error and intervention trends across HHC, followed by a panel of HHC clinicians who discussed medication safety challenges and best practices across the continuum of care. It closed with a discussion of innovations at HHC that have contributed to medication and patient safety.

HHC Pharmacy staff sponsored medication safety activities during National Hospital and Health System Pharmacy Week. For example, Lincoln, Harlem, and Elmhurst hospitals held “Brown Bag Day” for patients, where patients were encouraged to bring in all of their medications. Pharmacy staff sat with each patient to review and discuss their medications, provided educational materials and, most importantly, an opportunity for patients to ask questions. Harlem Hospital also sponsored an “Aging Successfully” program where the pharmacy staff discussed common diseases and medications with seniors.

Medication safety is a critically important component of patient safety and has received national attention over the last few years due to several high profile incidents. The Institute of Medicine (IOM) has reported that each year, at least 1.5 million Americans are harmed by a medication error. Through our patient safety program, HHC is striving to assure that no patient is harmed by a medication error.

HHC CHIEF MEDICAL OFFICER ADDRESSES STATE ASSEMBLY AND SENATE
ON HHC PATIENT SAFETY ACHIEVEMENTS

Dr. Ramanathan Raju testified earlier this month before the State Assembly and Senate Health Committees on HHC's efforts to put in place some of the most advanced patient safety programs of any healthcare system in the nation. Dr. Raju also highlighted our Quality Assurance oversight activities and the frequency with which our facilities come before the Quality Assurance Committee of our Board of Directors. The Health Committees also heard from, among others, the New York State Department of Health, GNYHA and HANYS, who reviewed hospital incident reporting via the New York Patient Occurrence and Tracking System. Testimony included recommendations on how to make improvements to this system, other reporting systems and state and nation-wide patient safety efforts.

HHC SHOWS STRONG INCREASE ON DEPRESSION SCREENING DAY

On Thursday October 8th, nearly 1,400 people were screened for depression at 15 HHC sites, as part of National Depression Screening Day, an increase of 43% over last year. Nearly 3,400 people participated, receiving educational literature and resource information. Additionally, staff from across our behavioral health facilities provided crisis Intervention services for 26 people and made 480 follow-up appointments. This year, for the first time our office partnered with HHC Corporate Planning and HIV Services to provide rapid HIV testing on-site at the Central Office along with our National Depression Screening Day initiative, yielding 47 completed rapid HIV tests, with one person testing positive. HHC has made depression screening an increasing important part of primary care, particularly for our diabetic patients, who suffer disproportionately from depression, and for whom successful treatment of depression is a key factor in effective disease management.

FEDERAL HEALTHCARE REFORM UPDATE

Healthcare reform continues to be the major focus of both Houses of Congress. This morning the House Leadership unveiled its version of Health Care Reform melded from the work already done by the three Committees with jurisdiction -- Ways and Means, Energy and Commerce and Education and Labor. Key features include expanding Medicaid to persons earning up to 150% of the Federal Poverty Level (FPL), including a negotiated rate Public Option. The bill is projected to provide insurance coverage for between 35 and 36 million persons, leaving about 18 million persons uninsured.

On Tuesday, October 14th, by a vote of 14-9, the Senate Finance Committee finally passed its version of healthcare reform. The Finance bill is now being merged with the legislation passed by the Senate Health, Education, Labor and Pensions Committee to create the final Senate Bill. It is expected that the Finance proposal will be the core of the final product. Importantly, the Senate Finance bill will only cover 91% of the U.S. population, leaving 25 million uninsured, including the undocumented population. The Finance Committee DSH reductions totaling $45 billion over 10 years closely mirror those in the agreement of a few months ago between the American Hospital Association (AHA) and Senate Finance Committee. However, AHA has indicated that they are unhappy with the low coverage level in the bill and are in discussions to either cover more Americans or to lower hospital reductions. A significant development this week is that Senate Majority Leader Harry Reid (D-Nevada) announced that the merged Senate Bill will include a public option including an opt-out provision for states. A state wishing to opt-out would need to pass a state law to do so. Senator Charles Schumer is the architect of this compromise. However, there are doubts whether this proposal could garner the 60 votes required to forestall a filibuster.

A major concern is that under the Senate Finance proposals, New York State's Medicaid program will lose funding of $900 million starting in 2014. However, the House proposal would treat New York fairly and produce savings of up to $2 billion. Under the Senate Finance proposal, New York would only be eligible for enhanced matching funds for childless adults between 100% and 133% of FPL and at an initial lower rate then most other states until 2019. The Senate Finance proposal would also terminate federal Medicaid matching funds for adults over 133% FPL, although these individuals would be entered into the insurance exchanges and allowed to purchase insurance with subsidies.

The House version would provide enhanced federal Medicaid matching funds even for many current Medicaid recipients, thereby not penalizing states who have more expansive programs. All states would receive the same matching percentage -- 100% in 2013 and 2014 and 91% starting in 2015. The state would receive enhanced federal Medicaid matching funds for all childless adults receiving Medicaid, up to 150% FPL and for all Medicaid recipients between 100-150% FPL.

Other concerns in the Senate Finance proposal include: 1) imposing a tax on high cost plans, which would disproportionately impact New York. This is because insurance premiums in New York are higher than in most of the country and because of the significant union presence in the state. Many unions, in lieu of wage increases, have negotiated generous health benefits which could be subject to taxation; and 2) the preemption of New York's superior consumer protections.

STATE BUDGET ACTIVITY

Earlier this month, Governor Paterson released his deficit reduction proposals totaling $5 billion over 16 months in order to close the estimated $3 billion gap for this state fiscal year and to get a head start on next year's gap. He proposed cuts to dozens of healthcare programs and a 10% rate reduction for the Medicaid program. We estimate that this will result in an approximate loss of $63 million for HHC between now and March 31, 2010, and $63 million every year thereafter, if the proposals are implemented in their current form. We have been advocating with our legislators to eliminate or at least reduce the effect of the cuts to HHC. We are working with our union partners and our community advisory board members in this effort as well.

A leaders meeting was held in Albany last week where all sides pledged to work together to close the gap but differed on the approach and timing. Governor Paterson insisted that deliberations on deficit reduction be concluded within the month so that the State can make $5 billion in necessary payments by December 15th. Both the Assembly and Senate have held budget hearings recently to solicit ideas and reactions from the public on the deficit reduction proposals. Both HANYS and GNYHA testified on how healthcare providers will be negatively affected by these proposed cuts. Another leaders meeting is being held today in the Governor's Manhattan Office. Several Senate Democrats have expressed their concern over the size of cuts to healthcare, and education, and are urging the Governor to look elsewhere for savings.

The Legislature will return to Albany on November 10th for a special session where the budget gap would be addressed if an agreement is reached by that time. I will keep the Board appraised on the budget situation as it continues to unfold.

PATIENT SATISFACTION DATA ADDED TO HHC IN FOCUS WEB SITE

As national healthcare reform brings attention to the need for more transparency in healthcare, HHC marks two years since we became the first healthcare system in New York to disclose our quality and safety record of performance to the public. Our web pages, HHC in Focus, have since been viewed by nearly 88,000 visitors who have learned of our commitment to transparency and our willingness to be held accountable for doing all that we can to offer excellent care and to keep our patients safe.

This week HHC added a new section to the public reporting of healthcare quality in our web site - Patient Satisfaction. HHC facilities have a long tradition of measuring patient satisfaction and using feedback from our patients to drive improvements. With new data measured by the federal Centers for Medicare and Medicaid Services (CMS), we now have a standardized way of comparing our progress to others. The data is collected from surveys of a random sample of recently discharged patients who are asked about their experience during their hospital stay and their assessments of the quality of their interactions with physicians, nurses and other staff.

The patient satisfaction data now posted on our public web site illustrates that HHC facilities across the board do well and better than many our counterparts in the voluntary sector. The responses also show that there's more work to be done to improve our patients' experience. HHC will continue to use this data to further assess our patients' satisfaction with the hospital services that they receive, and to further our agenda around the consistent delivery of truly patient-centered care.

EXPANDED PATIENT SATISFACTION SURVEY ACTIVITIES
AT HHC HOSPITALS

In a related item, the ongoing collection of standardized patient satisfaction data, using the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), which is now mandated by CMS, the State Department of Health and the Joint Commission (TJC), has increased to include a larger range of health care services at multiple levels of the health care delivery system. Failure by hospitals to collect and submit data may not only result in negative financial implications, but will render HHC to be out of compliance.

To assist HHC in collecting this data, the Board of Directors in November 2006 approved a three-year contract with two one-year renewal options to the Jackson Organization, now known as HealthStream Inc., the original term of which is due to expire in December 2009. In order to comply with the expanded mandate by the CMS, HHC increased the scope of services of the original contract to include all emergency and outpatient departments and all Diagnostic & Treatment Centers. As a result, the cost of the expanded services provided by HealthStream Inc. was $178,000 in excess of the original contract amount of $288,794, which was approved by the Board in 2006. Pursuant to my authority under Operating Procedure 100-5, I have approved a deviation to our operating procedures in order to pay the vendor this additional $178,000 for these expanded mandated services.

At our November Board Meeting a resolution will come before the Board requesting your approval to spend approximately $1.7 million to fund the renewal option of the contract with HealthStream Inc. The proposed two-year renewal will further expand the scope and will include surveys that measure employee satisfaction, physician satisfaction, home care patient satisfaction, and behavioral health patient satisfaction.

HHC CONNECTX COMPUTER PROGRAM COMPLETES
SYSTEM-WIDE ROLLOUT

As of this fall, the HHC Connectx computerized system for tracking and managing patients referred from HHC facilities, has achieved its goal of offering its services to every HHC network. The Queens Hospital Network, whose referral-management system served as the template for the corporate-wide product, was brought into the wider system in September. With the addition of Queens, the system now offers every HHC facility on-line appointment scheduling, tracking and patient reminders for referrals made to HHC facilities by community providers, as well as by other HHC facilities.

LINCOLN HOSPITAL OPENS BIRTHING SUITE

A ribbon-cutting ceremony on September 29th marked the official opening of Lincoln Hospital's new Labor and Delivery Suite, spanning an area of 12,000 sq. ft. The opening is the final phase of a multimillion dollar capital investment that includes the modernization of the adjacent postpartum, neonatal and nursery units. The Birthing Suite offers comfortable, family-friendly rooms equipped with cozy lounge chairs, private bathrooms, personal closets, flat screen televisions and telephones. The new birthing suite consists of eight labor and delivery rooms, two C-Section Operating Rooms, five exam rooms and a spacious recovery room. More than 2,400 babies are born at Lincoln each year.

HHC IN THE NEWS HIGHLIGHTS

• New Labor Suites at Lincoln Hospital, News 12 the Bronx-TV, 9/29/09
• WeCoach program, BRIC Community Media-TV, 10/23/09
• CEO Viewpoint,Scottsdale Institute, September 2009
• HHC's reach extends deep into its communities, AHA News, 9/30/09
• D.C. Dignitaries Highlight This Year's 100 Influentials, Hispanic Business, 10/01/09
• Vicepresidente de 'Generations Northern Manhattan Health Network' figura entre los 100 hispanos más influyentes (VP of Generations Northern Manhattan Health Network is among 100 most influential Hispanics), El Diario, 10/09/09
• Lincoln Hospital opens state-of-art birthing center, Caribbean Life News, 10/07/09
• Music therapy for children at Jacobi, Yournabe, 10/08/09
• NYC Mammography Report Shows Improvements, Challenges, The Epoch Times, 10/25/09
• G,R.A.C.E. Foundation gets new home in Sea View, Staten Island Advance, 10/27/09
• Brooklyn Nursing Symposium Aids New Grads, Honors Seasoned Nurses, Nursing Spectrum, 10/19/09
• MetroPlus Health Plan: More than Managed Care, Inside Healthcare, 10/01/09
• Free AIDS testing in Jax Hts. gets big response, Yournabe, 10/22/09