ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
DECEMBER 17, 2009

Earlier this month, HHC collaborated with the Mayor's Office of Immigrant Affairs and the NYC Department of Health to jointly issue an open letter to Immigrant New Yorkers on H1N1 and Seasonal Influenza. The letter informed immigrant New Yorkers about how they could prevent the flu through vaccination, and reminded them of the health services that are available to them, regardless of immigration status. In order to reach limited-English speakers, the letter has also been made available in eight foreign languages: Spanish, Chinese, Russian, Korean, Haitian Creole, Arabic, Urdu and Bengali.

Flu season is now in full swing and HHC emergency departments have experienced no unexpected activity related to influenza. HHC hospitals now have an adequate supply of vaccine for both seasonal flu and H1N1 flu. HHC flu centers, like the City Health Department immunization centers, have now expanded vaccination to offer it to all New Yorkers, including those who do not fall within the more urgent clinical high-risk categories. Fortunately, thus far this year's flu season in New York City has been relatively mild, but our hospitals remain prepared to respond if activity increases during January and February, as it has historically.

On November 30th, I joined Mayor Michael Bloomberg and Deputy Mayor for Health and Human Services Linda I. Gibbs at Elmhurst Hospital to announce the start of construction for HHC's medical simulation center to train healthcare providers. The HHC Institute for Medical Simulation and Advanced Learning (IMSAL) will be New York City's largest and most advanced medical training technology center. We are also the first public hospital system in the nation to offer such training, which will improve clinical learning, patient care and patient safety. As I've shared with you in past reports, IMSAL will be modeled after similar medical learning centers at Harvard University, the Mayo Clinic and the North Shore Long Island Jewish Health System. The Center is expected to train more than 14,000 medical, nursing and other HHC staff during the first three years.

Clinical teams often confront emergency situations requiring quick and precise communication, expert coordination and a high degree of technical skill. Just as pilots master complexity through cockpit simulators, HHC's new medical simulation center will better train our staff to function as high-performing clinical team members in a wide variety of highly realistic, demanding medical scenarios.

I am very pleased to report that HHC's patient safety efforts will be recognized at the 2010 National Patient Safety Foundation's Annual Congress. Several HHC submissions have been accepted for presentation. Ms. Mei Kong, Senior Director for Patient Safety and Dr. Abdul Mondul, Chief of Palliative Care and Patient Safety Officer at Lincoln Hospital will deliver a presentation on TeamSTEPPS, Just Culture, and Patient Safety. Carole Morgan, Chief Nurse Executive and Marian McNamara, Patient Safety Officer at Sea View Hospital, will deliver a talk on the facility's Medication Management Optimization Program which is designed to wean their residents off multiple medications while improving their quality of life. Nandini Gadkar and Dr. Reba Williams of HHC's Office of Healthcare Improvement will present on the Implementation of Rapid Response Teams across the system. Lastly, Caroline Jacobs, Senior Vice President for Patient Safety is serving as a 2010 Congress Track Co-Chair and Dr. Haru Okuda has been invited to participate on the planning committee for a Simulation and Learning Center that will be created at the 2010 Congress. Other HHC facilities may be invited to present additional posters at the Congress.

It is enormously gratifying that HHC continues to garner national recognition for our patient safety accomplishments.

The National Patient Safety Foundation is the primary national organization solely committed to improving patient safety. HHC is currently a major participant in the “Patient Safety Initiative at America's Public Hospitals”, a collaboration between the National Patient Safety Foundation and the National Association of Public Hospitals and Health Systems, with generous funding by the Kaiser Permanente Community Benefit Endowment Fund.

As part of HHC's commemoration of World AIDS Day on December 1st, HHC announced that in Fiscal Year 2009 our facilities increased the number of HIV tests given to New Yorkers by 17% over the previous year and more than tripled the rate from four years ago. More than 1,800 patients tested this year learned that they were HIV positive and were linked to care. On average, 90% of the individuals indentified as HIV positive were linked to life-saving care within 90 days of their diagnosis, and the majority -- 60% -- entered care within the same month they were diagnosed.

HHC is committed to making HIV testing a routine part of healthcare, and regularly offers rapid HIV tests to patients in emergency rooms, inpatient units, clinics, non-traditional sites like bathhouses, and through innovative programs like Project Brief at Jacobi and NCB. By making testing available in as many settings as possible, we are increasing the numbers of early detections, one of the most important strategies in the fight against this disease.

MetroPlus Health Plan has once again been rated the top Medicaid Managed Care health plan in New York City, based on quality ratings and member satisfaction surveys. The designation comes from the New York State Health Department in its recently published 2009 Consumer's Guide to Medicaid Managed Care in New York City. The ratings are based on measures that include preventive and well-care for adults and children, quality of care for members with illnesses and patient satisfaction with access and service. Congratulations to MetroPlus Executive Director Dr. Arnold Saperstein and his entire staff for once again achieving this outstanding rating.

Last month, in recognition of Palliative Care Month, HHC hosted a variety of activities throughout our facilities. A half-day conference was held on November 19th at Metropolitan Hospital's Draper Hall, attended by senior leadership of the Palliative Care programs in all of our facilities. In addition to HHC specialists and other national experts, representatives from several City agencies participated. Four members of the HHC Palliative Care Council received awards for their expertise and leadership in HHC's palliative care initiative. They were Donna Leno Gordon, RN of Coney Island Hospital, Allen S. Keller, MD of Bellevue Hospital Center, Abdul S. Mondul, MD of Lincoln Hospital, and Lauren Shaiova, MD of Metropolitan Hospital.

On the same day, HHC announced that the number of patients seeking palliative care services increased by 33 percent in our hospitals and by 89 percent in our outpatient health centers. Care for in-patients increased to 4,360 in FY 2009 from 3,282 in FY2008, while outpatient visits increased to 1,868 in FY 2009 from 987 in FY 2008. The growth in HHC's program shows that patients and families want support to make informed decisions in their own best interests as they approach the end of life. Those who are suffering from the debilitating symptoms of a terminal or chronic illness want relief so they can make the most of every day. Historically, palliative care has not been widely available from public hospitals. HHC is now able to provide such care in all of our hospitals.

On December 8th, Mayor Michael Bloomberg and Governor David Patterson sent a joint letter to New York's U.S. Senators, Charles Schumer and Kirsten Gillibrand, asking that they address provisions of the Senate leadership bill, the Patient Protection and Affordable Care Act (PPACA), that would disproportionately burden New York State and New York City. If left unaddressed, those provisions could weaken New York's healthcare delivery system. The two prime issues which were highlighted were the heavy Disproportionate Share Hospital (DSH) reductions and the unfair enhanced Federal Matching Assistance Percentage (FMAP).

The Senate leadership bill contains $43 billion in total DSH reductions -- more than double the reductions in the House bill. Under the Senate bill, Medicaid DSH funding would be reduced by $22.4 billion over 10 years starting in 2015. The Mayor and Governor pointed out that DSH cuts of this magnitude would adversely affect HHC, potentially compelling closure of all of HHC's community clinics and cancellation of its home care service.

The mayor and governor also took issue with the Senate's enhanced FMAP feature that grossly discriminates between Medicaid expansion states like New York and historically less generous states. Unfortunately, the bill would only provide an enhanced FMAP for newly added categories of Medicaid enrollees in a state. The state has estimated that the Senate bill would actually increase state Medicaid expenditures by $1 billion a year, as many currently eligible persons may enroll in Medicaid, but that no enhanced FMAP would help cover those costs. In contrast, the House bill includes a very favorable enhanced FMAP provision. For New York State's Medicaid program, this could be worth up to $4 billion in annual savings. Given the perilous budget forecasts for the state, savings of this magnitude would be extremely helpful in mitigating any further harmful state Medicaid cuts. The mayor and governor pointed out that currently New York's regular federal matching percentage is 50 percent, while the national average is 57 percent. The Senate bill's enhanced Medicaid feature would keep New York's overall FMAP essentially flat while the national average FMAP will rise to 65 percent or more. In conjunction with the City and State, HHC worked closely with New York House (Congressional) staff to craft a New York State Congressional Delegation letter to House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid asking that the DSH and enhanced FMAP provisions in the Senate bill be changed in favor of the House's version in any final bill so that New York and HHC would not be adversely affected by the legislation. The letter was finalized late last night.

Senator Reid was able to secure the 60 Senate votes necessary to take the legislation to the Senate floor, with the debate starting November 30th. The hope is to have a final bill approved before the holidays. It is possible that two changes -- ameliorating heavy DSH reductions and the unfair enhanced FMAP -- changes that are vital to HHC -- could yet be included in the managers' amendment which would help shape the final bill. It should be noted that Senator Reid has not yet secured the support of the 60 members of his caucus for passage of the final bill. At least four votes are still not nailed down in the conference. The compromises on the public plan announced last week -- allowing a Medicare buy-in for persons over the age of 55 who are eligible for the insurance exchanges to be created by the bill and the creation of national non-profit insurance plans, had to be scaled down this week, when a single Senator-Joe Lieberman of Connecticut- expressed his opposition to the Medicare buy in. This illustrates the great difficulty the Senate leadership is having with finding the 60 votes necessary. Another key issue that needs to be watched is abortion. Senator Ben Nelson of Nebraska has announced that he will introduce an amendment mirroring the restrictive language of the House bill prohibiting any plan sold on the insurance exchange from providing abortion services. There is compromise language being crafted that may yet garner Senator Nelson's vote. We will keep you updated as health reform gets closer to being actualized.

After several weeks of on/off negotiations, the State Legislature came to an agreement on a $2.7 billion deficit reduction plan (DRP). Governor Paterson ultimately went along with the deal but was not pleased with it. The Governor stated the deal cut less than what the State actually needs ($3.2 billion) and relies on too many one-shot money saving schemes rather than generating recurring savings. Under the final deal, hospitals, nursing homes and home care agencies will lose their trend factor which will cost HHC approximately $7.25 million. Other reductions included 10% across the board state agency cuts and a 12.5% cut to dozens of state funded public health and mental hygiene programs. As a result, HHC will lose up to $1.2 million in workforce training funds. This brings the total DRP cut to HHC to $8.4 million. This reduction will be on top of the $108 million state budget cut to HHC made earlier this year. Due to the across the board reductions, MetroPlus will also likely see a reduction in the Quality Incentive Payments that they are normally awarded every year by the State Department of Health. The DRP also will delay HEAL project payments for the rest of the state fiscal year and into the next fiscal year.

For HHC, this outcome was better than what was originally proposed. Under the Governor's original DRP proposal, HHC would have lost $63 million. Also, just days before the final deal was announced, we were looking at cuts of ranging from $23 to $29 million under different legislative proposals. This outcome was due in large part to the efforts of Senate Democrats who mostly refused to impose additional cuts on hospitals and nursing homes this year. Many thanks are due to our community advisory board members and healthcare advocates who called and wrote to their legislators and also to our union colleagues, specifically at DC 37, who organized two lobby days in Albany and conducted phone-banks to advocate with the Assembly and Senate.

That being said, there is still cause for concern now and again in January. Because the savings in the DRP deal was less than what the Governor said was needed, he directed the State Division of the Budget to reduce certain local assistance payments by $750 million to municipalities and school districts this week to address the state's cash flow shortage. While HHC was not directly affected by these reductions, the City of New York will see a reduction of approximately $84 million.

Beyond this, the deficit for the next state Fiscal Year is currently estimated at nearly $7 billion. The deficit could grow if tax revenues continue to come in below projections.

Beyond the Deficit Reduction Package, the Legislature passed other legislation last week including a public authorities reform bill that will affect HHC. The new law creates a new Authority Budget Office (ABO) with broad oversight, regulatory and enforcement powers. The act requires Board members of authorities to affirmatively certify they understand their oath of office and fiduciary responsibilities. Also, while HHC already posts information required under the first PAAA of 2005, the organization is now required to report yearly to the new ABO and make available to the public more information related to financial and operating data and risks, material changes in programs, description of pending litigation and other detailed operating information.

HHC will be secondarily affected under our contractual agreements with the State Dormitory Authority, DASNY, for capital projects since DASNY is a State Authority and is covered by the new law. DASNY will have increased reporting requirements and contract scrutiny by the State Comptroller and ABO. This could lead to our projects with them taking longer and costing more, due to the administrative burden on DASNY.

The law goes into effect on 3/1/10 with certain reporting deadlines on 7/1/10 and/or subject to regulation. HHC staff worked with the Mayor's Office, fellow public hospitals from around the State and HANYS on earlier versions of the bill to alleviate some of the more burdensome requirements that it originally contained.

Moving to the City budget, nearly all city agencies were asked to come up with proposals to reduce City Tax Levy spending by 4% this year and 8% next year. The City budget gap is estimated to be approximately $5 billion. For HHC, this will mean a direct reduction of $3.4 million this year and $6.9 million next year. In addition to receiving reductions in non-cash subsidies for administrative services from City agencies, and reducing our subsidies for prisoner and uniformed services, we may need to eliminate programs for Sexual Assault Response Teams and the Substance Abuse Contingency Management program, which are funded by the City. We will also face reductions in City funding that flows to HHC through DOHMH, as they cut their budget in order to meet their target.

This year's fifth HHC public meeting was held this Tuesday evening at Harlem Hospital, bringing to a close this year's series of public meetings held annually in each borough. The events give our leadership an opportunity to report on HHC activities in the local community and particularly offer a chance for local New Yorkers to speak about their experiences with HHC facilities and some of the more immediate needs of their community. I particularly want to thank the Board members who attended the meetings.

On November 20, Harlem Hospital Center celebrated the grand opening of the Medina Clinic. It is the first health center of its kind in New York City, and will provide comprehensive primary care, health education, and outreach screening with the cultures and languages of the Islamic Community in mind. The clinic is open to all and is expected to serve 2,000 patients annually. The special occasion was celebrated with distinguished guests, including State Senator Bill Perkins, City Council Member and Majority Whip Inez E. Dickens, and Imam Souleimane Konate, General Secretary of the Council of African Imams.

Marie Ankner, HHC's Assistant Vice President of Corporate Nursing has been elected president of the New York Organization of Nurse Executives. NYONE is a professional organization of nearly 900 nurse leaders who design, influence and manage healthcare services across the state and it is an active participant in the development of public health policy. Through her longstanding membership and now as the president of NYONE, Ms. Ankner has been a powerful advocate for patients and the nursing profession. Congratulations for this singular honor.

On December 3rd, Harlem Hospital social worker Mark White was named an Emerging Social Work Leader by the New York City Chapter of the National Association of Social Workers at the 3rd Annual Emerging Leaders Award Ceremony. Mr. White is the Child Protection Coordinator at Harlem, on the faculty at Hunter College, and a private practitioner specializing in care for children and families. He provides highly skilled clinical services and crisis invention to innumerable children and families and has been recognized by other professionals at Harlem Hospital, receiving a special certificate of appreciation this year from the Pediatrics Residency Program at Harlem. As Harlem Hospital celebrates the 100th anniversary of its Social Work program, the contributions of a social work leader like Mr. White are particularly appreciated. Congratulations to him for this outstanding recognition.

This week HHC launched a new Web site designed to help the 58,000 diabetic patients in our diabetes registry become more active participants in their care and access tips and resources to get their blood sugar under control. The HHC Diabetes Wellness Center, at www.nyc.gov/hhcdiabetes, features advice from HHC doctors, nurses and nutritionists, patient success stories, healthy eating and exercise tips, access to free blood monitors, and a comprehensive list of diabetes care centers, support groups and education available in HHC facilities in all five boroughs. The entire site is available in Spanish and a dozen more languages to make it accessible to HHC's diverse patient population. The online resource will be promoted directly to patients through a direct mail brochure that will be sent to their homes in January. Promotional flyers will be available throughout all HHC facilities.

HHC has pioneered the use of an electronic registry for diabetic patients and has seen a significant resulting increase in the number of diabetic patients who have achieved healthy levels of blood sugar, blood pressure and cholesterol. This new Web site is another innovative method that HHC is introducing to engage diabetic patients in improving their health. Next month I will demonstrate for the Board some of the key features of this new resource for our diabetic patients.

Just over two years ago, we embarked on a path to change the way we do business and to become an organization that embraces continuous performance improvement. Our vehicle for doing this is Breakthrough, our name for an improvement methodology known as Lean and based upon the Toyota Production System. We have used Breakthrough to improve our efficiency, revenues and the quality of our services. Through teams comprised of physicians, clerks, nurses, technicians and administrators, we have begun to create an improvement culture of inclusion and transparency in which each individual who works for HHC will be valued for their ability to identify problems and make improvements, and to do so with patient needs always the highest priority.

We now run up to 20 Rapid Improvement Events (RIEs) monthly across the corporation. During these RIEs, interdisciplinary teams come together for four and a half days to create and implement solutions for problems that have typically plagued us for years. The teams present their work at the end of these weeks and I make it a point to attend at least one of these report-outs each month. I have consistently been incredibly impressed by what these teams have achieved. Last week at Metropolitan Hospital, three facility teams and two 'enterprise', or corporate-wide teams found almost $30 million in revenue captured from the prevention of denials and significantly reduced Emergency Department dwell time for patients presenting with abdominal pain at Bellevue and Metropolitan. And that was just one report-out, for one week. In total to date, Breakthrough teams have produced a total of $20.4 million in new revenue and decreased expenses.

Teams are working in areas as diverse as emergency rooms, human resources, mental health and revenue cycle and have completed more than 270 Rapid Improvement Events so far. Each one of these teams has helped to make HHC a better place for our patients and for our staff.

Perhaps most importantly for HHC's future, we have had 1,847 employees actively participate on Breakthrough teams and 4,496 employees have attended some type of Breakthrough activity.

Next month we will make a formal presentation to the Board in support of proposed additional funding to continue our progress in implementing Breakthrough across our system and deepening the valuable improvement work that is helping to streamline our operations. In the interim, if any individual Board members would like further detailed information about our Breakthrough work, I would be happy to arrange to brief you or have you speak with some of our Breakthrough team leaders to review their accomplishments to date.

As LaRay Brown notes in the video you are about to see, we are fortunate to have an incredible 'brain trust' in HHC. Here is a little about what we are doing from the people who are actually doing the work.

• HHC Medical Simulation Center, NY1-TV, 11/30/09 (Also covered by NY1 Noticias, Ch. 47, WCBS, WNYC, NY Post, Crain's, AP, Queens Courier, The Chief, Yournabe, The Queens Gazette)
• New CUNY Program Trains Medical Interpreters, WNYC Radio, 12/10/09 (Also covered by Univision)
• City Marks World Aids Day, NY1-TV, 12/01/09 (Also covered by NYC TV)
• Jacobi Ready Set Parent Program, News 12 the Bronx-TV, 11/27/09
• Dr. Kristin Harkin at North Central Bronx on CO Poisoning, WPIX-TV, 12/07/09
• Dr. Kristin Harkin at North Central Bronx on Fire Resistant Pajamas, WPIX-TV, 12/08/09
• Se gradúa primera clase de intérpretes (First class of interpreters graduates), El Diario, 12/15/09
• Experts give kids a hand at learning how to prevent cold and flu germs, New York Daily News, 11/16/09
• Dialysis Savings, Crain's Health Pulse, 11/30/09
• Cancer survivors celebrate life, Queens Chronicle, 11/25/09 (Also covered by Queens Courier)
• Jugglers bring joy to hospitalized kids, New York Daily News, 12/15/09
• World Aids Day held at Jacobi, Yournabe, 12/10/09
• Design showcase, Behavioral Healthcare, July/August 2009
• Speak, Bellevue, The New Yorker, 12/07/09
• Providing safe injectable medicine, The British Journal of Clinical Pharmacy, Vol.1 November 2009
• Taking It to the Streets, CPR, 12/10/09
• Gouverneur Healthcare Services on NYC's Lower East Side Gets a Facelift, Construction Today, December 2009