ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
JANUARY 28, 2010

As most of you know, soon after the devastating earthquake hit Haiti on Jan. 12th, HHC staff began mobilizing to help the people of the stricken island and their countrymen and women here in New York City. More than 125,000 New Yorkers are of Haitian descent, including many HHC patients, doctors, nurses, and other employees. Numerous individuals throughout HHC facilities have been affected directly or indirectly, including those whose family members were injured or killed in the catastrophe.

I want to thank Tony Martin, Senior Vice President of our Central Brooklyn Healthcare Network and Executive Director of Kings County Hospital Center, who immediately volunteered to coordinate HHC's response to the disaster. Kings County, which serves a large population of Haitian New Yorkers who reside in Central Brooklyn, has the largest number of Haitian staff. Mr. Martin continues to work with the Office of the Mayor, New York State representatives and federal officials, as well as local elected officials and community-based organizations, on HHC's immediate as well as long term response. Given the scope and magnitude of the catastrophe, help will be needed for months to come.

HHC has done the following:

• The Kings County Hospital Center's 24 hour Behavioral Health Hotline is available to provide counseling to members of the Haitian community. Trained mental health professional counselors can be reached at 718-245-2314. People can be referred to Creole-speaking staff if necessary.
• A Relief Fund was established by the HHC Foundation immediately following the earthquake. Cash or check donations are being accepted and combined with others in the Mayor's Fund to Advance New York City, which is distributing contributions to reputable non-profit organizations that can be of immediate assistance in Haiti.
• A payroll deduction program will be set up to enable HHC employees to make donations directly from their paychecks to the HHC Foundation Haiti Relief Fund over a series of pay periods.
• We are recruiting medical volunteers who can be ready for deployment when advised by government authorities in charge of relief efforts. Thus far, more than 100 clinical personnel across our system have expressed a willingness to volunteer for deployment. HHC will send a team with medical equipment and supplies as soon as authorities coordinating efforts on the ground signal that such assistance can be accepted. Some HHC employees who requested and were granted annual leave have already rendered service in Haiti under the auspices of several different non-profit organizations coordinating initial emergency medical services on the ground.
• LegalHealth, a non-profit organization that provides legal assistance to patients at some of our facilities, will expand their legal services at five of our facilities, including Kings County, to advise Haitian members of the community about applying for Temporary Protected Status (TPS). TPS designation for Haitians has been made available by the U.S. Department of Homeland Security. For those who qualify, TPS is available through July 22, 2011 and can include work authorization.

As always, HHC employees have had a strong compassionate response to this unfolding tragedy and are eager to help. We continue to stress that, for the time being, the best way we can all help is though financial donations. The time for other possible contributions in the form of further volunteer services will come later, as Haiti grapples with the long struggle to recover from this catastrophic event.

The 2010 multi-hospital survey of HHC by The Joint Commission began on Tuesday, January 12th with an Orientation Program for the survey team leader. The Orientation Program provides an opportunity for me and members of my senior staff to provide The Joint Commission surveyor with an overview of HHC and how we provide oversight and support to the HHC facilities to assure that we meet the intent of TJC standards. This year's survey team leader, Ms. Ellen R. Rhodes, RN, also briefed the participants on changes to the survey process and new requirements for 2010.

The meeting was attended by senior staff from Central Office as well as from the facilities being surveyed in 2010, namely Elmhurst, Gouverneur, Jacobi, McKinney and Metropolitan. I am confident that each facility will perform well on this triennial evaluation of the quality and safety of the care we provide.

Three HHC physicians have been accepted to participate in the United Hospital Fund/Greater New York Hospital Association's Clinical Quality Fellowship Program, an intensive 15-month program to train the next generation of physician quality improvement leaders. The CQFP is an exciting opportunity for HHC to continue to grow the capacity of our medical staff to support our aggressive quality and patient safety agenda. There are a total of 16 Fellows in the class of 2010.

HHC's 2010 Fellows include Dr. Amanda Ascher, Medical Director and Patient Safety Officer at Belvis Diagnostic and Treatment Center; Dr. Peter Kim, Surgical Attending at Jacobi Medical Center; and Dr. Haru Okuda, Assistant Vice President and Director of the HHC Institute for Medical Simulation and Advanced Learning. Congratulations to these HHC patient safety leaders.

Last night, President Obama in the annual state of the union address urged congress "not to walk away from (Health) reform. Not now. Not when we are so close." This message was in response to the election of Scott Brown -- a Republican -- as Massachusetts' U.S. Senator in a special election held on January 19th to fill the seat previously held by Senator Ted Kennedy. The election threatens to unravel the work Congress has done for the past year on health care reform. Senator-elect Brown's election gives Senate Republicans a total 41 votes, enough to filibuster and block the Democrats from passing a final bill. On Christmas Eve, the Senate, by a vote of 60-39 had approved its version of health care reform, the Patient Protection and Affordable Care Act (PPACA). Brown has pledged to oppose pending national health care reform, even though as a State Senator he voted for the Massachusetts version of health care reform in 2006, the model for health insurance expansion in both the Senate and House bills. Interestingly, the negotiations between the Senate and House leadership, in conjunction with the White House, had been narrowing the differences between the Senate and House bills.

There are now at least three options being considered by the White House and Congressional leadership. The first is to have the House pass the Senate bill in its entirety, which would then be sent to President Barack Obama for his signature. As there are a number of provisions in the Senate bill which are unacceptable to many House members, the Senate would have to guarantee that a "corrections" bill would be passed soon after, likely through the reconciliation process, which only requires 51 votes, rather then the 60 needed to avoid a filibuster. Another option being discussed is to pass health care reform piece-meal, focusing on items common to both bills which enjoy some bipartisan support. As an example, a bill revolving around health insurance reform may garner some Republican votes. A third option is to pass a smaller, less comprehensive bill, which could pass muster in both houses.

Many Congressional Democrats are uneasy about what the lessons of the Massachusetts election may be. Some in the rank and file are arguing that healthcare reform should be abandoned; other say that, given that residents of Massachusetts enjoy near universal health insurance coverage, which is politically popular, the election was more a quirk based on the Democratic candidate Martha Coakley running a lackluster campaign, rather then a referendum on health care. Nevertheless, Congressional leadership has decided not to proceed with any healthcare votes in the Senate until Senator-elect Brown is certified and seated in the Senate, which should be in the next week or two. Whether significant healthcare reform remains achievable in the near term remains uncertain.

On January 13th, I joined policy experts, health care officials, and faith leaders in a telephonic press briefing to clarify the stake of immigrants in health care reform, explain the dilemma of assuring access to health care for the remaining uninsured, and discuss the potential harm of proposed immigrant access restrictions on all communities. The briefing was hosted by the National Council of La Raza -- the largest national Hispanic civil rights and advocacy organization in the United States -- along with national advocates of health care reform.

HHC has been a strong proponent of healthcare reform to extend coverage to those who are currently uninsured. Unfortunately, the healthcare reform proposals being debated in Congress -- and now placed in limbo by the recent special Senate election results in Massachusetts -- would have the effect of denying legal immigrants access to affordable coverage and barring undocumented immigrants from purchasing market priced coverage. In my remarks, I detailed how the impact of such restrictions could be financially destabilizing for safety net providers such as HHC with potentially broad adverse consequences for the communities that we serve. We all strongly urged that Congress re-think this irrational and inequitable approach with regard to immigrants and healthcare reform.

The briefing generated supportive coverage from the New York Times in its widely-read "Prescriptions" column covering the potential impact of healthcare reform.

Regarding another federal legislative matter, State Assembly Speaker Sheldon Silver recently wrote to New York Congressional representatives Carolyn Maloney and Jerrold Nadler to express concern that congress may remove the Community Program -- which provides treatment funding for affected individuals other than unifromed responders -- from the 9/11 Health and Compensation Act now under consideration. Some members of Congress are suggesting that the pending legislation should fund only the responder programs at FDNY and Mt. Sinai, and not include funding for the Community Program for downtown residents, office workers and students suffering from illness related to the events of 9/11. HHC's WTC Environmental Health Center, which treats those non-responder community members, is now partly funded by a federal grant that will expire in less than two years. We are working to shore up support for the Community Program, and are continuing to work with our partners in Congress and other stakeholders to push for passage of legislation would include a secure funding structure well into the future.

Governor Paterson released his State Fiscal Year 2010-11 Executive Budget last week. The $134 billion spending plan proposes a series of actions -- both cuts and taxes -- to close a projected $7.4 billion budget gap. Healthcare and Medicaid spending would be reduced by approximately $1 billion. An additional $923 million would be raised through taxes and assessments that would be directed to support health care programs (i.e., stave off cuts beyond the $1 billion proposed). Of this amount, $650 million would be raised by increasing the cigarette tax by $1 dollar per pack and by imposing a new excise tax on sugared beverages.

At the moment, we are estimating the impact on HHC to be approximately $78 to $95 million this year. The impact could grow to between $123 and $143 million when the proposals are fully implemented three years from now. These cuts, if enacted, would add to the roughly $240 million in cuts to annual revenue that we have endured under the state budget actions across the last three fiscal years and would significantly worsen our already daunting fiscal challenges as we confront a projected deficit of more than one billion dollars next fiscal year.

The proposed cuts breakdown as follows. HHC's hospitals could lose between $66 and $74 million in the first year, plus we could lose up to $22 million more based upon estimates of a proposal to penalize hospitals for preventable re-admissions when fully implemented. (While the Executive Budget booked savings for readmissions penalties, the exact methodology for how the State would distribute the penalties has not been developed and released yet.) Due to an extension of the nursing home rebasing proposal (which is positive for HHC) and a commensurate delay in the regional pricing proposal (which would have been very negative), we could have a net increase of $4.2 million on the nursing home side this year. MetroPlus would lose $15 million and HHC Health and Home Care would lose about $600,000. I stress that these estimates are preliminary and could change as we continue our analysis of the budget and as the State clarifies aspects of the proposed cuts.

Highlights of the major proposals that affect HHC include:

• Eliminating the 2010 cost-of-living increase trend factor for hospitals, nursing homes and home care providers;
• Increasing in the Gross Receipts Tax on hospitals and home care providers and an increase in the assessment on nursing homes;
• Redistributing Indirect Medical Education funds;
• Reducing payments related to preventable conditions and readmissions;
• Reducing bed-hold payments to nursing homes by 5%;
• Limiting the payments to nursing homes who have to temporarily place patients in hospitals to 14 days annually for hospitalization and 10 days for other stays;
• Beginning to award Quality Incentive payments for nursing homes starting in April; and
• Reducing Medicaid Managed Care premiums to plans by 1.7%.

Although the Executive Budget includes a significant cut to two pools that fund “bad debt and charity care” among voluntary hospitals - and significantly redistributes the remaining pool dollars in accordance with uncompensated care to the uninsured, rather than bad debt - there is no proposed cut to the public hospital uncompensated care pool. Although this explicit acknowledgement of the need to support continued services to the uninsured is welcome, the proposed Executive Budget contains no express provision for granting HHC continued access to at least the $300 million in additional DSH funds that we received in the prior two state fiscal years. This remains an issue of critical importance.

We have already begun to advocate with our state legislators both in Albany and here locally. Bellevue and Elmhurst hospitals' Community Advisory Boards held legislative events last week and both were well attended by their elected officials. In addition, legislative events will be held tomorrow at Coler-Goldwater and Cumberland. On Saturday, Harlem and Renaissance Community Advisory Boards will be holding their annual advocacy event. As we typically do, we are coordinating our efforts with our labor partners and with the healthcare advocacy community. A Community Advisory Board lobby day is also being planned in Albany for March.

Elmhurst Hospital Center held a groundbreaking on December 22nd for a new 20,000 square-foot Women's Healthcare Services Pavilion. The state-of-the-art facility will house a variety of women's health services, including gynecology, gynecological surgery, colposcopy, pregnancy and HIV testing and counseling, prenatal care, and high-risk pregnancy monitoring. The Pavilion, slated to be completed by 2012, will also be home to a number of support programs, including those offering classes in breastfeeding, childbirth, nutrition, and diabetes education. Councilwoman Helen Sears and the New York City Council allocated $8.5 million for the facility. An additional $6 million in funding came from a New York State HEAL Grant and HHC's capital budget.

On December 29, 2009, Harlem Hospital Center received formal designation by the American Society of Metabolic and Bariatric Surgery and Surgical Review Corporation as a Bariatric Center of Excellence. The achievement recognizes Harlem's comprehensive program to provide safe bariatric surgical care with excellent short- and long-term outcomes. Congratulations to Harlem Hospital for this outstanding recognition.

On today's agenda for your consideration is a request to increase by $2 million the funding of the contract with Simpler Consulting, to continue and expand the implementation of HHC's Breakthrough Performance Improvement Initiative throughout the Corporation. The contract was originally funded in November 27 for an amount not to exceed $5 million. Additional funding is being requested because the Corporation has modified its rollout approach, due to the significant accomplishments of the Breakthrough improvement teams and the additional need created by the largest looming budget deficit in HHC history. Modifications to the original work plan include creating and implementing additional training modules to develop a larger cadre of internal Breakthrough experts, limiting the initial number of sites engaged and increasing the length of consultant engagement at each site in order to make deep, substantive improvements within critical value streams rather than more superficially across all sites.

As I mentioned in my report last month, HHC has benefited greatly from Breakthrough activities so far, including achieving $13 million in cost savings and $13.5 million in new revenues. The additional funding requested for this contract will go far to ensure the continued success and sustainability of the Breakthrough work being done, and I urge your support.

Pursuant to HHC Operating Procedure 100-5, I have granted a deviation from our standard procurement procedures to extend HHC's contract with the Jewish Community Center (JCC) of Staten Island for one year. JCC services will focus on intensive outreach to connect former participants of HHC's Staten Island Health Access (SIHA) program with adult primary care services operated by HHC or those of the Community Health Center of Richmond (CHCR). The Board approved an 18-month sole-source extension of this contract to end December 31, 2009, when it was anticipated that the services required would be completed by that date. It has recently become apparent that the services of the JCC will be required for another year, to connect former SIHA participants with ongoing healthcare services. HHC's Staten Island-based primary care facilities now have the capacity to assist individuals to obtain public health insurance for which they are eligible, and for ineligible individuals to obtain affordable care through HHC Options. We will no longer require JCC's assistance in providing facilitated public health insurance enrollment. However, JCC, which originally engaged the SIHA participants -- many of whom are immigrants -- is uniquely positioned to perform the required outreach to those same participants. The cost of funding this contract extension -- at the same rate as previously approved by the Board -- shall not exceed $136,070.

• Woodhull Medical and Mental Health Center received honorable mention from the 2010 HANYS Community Health Improvement Award program for its Geriatric Outreach Program. The program reached thousands of area seniors through screening and educational events, did more than 1,500 home assessments and increased outpatient visits by 17%.
• Sea View Hospital Rehabilitation Center and Home received one of three 2010 AMDA Foundation/Evercare Awards for improving the quality of life for persons living in nursing homes through effective palliative care. AMDA is the American Medical Directors Association, for medical directors practicing in the long term care continuum around the country. Sea View's palliative care program, which began in 2004, has led to many positive outcomes for patients, such as a reduction in feeding tube placement, which dropped from 20 residents in 2008 to 8 in 2009. Resident satisfaction remains consistently high, with resident rating care as either "very good" or "excellent."

I mentioned to you last month that HHC had launched an online Diabetes Wellness Center, 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, blood pressure and cholesterol levels under control. Today I plan to show you some of the features of that web site, as well as several other features that HHC has added to its overall web presence, HHC's new social media functionality and three new facility web sites that have been launched in recent weeks.

HHC's corporate web site gets 1.8 million visits each year, and visitors continue to increase. The HHC In Focus section of our web site publishes updated quality indicators to give the public transparent information about our performance record. We've added features to allow visitors to translate our web site to languages other than English. A new mapping feature allows visitors to chart their trip to any of our facilities by car or public transportation. A new RSS feed allows journalists to receive automatic updates of HHC news. Our new Twitter and Facebook feeds reach our "followers" in the social media world. Most importantly, all of our hospitals are developing their own web sites to reach their local communities. As expenses continue to mount in every area of our operation, we continue to expand our use of more cost-effective internet technology to reach the communities we serve.

On January 8th HHC reached an amicable resolution of litigation brought against HHC and Kings County Hospital Center by the New York Civil Liberties Union and the Mental Hygiene Legal Services on May 2, 2007, regarding alleged deficiencies in the hospital's psychiatric unit. HHC simultaneously reached an agreement with the US Department of Justice to address similar past deficiencies referenced in a federal complaint filed contemporaneously with the settlement document.

Over the past year, we have worked closely with all the parties to the litigation to identify and begin implementing reforms that go well beyond merely correcting deficient conditions alleged in the original lawsuit. Under the leadership of Network SVP Antonio Martin and Kings County Behavior Health Administrator Dr. Joseph Merlino, far-reaching corrective action has been taken and a comprehensive plan has been devised to fundamentally overhaul the psychiatric program at Kings County Hospital to create a true model of safe, compassionate, patient-centered behavioral health services that others in the city and the country will want to replicate.

As you will see in the video that will be shown at the conclusion of my remarks, HHC has begun to create a model therapeutic program and environment at Kings County Hospital that ensures the safety and security of patients and staff, and incorporates new leadership, new protocols, increased training, more robust staffing ratios and a modernized state-of-art facility. We are pleased to bring this litigation to final resolution and look forward to continuing our work to fully implement sweeping and radical changes for the better in the delivery of behavioral healthcare at Kings County Hospital.

On January 8th HHC lost a dedicated employee and a good friend to many of us -- Melvin Sprauve, a transportation coordinator at Central Office with 44 years of service with the Corporation. Melvin spent many years at Coler-Goldwater before coming to Central Office, where he served first as a driver and then as a supervisor. He was an exceedingly kind man and will be greatly missed.

• CUNY Healthcare Interpreter Program, Tiempo WABC-TV, 12/27/09
• Special Delivery Outside Jacobi Medical Center, News 12 the Bronx - TV, 12/29/09
• Dr. Kathy Chou at Jacobi Medical Center discusses Norovirus, News 12 the Bronx - TV, 01/08/10
• Jets Players Visit Woodhull Medical Center, WCBS-TV, 12/29/09
• Web Site Hopes to Activate Diabetes Patients in New York, Health Leaders, 12/15/09 (Also covered by Nursing Spectrum and Healthcare Informatics)
• One-on-One With Kings County Hospital Center Medical Director, Healthcare Informatics, 12/23/09
• Open wide: dentists now offer quick HIV tests, New York Post, 12/28/09
• Mammography clinic to open at Sea View, Staten Island Advance, 01/26/10
• HHC in New York City Tests Nearly 190K for HIV, Advance for Nurses, 01/01/10
• Gaining ground on the HIV Crisis, The Queens Courier, 12/16/09
• Pamela Akukuma, hubby Richard Amaa welcome baby - on curb outside Jacobi Medical Center, New York Daily News, 12/29/09
• Elmhurst Hospital breaks ground for women's pavilion, The Queens Courier, 12/29/09
• NY Hospital Queens revels in first baby born in 2010, Yournabe, 01/07/10
• Addiction program helps older adults, The Queens Courier, 01/20/10
• The Day Harlem Hospital Center Saved the Civil Rights Movement, The Positive Community, Winter 2009-10
• Minding Your Mind, The Positive Community, Winter 2009-10
• The Jets Come to Woodhull Hospital, The Greenpoint Gazette, 12/31/09