ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
FEBRUARY 18, 2010

Even though the earthquake in Haiti has receded in the media's attention, the desperate tragedy in Haiti is far from over and HHC staff continue to give generously of themselves and from their wallets to contribute to the humanitarian effort that is still so greatly needed. Financial contributions continue to pour into the HHC Foundation, whose Haiti Relief Fund exceeded $100,000 last week. A payroll deduction plan has been put in place to allow employees to make ongoing contributions automatically from each paycheck if they wish.

HHC's collaboration with LegalHealth continues to expand beyond Kings County Hospital, with a new legal clinic opening in Bellevue to advise Haitian members of the community about applying with the U.S. Department of Homeland Security for Temporary Protected Status (TPS). Another legal clinic will be launched at Queens Hospital at the end of February. LegalHealth's efforts may also be instrumental in obtaining TPS and Medicaid funding for up to 30 residents at Coler-Goldwater Specialty Hospital.

As I reported last month, more than 100 volunteers are ready to be part of an HHC team that may be deployed, as soon as Haitian and American authorities inform us that such organized assistance would be welcomed. Of course, a number of staff from across HHC have taken annual leave to go to Haiti on their own since the onset of the tragedy. A team of seven medical professionals from Woodhull, led by Dr. Francoise Jusma, went to Haiti during the last week of January, where they treated hundreds of survivors. They brought back some very compelling photos of the work being done by our staff and other volunteers. Their story and related photos were featured in the February edition of our HHC TODAY newsletter, which is published on our public web site.

In January more than 2400 participants from around the world attended the International Meeting on Simulation in Healthcare in Phoenix, and HHC simulation experts played a major role. Dr. Haru Okuda, Director for our newly launched Institute for Medical Simulation and Advanced Learning, moderated a standing-room-only roundtable discussion on "Using Simulation to Improve Patient Safety." Dr. Okuda also ran "Simwars”, a program he created using competitive simulation to focus on improving teamwork and communication skills. It was widely considered one of the most successful events of the conference, with more than 1200 participants over three days. Several individuals on Dr. Okuda's staff at HHC served as instructors during the conference.

Several HHC Hospitals were again honored by the American Heart Association and American Stroke Association's Get with the Guidelines program, which recognizes hospitals who rapidly and consistently provide the best evidence-based care in the areas of coronary artery disease, heart failure and stroke. Lincoln and Woodhull have received Gold Performance Achievement Awards and Elmhurst has received a Silver Award. The awards recognize our hospitals' commitment and success in achieving a higher standard of cardiac and stroke care for hospitalized patients. Hospitals that receive Silver or Gold awards are listed each year by AHA/ASA in U.S. News and World Report and in the professional journal Stroke.

The HHC system-wide mortality rate -- which has decreased significantly over the course of the last six years -- has remained comparatively low at 1.46% for 2009, as compared to the 2008 rate of 1.48%. We will be posting that data and hospital-specific mortality rates for 2009 on our web site shortly. We are validating our reported rates of central line infections and ventilator-associated pneumonia (VAP) for 2009 and will be posting those shortly as well. At the moment, our preliminary data suggests that VAP rates have declined further, after a decline of more than 80% in the last three years, and our central line infection rates have risen slightly, after a 65% decline over the last three years.

Embedded in the federal stimulus package enacted last February was $17 billion in Health Information Technology (HIT) funding to hospitals and physicians over a four year period starting in 2011. The legislation's intent was to jump-start the industry-wide adaptation of electronic medical records by both hospitals and doctors. The law calls for providers to "demonstrate meaningful use" of electronic health record (EHR) technology to qualify for funding. Beginning in 2015, the law mandates penalties to providers who fail to demonstrate meaningful use of EHR.

For HHC facilities, the estimated benefit from the hospital HIT provisions is $133 million from 2011 to 2015. Although physicians in private practice would also be eligible for HIT payments, the regulations offer no funding mechanisms for HIT for hospital-based physicians offering ambulatory care services. In our case, only those HHC doctors providing primary or specialty services at the six HHC Diagnostic and Treatment Centers would be eligible for HIT funding. In essence, the more than 1200 doctors employed by HHC or through our affiliates who provide “hospital-based” ambulatory care would not be eligible for this funding. The cost of creating or enhancing a hospital's ambulatory care EHR system, as distinct from its inpatient system, would not be funded at all under the proposed regulations. Nonetheless, despite the lack of funding, hospital ambulatory care divisions would still have to comply with the HIT regulation or face penalties. Due to this restrictive interpretation of the statutory language, an estimated 27% of doctors providing ambulatory care are not eligible for any payments to support their adoption of EHR technology. For HHC, the potential lost opportunity is an estimated $78 million over 4 years.

HHC, in conjunction with the Greater New York Hospital Association and the American Hospital Association, has been engaged in advocacy on this issue both nationally and with the New York Congressional Delegation. While we are hopeful that CMS will reconsider and include hospital-based doctors working in ambulatory care in the funding formula, we are simultaneously laying the ground work for a legislative fix. We have been emphasizing that CMS is erroneously neglecting the vast world of hospital based ambulatory care services. We have emphasized that many hospitals, especially those serving lower income communities, have large hospital-based ambulatory care divisions.

In a positive development, a Senate jobs bill introduced last week included a provision that would clarify that hospital-based physicians engaged in ambulatory care delivery would be eligible for the HIT stimulus funding. The Hiring Incentives to Restore Employment (HIRE) Act, was unveiled by Senate Finance Chair Max Baucus (Democrat, Montana) and ranking member Charles Grassley (Republican, Iowa). However, the status of this HIT funding provision is in doubt as Senate Majority Leader Harry Reid (Democrat, Nevada) has withdrawn his support from the HIRE Act.

On February 25th, President Barack Obama will be hosting a bipartisan healthcare summit for Congressional leaders. However, while Republicans have agreed to participate, it is unclear what impact the summit may have on actualizing health care reform.

Governor Paterson released his "21 day" amendments to the executive budget proposal last week. The changes reflected a $750 million deficit projection increase over what was initially released last month. According to the Division of the Budget, the increase was due in large part to lower than projected tax revenues and higher than projected spending growth associated with an increase in the Medicaid caseload. To offset the increase in the State's projected deficit, the Governor proposed to use the $1 billion in anticipated funding the State could receive if the 6-month FMAP extension is passed this year in Washington.

On the healthcare front, the budget amendments eliminated the redistributional aspect of the proposed indigent care pool distributional methodology so that only the $186 million cut to voluntary hospital funding remains. HHC's indigent care funding will not be affected by this proposal. In addition, the proposal to cut and redistribute Indirect Medical Education (IME) funds was eliminated. The elimination of the IME proposal will reduce the Executive Budget impact to HHC by $9.6 million to a new total of $68.6 million this year and $100 million when the proposals are fully implemented. However, the proposed increase to the payroll tax to fund the MTA will cost HHC an additional $5.7 million per year if it is accepted by the Legislature. It is unclear if the Legislature will approve this change. Both the Mayor and City Council Speaker spoke out strongly against the change which would increase the payroll tax on business in New York City while decreasing the tax on business in suburban counties in the MTA region.

We are continuing to advocate against the cuts with our state legislators and I will be traveling to Albany to participate in the HANYS Advocacy Day on March 3rd.

Mayor Bloomberg released the City's FY 2011 Preliminary Budget at the end of January. The plan seeks to close a projected $4.9 billion City budget deficit. This deficit could grow if the actions in the State Budget reduce funding to New York City. As proposed, the Governor's Executive Budget could cut an estimated $1.3 billion in funding. For HHC, we submitted a “Program to Eliminate the Gap” (PEG) proposal of $3.4 million for a debt service re-estimation in 2010 and $8.2 million in 2011. HHC will also be affected by pass-through cuts from DOHMH of approximately $1.2 million in FY 2010 and $1.3 million in FY 2011.

In addition to the PEGs listed above, City agencies were asked to submit contingency budget PEGs if the Governor's Budget proposals were enacted without modifications. HHC's contingency budget PEG would entail the elimination of the Sexual Assault Response Team (SART) Program that would save $1.2 million and also a delay in payment for inmate and uniform health services that would save $4.9 million.

Last year, HHC also received $7 million in funding from the City Council for Child Health Clinics ($5 million) and expanded HIV testing ($2 million) that was not base-lined in last year's budget. Neither amounts is in this year's proposed budget and this funding will need to be restored to avoid a potential reduction in services.

Two HHC nurses have received awards from the Nurses Association of the Counties of Long Island for their commitment and leadership in the profession of nursing. Gloria E. Qualles, RN, critical case manager at Queens Hospital Center, was presented with the Excellence in Nursing Practice Award. Elba Iris Rojas, PNP, RN, pediatric nurse practitioner at Kings County, won the Eleanor Molewski Mentoring Award. Congratulations to these nurse leaders for this recognition of their invaluable contributions.

• Dr. John M. Palmer, Executive Director of Harlem Hospital on Obama's Fight for Health Care Reform, Bet News-TV, 01/16/10
• Exposure to 9/11 Fumes Tied to Chronic Headaches, Health Day, 02/11/10 (Also covered in many other media outlets, including Discovery News, Business Week, US News &World Report, Modern Medicine, Bloomberg News, Medpage Today)
• Bronx hospitals clean up their act to lower infection rates in ICU, New York Daily News, 02/16/10
• HIV Managed Care Plans, Crain's Health Pulse, 02/16/10
• How to Get Your Doctor to Translate the Medical-Speak, US News, 01/29/10
• At Bellevue, a hospital reflects its changing world, Los Angeles Times, 02/15/10
• Families' funds finally making it to Haiti, New York Daily News, 01/31/10