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

SUCCESSFUL JOINT COMMISSION SURVEY AT ELMHURST HOSPITAL

Last week, Elmhurst Hospital Center was surveyed by The Joint Commission. Elmhurst is the last HHC hospital scheduled for a survey this year. The surveyors were very impressed with the hospital and staff, and noted how services provided were sensitive to the needs of a multicultural community. They gave kudos to a number of "best practices," including the Crisis Intervention Team in Psychiatry and the Malignant Hyperthermia Program’s Code HOT, which requires a rapid response to anesthesia emergencies within five minutes. Network Senior Vice President Ann Sullivan, Elmhurst Executive Director Chris Constantino, and all of their staff are to be commended for their survey performance.

On Monday, December 13th the HHC’s Joint Commission Survey Team Leader Ellen Rhodes will return to HHC to provide an official summation on our multi-hospital survey. At the summation, she will provide an overview of HHC's survey performance this year, with comparative national survey data for 2010. She will also acknowledge best practices identified by the survey teams, and Corporate-wide opportunities for improvement. Members of the Board of Directors will be invited to participate in this session.

In 2011 Bellevue, Coler-Goldwater, Harlem, North Central Bronx, Queens and Woodhull hospitals are scheduled to be surveyed by The Joint Commission.

GOVERNOR-ELECT NAMES HHC LEADER LaRAY BROWN TO HEALTHCARE TRANSITION TEAM

On Tuesday, Governor-elect Cuomo announced that his healthcare transition team will include LaRay Brown, Senior Vice President of Corporate Planning, Intergovernmental Relations and Community Health. She will be part of a committee of distinguished healthcare executives from throughout New York State. Mr. Cuomo, in making his announcement, stated, "I am confident that, with the transition committees we have assembled, we will bring the best and brightest minds into State service." The committee will recruit, review and recommend talented candidates for key top-level health positions in the Governor's new administration. The Governor-elect has chosen a very experienced and knowledgeable advisor in LaRay Brown. Congratulations to her for this well-deserved honor and opportunity.

MORE HHC FACILITIES ARE CERTIFIED AS PATIENT-CENTERED MEDICAL HOMES

The National Committee for Quality Assurance has now recognized Metropolitan Hospital, Coney Island Hospital and Morrisania Diagnostic and Treatment Center as Level 3 Patient-Centered Medical Homes, bringing the current total for HHC to 10. The designations will ultimately qualify HHC for as much as $15 million in enhanced Medicaid reimbursement rate increases, after, if as expected, all of our primary care sites receive the NCQA certification by early 2011, as expected. In addition to our 17 hospitals and diagnostic and treatment centers, 26 of our community-based health centers will also be applying for the designation.

MEDICAL SIMULATION CENTER COMPLETED

In early October, three years from the inception of HHC's Institute for Medical Simulation and Advanced Learning -- IMSAL -- the construction of HHC's simulation center was completed. Over the next several months, during the testing phase of the center, the IMSAL staff will be setting up equipment, training our staff, and troubleshooting the simulation space, simulators, and audiovisual technology in order to ensure an optimal learning environment and experience. During this time, IMSAL continues to offer courses including the placement and maintenance of central lines, airway management, and obstetrical techniques for avoiding shoulder dystocia. Staff also are developing new courses aimed at improving teamwork and communication. Local clinical leaders and their staff will be invited to visit the center during its testing phase in the coming weeks.

BELLEVUE OPENS PEDIATRIC PSYCHIATRIC EMERGENCY ROOM

On November 3rd, HHC announced the opening of a new Children’s Comprehensive Psychiatric Emergency Program at Bellevue Hospital, the first of its kind in a city public hospital and only the second Children’s CPEP in the city and state. The 3,500 square foot unit will serve 1,500 children and adolescents annually. The $1.1 million unit has been designed to provide an optimal environment for the evaluation and treatment of psychiatric crises, including suicidal or aggressive behavior, depression, psychosis, and dangerous family conflicts. The Children’s CPEP will be fully operational in late November. In the past 15 years, Bellevue has experienced a fivefold increase in the number of children and adolescents coming to its ERs in psychiatric crisis. The new CPEP offers a discrete space that meets safety standards for psychiatric patients and provides a 24 hours-a-day/7 days-a-week staffing by adolescent psychiatrists, nurses and social workers.

CONEY ISLAND HOSPITAL OPENS NEW PALLIATIVE CARE UNIT

On Tuesday this week, Coney Island Hospital announced the opening of a new dedicated 19-bed Pain and Symptom Control Palliative Care Unit, which expands the existing service and delivers unit-based coordinated care to patients with serious advanced disease, life threatening or debilitating illness. The new unit has been re-designed with families in mind and allows a family member to room-in with their loved one. HHC was one of the first public safety net systems in the nation to develop Palliative Care services, and Coney Island Hospital was an early leader in recognizing the value of palliative care. More than 5,000 families have received Palliative Care services at Coney Island Hospital since 2005.

JACOBI RECEIVES PATIENT SAFETY AWARD FROM
LEAPFROG GROUP AND NY BUSINESS GROUP ON HEALTH

Earlier this week, Jacobi Medical Center was the only New York metro area hospital to receive a significant patient safety award -- the Award for Most Improved Performance in Patient Safety and Quality from the New York Business Group on Health in collaboration with The Leapfrog Group. Jacobi was selected because of the great strides it has made in achieving many of the hospital quality and safety practices designated by The Leapfrog Group as important to patient safety. Particularly mentioned were Jacobi's high-risk delivery processes and intensive care unit staffing by physicians experienced in critical care medicine. The New York Business Group is a non-profit coalition of 175 employers, and The Leapfrog Group is an employer-backed health advocacy organization. Congratulations to Bill Walsh and his staff at Jacobi for this outstanding achievement.

CONFERENCE AT KINGS COUNTY HOSPITAL HIGHLIGHTS
BEST PRACTICES IN TREATING AND PREVENTING DOMESTIC VIOLENCE

Kings County Hospital partnered with the Urban Resource Institute (URI) to host a one-day conference on Domestic Violence on November 4th. The theme was “Bridging the Gap: A Health, Mental Health and Community Response to Domestic Violence,” and it featured keynote speaker Dr. Kathryn Laughon, Associate Professor Nursing at the University of Virginia School of Nursing and a Robert Wood Johnson Nurse-Faculty scholar. The event had approximately 230 attendees, including medical, legal and law enforcement professionals, domestic violence survivor advocates, social workers, and community members from across New York City. The conference was the culmination of an important year-long collaboration among the hospital, URI and many community-based organizations, as well as the Brooklyn DA's office, NYPD and NYFD-EMTs.

FOURTH ANNIVERSARY OF SUCCESSFUL HOUSE CALLS TELEMEDICINE PROGRAM 
TREATING DIABETIC PATIENTS

On November 3rd, HHC's House Calls telemedicine program, a program developed by HHC Health and Home Care and supported by MetroPlus, celebrated its fourth anniversary. Since the program's inception in October 2006, a team of specially trained nurses have worked with over 600 diabetic HHC patients who transmit their blood sugar and blood pressure readings daily over their phone lines. Patients develop strong bonds with the House Calls nurses who provide real-time expert health coaching and education to participants in the privacy of their own homes. More than 70% of patients in the program over six months have achieved reductions in their Hemoglobin A1c levels, as the result of making significant improvements in self-management. Congratulations to Health and Home Care Executive Director Ann Frisch, program director, Susan Lehrer, RN, the House Calls nurses and the many HHC healthcare providers who continue to participate in this successful program.

NEGOTIATIONS COMPLETED FOR ACADEMIC AFFILIATION AGREEMENT WITH COLUMBIA

HHC has completed its negotiations with Columbia University and has entered into an Academic Affiliation Agreement. The agreement will allow Columbia to continue its collaboration with HHC in training residents, medical students and other healthcare professionals at Harlem Hospital Center. This agreement allows HHC to maintain and promote academic excellence at Harlem to render broader, better service to our community. Among other things, this agreement allows the current staff to retain their faculty appointments at Columbia and specifies a process to appoint additional staff as needed. There is no compensation associated with this academic affiliation agreement.

As I have discussed previously, a separate agreement with Physician Affiliate Group of New York, P.C. (PAGNY), to provide physician services at Harlem Hospital (through the continued employment of the current Harlem physician workforce) will also be brought through the normal Board process for review and approval in December.

PROPOSED HHC STAFF TRANSFER TO HEALTH DEPARTMENT
FOR ASSISTED OUTPATIENT PROGRAM

On today's agenda for your review is the transfer to the NYC Health Department of HHC staff who are engaged in the administration of the assisted outpatient treatment program (AOT). HHC and the Health Department have jointly operated the AOT program since its inception in 1999. At this time, HHC and the Health Department agree that the transfer will create a more efficient program, particularly since the Health Department already administers another city-run program with a similar focus. I urge your support for the transfer which will be seamless to the patients that it serves.

FEDERAL UPDATE

The Mid-Term Congressional elections have dramatically changed the dynamics of both the House of Representatives and the Senate. In the Senate, Democrats will still maintain control with 51 seats plus the two Independents who caucus with them. Republicans picked up six seats and will have 47 in January. In total, there are 16 new members of the Senate.

It is expected that Senate Majority Leader Harry Reid (D-Nevada) and Senate Minority Leader Mitch McConnell (R-Kentucky) will retain their positions. One change to note: Sen. Orrin Hatch (R-UT) will replace Sen. Chuck Grassley (R-IA) as Ranking Member on Senate Finance, with jurisdiction over taxes, Medicare and Medicaid.

In the House, Republicans have won at least 60 additional seats and will assume control in January with 239 Republican members to 189 Democrat members, with seven seats, including one in New York -- still too close to call. Also, there will be at least 92 new House Members.

The current Minority Leader John Boehner will become Speaker of the House. With the change in party control comes change in committee chairmanship. All committee chairs will shift from Democrats to Republicans. The key committees include: Energy and Commerce, with jurisdiction over Medicaid; Ways and Means, with jurisdiction over Medicare and taxes; and Judiciary, with jurisdiction over immigration.

New York State's Congressional delegation will have at least six new Republicans, with one race still undecided. New York City has a new Republican Member - Michael Grimm of Staten Island, who defeated Congressman Mike McMahon. Grimm will be the only city Congressman in the House majority. Including the two New York Republican incumbents, Peter King, who is expected to become Chair of the Homeland Security Committee, and Christopher Lee, there will be at least eight Republicans in the New York State congressional delegation.

A lame duck session of Congress was convened on November 15, 2010. New York City's and HHC's priority for the session is Senate passage of the September 11th health bill, although this is very unlikely. During the session, Congress may enact the FY 2011 Appropriations bills -- the Federal Fiscal Year started October 1st -- or pass a Continuing Resolution through February and let the new Congress deal with all the funding bills. One issue that the lame duck session will definitely need to address is the Medicare Physician Reimbursement rate. On December 1st, the rate will drop 23% unless Congress takes action. It is likely that Congress will pass a one or two month fix and "bump" the issue to the next Congress. A long term solution could cost more than $300 billion over 10 years.

Looking ahead to the new Congress, despite all the rhetoric out there about “repeal and replace” it would be very difficult to outright repeal health reform given that President Obama would veto any such legislation. Also, if some States refuse to implement aspects of health reform, as many have threatened, the law allows HHS to set up exchanges for any recalcitrant state. Another avenue of attack would be to defund health reform administratively. As an example, it is estimated that over the next 10 years HHS and the IRS will each need $5 to $10 billion to enforce the individual mandate. It is possible that Congress could refuse to appropriate these funds. However, the vast majority of funds needed for health care reform are already appropriated.

STATE UPDATE

Turning to Albany, as you all know Andrew Cuomo was elected Governor, Thomas DiNapoli was elected Comptroller and Eric Schneiderman will be the new Attorney General. The real issue in Albany is that control of the State Senate is up in the air with three races still too close to call. Previously, the Democrats held a slim 32 to 30 advantage. At the moment, Republicans will have at least 30 members in January and Democrats will have at least 29. In order to have a majority, at least 32 members are needed. Depending on the outcome of the three contested races, the possibility exists that there would be a 31 to 31 tie. Since a tie has not happened before, it is not exactly clear all of the circumstances under which a tie breaking vote could be cast by Lt. Governor-Elect Bob Duffy. Whether the Lt. Governor is empowered to vote only on procedural matters or also on legislative matters is going to be open to interpretation under the State Constitution. There is also the potential that some form of power sharing agreement could be reached by the Senate but most Albany insiders consider the chances for such an agreement remote.

In the Assembly, Republicans made some gains but it's not enough to change party control. Depending on the outcome of a handful of contested elections, the Republicans may have picked up enough seats to deny the Democrats a veto-proof majority, which would be 101.

Regardless of party affiliation or majority/minority party status, each one of New York's elected officials faces a tough year ahead. Starting out, Governor-elect Cuomo will have to put together an executive budget proposal that closes a budget gap that is estimated at more than $9 billion, and rising, for state fiscal year 2011-2012. In addition, the State Division of the Budget is estimating that the current budget is now out of balance by approximately $315 million, while the State Comptroller estimates the current gap to be closer to $1 billion. Governor Paterson has indicated he would like to close the gap by an across the board spending cut of 1%. It is not clear whether the Legislature will grant him that authority or wait and deal with the issue after January 1st.

Governor Paterson has called for a special session of the Legislature on November 29th. It is expected that he will ask the Legislature to address the budget gap, distribution of new Federal education funding and other issues.

CITY BUDGET FOR COMING FISCAL YEAR SEEKS FURTHER CUTS FROM HHC

New York City's November Plan includes a Program to Eliminate the Gap (PEG) which requires a reduction in general City support for agency programs of 5.4% in Fiscal Year 2011 and 8% per year beginning in Fiscal Year 2012. Based on HHC's base of $86 million of City support, the Corporation’s reduction target is $4.6 million for Fiscal Year 2011. In Fiscal Year 2012, HHC’s base is $110 million which increases the targeted reduction to $8.8 million for that year and beyond.

These targets will be achieved through improved management of the use of outside counsel for medical malpractice cases, the elimination of the Sexual Assault Response Team (SART) program starting in Fiscal Year 2012, and a reduction of the City subsidy which helps support the overall operations of the Corporation.

In addition, HHC will also be affected by $3.3 million of reductions from the Department of Health and Mental Hygiene’s PEG program in Fiscal Year 2011 and $4.8 million per year beginning in Fiscal Year 2012. These cuts will reduce the funding for Mental Health & Chemical Dependency Services, Child Health Clinics, Outpatient Pharmacy and Rapid HIV Testing & Assessment Services.

The combined PEG programs will result in a total reduction of $7.9 million in Fiscal Year 2011 and $13.6 million per year beginning in Fiscal Year 2012.

RxART INSTALLS ARTWORK IN GOUVERNEUR, KINGS COUNTY, BELLEVUE

A new installation of photographic art was unveiled last week in the Adolescent Behavioral Health unit at Kings County Hospital. The artwork, installed by non-profit organization RxArt, features active, positive images to promote healing and inspire patients, families and staff. RxArt is a non-profit organization dedicated to placing original fine art in patient, procedure and examination rooms of healthcare facilities. The organization, which enjoys significant friendships with emerging and established artists, is celebrating its 10th anniversary. Earlier this year RxArt installed a significant collection of contemporary art in the Pediatric and Women's Health Departments at Gouverneur Healthcare Services. Next, the organization is planning an installation of artwork by internationally acclaimed artist Yoshitomo Nara in the newly opened pediatric CPEP at Bellevue. We look forward to a very fruitful partnership with RxArt and are pleased that we can join with them to ensure that the care we provide to our patients includes an uplifting environment of beauty and hope.

STAT! EVENTS FEATURE HIGH-PROFILE ENTERTAINERS
TO RAISE FUNDS FOR HHC HOSPITALS

As I mentioned in my report last month, from December 5th to 12th, HHC and the HHC Foundation are presenting STAT! For New York City's Public Hospitals!, a week-long series of music and art events that will both celebrate and benefit the work of our public hospitals and healthcare facilities. The series of events was conceived by longtime philanthropic supporter Hank Carter and by the HHC Foundation, which works to provide funds and equipment to our hospitals when existing programs need help. The STAT! series of events will benefit New York City’s public healthcare facilities and raise awareness about what our facilities are and what they do for New York. Proceeds will be used to acquire medical equipment and technology for each hospital. The events planned for each borough feature a plethora of well-known performing artists, such as the Grammy-nominated "Princess of Salsa" India, Salsa sensation Frankie Negron, Haitian Kompa singer Alan Cavé, Grammy-winning Gospel superstar Rev. Hezekiah Walker and the legendary Temptations. Tickets are available on the STAT! website at www.stathhc.org. A special discount is available to HHC employees.

HHC IN THE NEWS HIGHLIGHTS

• New Pscyh Unit for Youth to Open At Bellevue, NY1- TV, 11/03/10
• Neonatal Babies Reunite at Queens Hospital Center, NY1 -TV 10/28/10
• Artist Access Program at Woodhull Hospital, News 12 Brooklyn - TV, 11/10/10
• Cholera Warning, Kings County Hospital, NBC – TV, 11/16/10
• Breast Cancer and Latina Women, Lincoln Hospital, WNBC-TV, 10/30/10
• Emeline Michel Performs at Jacobi Medical Center, News 12 Bronx - TV, 11/10/10
• NY City Councilman Mathieu Eugene talks about Haiti and Kings County Hospital, ABC-TV, 10/31/10
• Bronx shooting victim Vada Vasquez speaks out one year later, New York Post, 11/14/10
• Bellevue Hospital's new $1.1M unit to tackle growing epidemic with psychiatric unit for kids, New York Daily News, 11/03/10 (Also covered in Newsday, USA Today, Crain’s Health Pulse, and Associated Press)
• Jacobi's Data Central for HHC, Crain's Health Pulse, 11/01/10
• Respecting Muslim Patients’ Needs, The New York Times, 11/01/10
• Artists Exchange Creativity for Medical Care, The New York Times Blog, 11/03/10
• Lincoln Hospitals' Breast Imaging Center of Excellence, The Bronx Times, 10/29/10
• Jacobi's addiction treatment center opens 'Transition Threads' clothing store, Bronx Times Reporter, 11/03/10
• $5.5 Million Grant to Expand Mental Health Services in Bronx, Nursing Spectrum, 11/08/10
• Healing the scars of torture, The Lancet.com, November 2010
• Dermatologist offers physical, mental relief to patients, Dermatology World, October 2010
• Chainlinks: Recycle a Bicycle's Kids Ride Club, Metro, 10/26/10