ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
April 21, 2011

HARLEM AND BELLEVUE HOSPITALS SUCCESSFULLY COMPLETE JOINT COMMISSION SURVEYS

This month, The Joint Commission completed its triennial accreditation survey of both Bellevue and Harlem Hospital Centers. The survey team at each facility was painstakingly meticulous, reviewing over 290 Joint Commission standards related to patient care, patient safety, medication management, infection control, performance improvement, information management, the environment of care, national patient safety goals and governance. Each hospital demonstrated exemplary performance on this external validation of quality and safety.

We are enormously gratified that the surveyors continue to let us know how impressed they are with HHC's demonstrated commitment to performance improvement and safety. At both Harlem and Bellevue, the surveyors commented on the great communication between leadership and staff, the participation and collaboration of the medical staff in patient care, quality, safety and the survey process, and the commitment of the Governing Board and Community Advisory Board in facility activities.

Congratulations to Bellevue's Network Senior Vice President Lynda D. Curtis and Harlem Hospital Center's leadership, Network Senior Vice President Iris Jimenez-Hernandez and Executive Director Dr. John M. Palmer and all of their clinical, administrative and other staff for their hard work, commitment and excellent performance.

North Central Bronx and Woodhull hospitals and Coler Goldwater's nursing facilities and hospitals remain to be surveyed this year.

ALL HHC FACILITIES WIN PCMH CERTIFICATION

As we announced in late March, all our 11 hospitals and six large community health centers have now received medical home designation for delivering accessible, comprehensive and family-centered primary care to New Yorkers that aims to reduce avoidable healthcare costs over time. The special designation was granted by the National Committee for Quality Assurance (NCQA) to 616 primary care physicians who collectively care for nearly 100 percent of our primary care population of more than 477,000 adult and pediatric patients. All of the HHC facilities received "Level 3" designation, the highest ranking, which will qualify HHC for more than $15 million in Medicaid reimbursement rate increases every year.

We are planning our next phase of implementation starting with a kick-off scheduled for May 6th. All teams will collaborate in our remaining work to ensure that our medical homes truly function as reliable enterprise-wide operations where patients can expect to receive medical home quality services 24/7. Our kick-off is appropriately called The Rubber Hits the Road.

NORTH BRONX HEALTHCARE NETWORK WINS NAPH SAFETY NET AWARD FOR SAFE OBSTETICAL CARE

The North Bronx Healthcare Network has received a 2011 Safety Net Award from the National Association of Public Hospitals and Health Systems (NAPH) for Patient Safety. The project was sponsored by the Perinatal IHI Team of Jacobi Medical Center and North Central Bronx Hospital, led by Dr. Sue Gross, Chairman of the NBHN Women's Health Service. The OB/GYN team had a foretaste of this victory last month when they won the Grand Prize in HHC's corporate Patient Safety EXPO for their successful work to reduce adverse outcomes in labor and delivery through consistent and safe administration of the high-alert medication oxytocin, which significantly reduced the number of adverse incidents and delivery complications from shoulder dystocia and Erb's palsy. This national recognition is further confirmation of how important their work is to our patients and I offer them my heartiest congratulations.

FEDERAL LEGISLATIVE AND REGULATORY UPDATE

In the last few weeks, Congress and the President averted a government shutdown by adopting a one-week continuing resolution, which gave them time to agree on a funding bill for the remainder of FY 2011. They also began work on the FY 2012 appropriations and the future of entitlement programs and deficit reduction.

On April 8th Congress passed legislation to fund the remainder of FY 2011, which included $38 billion in cuts, including cutting over $2 billion from a program to establish co-ops (not-for-profit entities that would compete with private, for-profit health insurance companies), and defunding the $4 billion that would have allowed low-income employees to opt out of employer-sponsored health plans and, with a subsidy from the employer, buy insurance in the future exchanges.

On April 13th, President Obama, announced his plan to reduce the deficit by $4 trillion in 12 years or less that includes $480 billion in Medicare and Medicaid cuts by 2023. On the Medicaid side, the President would reduce spending by $100 billion over 10 years but very importantly stated his opposition to block granting the program. Regarding Medicare, his proposal would allow IPAB to promote "value-based benefit designs" and would count $50 billion in savings from patient safety initiatives. The President suggested the need for tax increases for higher income individuals.

On April 15th, the House passed a budget resolution for FY 2012 based on House Budget Committee Chairman Paul Ryan’s budget plan released the week before. Ryan cuts spending by over $4 trillion but uses almost all of the savings to offset tax cuts rather than reduce the deficit. His cuts include $1.4 trillion from repeal of the Accountable Care Act (ACA), including the mandated Medicaid expansions in that Act plus a savings of $771 billion by block granting Medicaid and restricting the federal funding for that program. Under his Medicaid block grant, all risk for the Medicaid population growth, health epidemics or other increases in the cost of health care would be borne by the states or localities. New York State could lose an estimated $90 billion if a block grant were enacted.

Ryan’s repeal of health reform does not repeal the ACA’s Medicare and Medicaid reductions, including the DSH cuts. As to the Medicare program, Ryan would change it to a premium support (voucher) program with smaller vouchers for higher income participants. The vouchers would be used to buy private insurance. These changes would affect those who are currently under age of 55.

STATE UPDATE

At our last Board meeting, I spoke about the pending approval of the State Budget and the Medicaid Redesign Team (MRT) proposals. As you have read, the State Budget was indeed passed on time, including 79 MRT proposals, and the outcome for HHC is in line with what we were estimating last month. At the moment, we estimate that HHC will lose approximately $131.5 million - mainly through a handful of rate reductions and more than a dozen other reimbursement or utilization changes. The major reductions include: a 2% cut across the board, the elimination of the trend factor for hospitals, nursing homes and home care agencies, as well as cuts to Medicaid managed care rates. Of the $131.5 million loss, HHC's facilities will see $67.7 million less in funding and MetroPlus will see a reduction of $65.4 million. On a positive note, while a $250,000 cap on non-economic damages was not included in the final deal, a medical indemnity fund for neurologically impaired newborns was created. We estimate that HHC will save approximately $4.4 million from this fund.

I want to caution everyone though that there are still many proposals included in the budget from the MRT whose effects or impacts have yet to be determined. Furthermore, this $131.5 million reduction in reimbursement will likely necessitate additional actions above and beyond the gap closing programs and restructuring initiatives that are currently underway.

APPEAL HEARD REGARDING STAFF RESTRICTIONS PROPOSED AS PART OF RESTRUCTURING PLAN

On Wednesday, April 13th, the Appellate Division, 1st Department, heard oral arguments on HHC's appeal of Justice Schlesinger's decision preventing HHC from laying off various trades personnel. The Court closely questioned advocates for HHC and three unions on the basis for Justice Schlesinger's finding that HHC had not made its layoff decision in a rational manner, and that the layoffs would negatively impact the health and safety of patients and employees. Appellate Division Justices also expressed concern about whether the courts should get involved in overseeing the decisions of public entities to reduce personnel during a fiscal crisis. HHC is optimistic that the Appellate Division will reverse the lower court's decision and permit HHC to implement the staff reductions in accordance with the Corporation’s carefully devised cost-containment and restructuring plan.

IMPLEMENTATION OF PEOPLESOFT CORE APPLICATION COMPLETED

The implementation of PeopleSoft, an industry-leading human capital management software application, was completed across all HHC networks last week. PeopleSoft is used by human resources staff across all HHC Networks, facilities and subsidiaries to manage employee benefits selection, competencies, licenses, training and development. With this final deployment, more than 41,000 employees, active and on-leave, are covered in the PeopleSoft system.

One of the benefits from PeopleSoft deployments has been the identification of employees who have had incorrect healthcare coverage. We have estimated annual savings from our first deployment to be $845,000 and work is underway to determine savings from the remaining four deployments.

Future phases of the PeopleSoft project include both Employee and Manager Self Service. Currently, the Human Resources restructuring initiative has estimated a $4.5 million savings by FY2013, by consolidating health benefits and background investigation functions. We will continue to look at other areas to leverage this system for greater efficiencies and savings.

CONSTRUCTION AND RELOCATION OF ENTERPRISE SERVICE DESK COMPLETE; IT CONSOLIDATION SCHEDULED FOR SUMMER COMPLETION

Renovation of a space on the 5th floor at Bellevue hospital Center has been completed and the HHC Enterprise Service Desk (ESD) has relocated there from its temporary location at 346 Broadway. This construction project was an enormous undertaking and provides the ESD with a scalable dedicated space as well as the technology needed to provide the best service possible to HHC staff.

The Enterprise Service Desk is a consolidation of all facility help desk functions, serving as a single point-of-contact and providing first level technical support 24/7 for all IT Services. Currently ESD is supporting Central Office and five networks with two remaining networks -- Central Brooklyn and North Bronx -- scheduled to be live by the end of June 2011. At this time, the Enterprise Service Desk is handling over 27,000 calls per month for service requests and is projecting over 40,000 calls when the service desk consolidation is completed.

Through the Enterprise Service Desk consolidation, we anticipate an annual savings of over $5 million, compared to what HHC would have spent if we still had multiple service desks. These projections are based on savings associated with the reduction of local IT work order systems, in-sourcing of contracted technical help, equipment purchases and better utilization of current processes.

HHC FACILITATES REGIONAL TRANSMISSION OF HEALTH RECORDS

Last month I mentioned that part of HHC's qualification to receive enhanced federal funding was dependent on demonstrating clinical exchange of information with one or more providers outside the HHC system. HHC has been working with the Interboro Regional Health Information Exchange (RHIO) to connect its facilities and various community providers, and to conduct at least one test of data exchange needed to demonstrate meaningful use of our health IT system. HHC Legal Affairs has worked closely with the Interboro RHIO to develop a consent form that meets HHC's requirements and allows for exchange of clinical data among providers; this has been submitted to the NYS Department of Health for approval. In addition, HHC has revised our Form for Consent to disclose health information for Treatment, Payment and Operations purposes that will facilitate the upload of patient records to the Interboro RHIO as the form is implemented across HHC. Four HHC facilities, Elmhurst, Queens, Woodhull, and Lincoln, as well as HHC Health & Home Care and MetroPlus are currently members of the Interboro RHIO and we expect the remainder of the HHC facilities to begin participation in the next 12 months.

Participation in the Interboro RHIO will assist HHC in terms of meeting the meaningful use criteria, and will also enable HHC to meet the requirements of the HEAL NY Phase 17 grant for Patient Centered Medical Homes (PCMH). It will also allow HHC to meet its requirements as an Accountable Care Organization (ACO), under the newly emerging payment model of CMS. Finally, participation in the Interboro RHIO will support the overall values and goals of HHC, especially in our advancement of opportunities to improve health care quality and safety and reduce costs.

HHC RECOGNIZES OUTSTANDING DOCTORS DURING DOCTORS' DAY

On Doctors' Day, March 30th, HHC honored 31 physicians for their leadership and commitment to advancing the mission of the public hospital system and to providing safe, efficient, quality healthcare to New Yorkers. Our doctors are driving performance improvements across our hospitals and health centers, and are helping to make HHC a national model of safe, efficient and patient-centered health care delivery. Included among the Doctors’ Day Award winners was a group of seven primary care community physicians who represent HHC’s growing relationship with doctors who serve outside the public hospital system and work closely to manage care to HHC patients. These doctors have embraced and advanced HHC programs to improve patient safety and the effective treatment of chronic diseases in children and adults, such as asthma and diabetes.

Winner of this year's President’s Award was Maurice Wright, M.D., Harlem Hospital Center Medical Director, who won the award for his outstanding leadership and for providing clear direction and stability for clinical staff in challenging times. The Physician Excellence Award went to Norma Keller, M.D, Bellevue Hospital Center, Chief of Cardiology, a nationally known expert on heart health for women, who was honored for her collaborative spirit and support to colleagues at other HHC hospitals. Twenty-nine other doctors were recognized, a diverse group of physicians from every borough who vary in age, education, years of service, and represent a variety of specialties from cardiology and pediatrics, to primary care and emergency medicine. Collectively, they represent the remarkable talent among the several thousand HHC doctors who are committed to excellence and deeply care about our mission to serve New Yorkers regardless of their ability to pay or immigration status.

HHC REACHES OUT WITH LIFE SAVING ADVICE TO PATIENTS AND STAFF FOR MOTHER'S DAY MAMMOGRAM CAMPAIGN

Through the month of May HHC will execute an education campaign to raise awareness about the benefits of mammograms. The campaign encourages women 40 years or older to get a mammogram every year. Traditionally, HHC's mammogram campaign has targeted the public-at-large. This year, HHC will focus on the health care of its employees and patients. The campaign's theme is "Mammograms Are a Family Affair" to promote prevention screening and early detection. The campaign will use posters in strategic locations throughout HHC facilities and postcards will be distributed to HHC patients and employees. A diverse group of HHC's employees are providing video and written testimonials about their experience with mammograms, which will be featured on the HHC website. Birthday cards will be mailed directly to the homes of female employees who will be turning 40 this year reminding them of the importance of annual mammogram exams.

HOUSE CALLS DIRECTOR WINS TOP DIABETES EDUCATOR AWARD

Susan Lehrer, RN, the Director of HHC's House Calls telehealth program, was honored by the Metropolitan New York Associate of Diabetes Educators with this year's Administrator of the Year award. The House Calls program, under Ms. Lehrer's direction, has helped more than 700 New Yorkers with severe diabetes to significantly lower their blood sugar levels, avoiding hospitalizations and trips to the emergency room. Using clinical readings transmitted to nurses via phone lines, the program teaches people with diabetes to manage their own treatment and costs about $3,600 a year per patient, less than the cost of a single day in the hospital or an emergency room visit. Please join me in offering congratulations to Susan Lehrer and thanks for her leadership of this innovative HHC program.

EXECUTIVE DIRECTOR OF HHC PROFESSIONAL AFFILIATE CO-AUTHORS MAJOR BOOK ON ACCOUNTABLE CARE ORGANIZATIONS

Dr. Marc Bard, the newly appointed Executive Director of HHC Affiliate PAGNY, has co-authored a widely heralded book on Accountable Care Organizations. The book does a good job in explaining why accountable care is the likely lynchpin of the coming transformation of our healthcare payment and delivery systems. It is a rich exposition that illuminates the path to a truly patient-centered health care system that is rational, effective and affordable. It also reveals that Dr. Bard's insights are closely aligned to HHC's strategic goals. We will make a copy of the book available to any Board member upon request, and I think you will find the work of Dr. Bard and his colleague Michael Nugent as inspiring as I have.

MEDICAL SIMULATION CENTER COMPLETES CONSTRUCTION AND LAUNCHES INTENSIVE TRAINING SCHEDULE

HHC's Institute for Medical Simulation and Advanced Learning -- IMSAL -- began settling into its state-of-the-art facility late last fall, tested its audio visual equipment, programmed its high fidelity mannequins and meticulously rehearsed scenarios in preparation for the Spring line up of courses.

Course delivery at the IMSAL began in January and went into full swing in February with Shoulder Dystocia skills and team training for OB teams. Each team consists of an interdisciplinary group of 10-12 learners, including OB nurses and doctors. The Jacobi/NCB OB team has already completed training, with 121 learners attending this course. The Metropolitan Hospital OB team training is under way; King’s County and Bellevue OB teams are scheduled to follow with Elmhurst and Queens Hospitals’ teams claiming schedule time in September 2011.

Two new courses, Advanced Airways and Team Code training courses have also been piloted this winter and are now being delivered on a regular basis. Both these courses combine skills and team communication training in critical care and use the full range of high fidelity mannequins and audio-visual technologies to enhance the learning and team debriefing experience. These courses have received the highest evaluation scores by doctors who have taken them and are now being regularly offered to our hospitals.

Finally, IMSAL’s mobile program continues to deliver its trademark Central Line Placement Course. The IMSAL team travels with 10 torso mannequins specifically designed to train learners to insert a thin guide wire and catheter into the jugular vein, which is then used to rapidly introduce essential medication to critically ill or injured patients. The team sets up a temporary skills training lab at each hospital and trains 18-20 learners at a time on this procedure. In 2010 over 900 learners attended the Central Line Training Course and we expect that this pace of training will continue into 2011.

In addition, IMSAL is ready to provide incoming residents with an intensive day of skills training this summer as it did in 2010. The training, which has come to be called Boot Camp Orientation for Residents, couples a morning session in Central Line Placement and an afternoon session in Basic Airways training. IMSAL is expecting to train over 500 incoming residents this summer in its Boot Camp series.

The IMSAL team is lean, consisting of one instructor and two simulation specialists, and IMSAL has taken steps to recruit and train adjunct instructors from our facilities. This past winter IMSAL sponsored an instructor course led by our mentor training program, the Harvard-based Center for Medical Simulation (CMS). The techniques learned at the CMS course were then used by the IMSAL team, which offered a subsequent Facilitators Course for 19 learners from HHC hospitals. Two of those learners went ahead to become adjuncts to IMSAL and will support our course delivery activities starting May 2011.

To date more than 1,400 learners have been trained by IMSAL. Evaluation of course content and instruction are consistently given the highest ratings by entry-level and experienced clinicians and clinical leaders at our HHC facilities. News is available on the training program's own public website at www.nyc.gov/hhc/imsal. Included in your packet today is our brochure describing the IMSAL program. I will conclude my remarks today by showing you a brief video which highlights this extraordinary program for the ongoing training of our healthcare professionals, and the outstanding contribution it provides for the safe and effective care of HHC patients.

HHC IN THE NEWS HIGHLIGHTS

• Harlem Hospital's burn unit, NY1-TV, 04/06/11
• 9/11 A Decade Later: Young Twins Still Suffer, NY1-TV, 04/13/11
• WTC Environmental Health Center, NY1-TV, 03/30/11
• Organ Donor Ceremony, News 12 Bronx-TV, 04/06/11
• North Central Bronx SART Program, News 12 Bronx-TV, 04/13/11
• Center for Prevention of Tuberculosis, Noticias41-TV, 03/24/11
• Queens Person of the Week: Clowning Around For A Good Cause, NY1-TV, 03/25/11
• Few Ailing Residents Seek September 11 Health Programs, WNYC-Radio, 04/05/11
• 17 Health-Care Facilities Get extra Medicaid Funds, The Chief, 04/04/11
• HHC Gets $15 Million Ranking, Crain's Health Pulse, 04/01/11
• NY, NY: It's a government town, Crain's New York Business, 04/12/11
• Rx: Read to Your Baby, The New York Times, 04/15/11
• Will Sing for Health Care, Parade/ New York Post, 04/17/11
• Healing with music, CarnegieHall, April 201
• An 'Enlightening' Concert Delights at North Central Bronx Hospital, Bronx News Network, 04/15/11
• Harlem Hospital Wins Most Honors for Outstanding Physicians, Harlem World Blog, 03/30/11
• Ground Zero kids: A terrible legacy, Metro, 03/30/11
• Vanished Towers Cast a Long Shadow on Kids' Health, The Battery Park City Broadsheet Daily, 03/30/11
• Doctors Offer 10-Year Check-Up to Children Exposed to 9/11 Toxins, DNAinfo.com, 03/29/11
• Clowns bring cheer to patients at Elmhurst Hospital, YourNabe.com, 03/24/11
• What's New at Area Hospitals, MD News, 04/12/11
• Dr. Muriel Petioni-Harlem's mother of medicine, The New York Amsterdam News, 03/30/11
• Experienced borough advocate appointed to city hospital board, Bronx Times Reporter, March 17-23, 2011
• Family thanks Jacobi, Bronx Times Reporter, 03/23/11