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Public Reports and Testimonies

Manhattan Annual Public Meeting
Bellevue Hospital Center
Tuesday, January 11, 2011

Remarks by Alan D. Aviles
President, NYC Health and Hospitals Corporation

Good evening, I am Alan Aviles, President of the New York City Health and Hospitals Corporation (HHC). Thank you all for coming tonight and best wishes for the New Year. This is our final annual public meeting for 2010. As always, I am eager to hear what HHC’s communities have to say about our performance, especially at this very challenging time in health care.

First, I want to recognize HHC’s senior executives here in Manhattan: our host this evening, Lynda Curtis, Senior Vice President of the South Manhattan Healthcare Network and Executive Director of Bellevue Hospital Center; Meryl Weinberg, Executive Director of Metropolitan Hospital Center; John Palmer, Executive Director of Harlem Hospital Center and Renaissance D&TC; Mendel Hagler, Executive Director of Gouverneur Healthcare Services; and Robert Hughes, Executive Director of Coler/Goldwater Specialty Hospital and Nursing Facility. I want to thank Lynda, Meryl, John, Mendel, and Rob and all the talented staff in their facilities for the stellar work they do every day caring for the residents of Manhattan.

I also need to acknowledge the critical support and guidance we receive from our Board of Directors, under the leadership of Dr. Michael Stocker. My special thanks to Board members who are here tonight.…… and to the members of our various Community Advisory Boards here in Manhattan, who advocate on behalf of our public system and work hard to keep us grounded and responsive to the needs of our patients and communities.

A year ago, I spoke at this meeting about the financial challenges that HHC faced. Dealing with these financial challenges has made this a very difficult year. More difficulties lie ahead, but with healthcare reform enacted, there is some light at the end of the tunnel, as I will explain.

Before I begin, however, let me stress the important role that we all must share, if we want to preserve the mission of our public hospital system. Despite these challenging economic times, we at HHC are absolutely committed to providing New Yorkers broad access to quality health care, and rendering that care in a way that reduces healthcare disparities and steadily improves the health of our communities. We ask in return that as government at all levels looks to reduce its own budget deficits you actively advocate for continued funding of our mission to serve all New Yorkers without regard to their ability to pay.

As the State’s budget gap grows -- and as future budget cuts threaten to undermine our system and our mission – I ask you to recognize that it’s your healthcare that is at risk and to stand with HHC in its advocacy efforts.


As you all know, the role that HHC plays throughout the City continues to be absolutely essential. Last year, HHC facilities served 1.3 million adults and children. We admitted about 225,000 patients into our hospitals, approximately 26% of them in our Manhattan hospitals. We provided outpatient care to another one million patients, 271,000 of them in Manhattan. We delivered 23,000 babies across the City. We provided one million patient days of skilled nursing facility care, more than three-quarters of them in Coler/Goldwater and Governeur. More than one-third of our patients – a total of more than 450,000 last year – were uninsured. Providing all of this care is extremely expensive; it now costs us roughly $6 billion annually.

The closure last year of St. Vincent’s and North General Hospitals further highlighted HHC’s importance as the last remaining healthcare safety net system in the City. Medical/surgical and psychiatric inpatient utilization increased at all three of our Manhattan hospitals after the closures. In addition, Bellevue and Harlem experienced an increase in the number of non-psychiatric emergency visits while the number of psychiatric emergency visits increased at Metropolitan. All of these HHC facilities have done an outstanding job contending with these surges in volume.

The last time we met, I told you that HHC faced an extraordinary budget shortfall of $1 billion as a result of the combined effects of rapidly rising costs in such areas as medications, medical equipment and employee pensions; hundreds of millions of dollars in cuts to our Medicaid reimbursement from the state and federal governments; and a dramatic increase in uninsured patients.

Late in 2009, I shared details of the $300 million cost-containment plan that we had launched earlier in the year. It included a sharp reduction of all discretionary spending, and improvements in revenue collection to capture every dollar owed to us from government payors and private insurance companies for the services that we provide and it included a commitment to reduce staffing levels through attrition. We have carried out that entire plan successfully and reduced our budget gap by about $300 million. These measures helped, but still fall short.

This past year, with the help of a consulting firm, our senior leadership completed work on a second plan to further reduce our budget gap without compromising our ability to meet the essential needs of our communities. I won’t go through all the elements of this second cost-containment and restructuring plan; it consists of 39 projects that we will complete over the next four years. To fully implement the plan, we must consolidate some programs, right-size some of our operations, contract for targeted support and technical services, close some low-volume clinics, and redesign the processes for admissions to and discharge from our long-term care facilities and modernize and restructure operations at Coler/Goldwater. The entire plan, when implemented, will reduce our budget gap by another $300 million. The plan was released in May last year and is available for review on our public website.

We have already begun to implement some of these proposals. Layoffs of central office staff, as well as some construction and plant maintenance staff, occurred before the end of 2010 and we also closed several small clinics. We reached out to all the patients served by these clinics to link them to alternative care either at another HHC facility or with available community providers, if that was the patient’s preference.

We regret that layoffs have become necessary to help address our budget deficit, especially at a time when alternative employment opportunities continue to be scarce. But, these are the difficult choices we have to make if we are to remain faithful to our mission, protect our core patient care programs, and prevent the need for a more drastic reduction or elimination of services.

Even after taking these painful actions, we still fall short of a balanced budget by hundreds of millions of dollars. Fortunately, our goal to stabilize HHC’s finances has been aided greatly by significant additional financial assistance -- in the amount of $350 million -- authorized by the Mayor and the City Council last year. We are grateful for this critical financial support, especially at a time when the City is struggling with a budget deficit of its own and has very limited flexibility. Without this City support, however, we would not have had the ability to target and phase-in the planned reductions and restructuring over a four-year period to minimize disruption to our delivery of care.

The gap closing actions on our part – both those already taken and those planned – will ultimately address only about $600 million of our projected $1.2 billion budget deficit. However, in addition to the $350 million in immediate financial support, the City has included in its financial plan an average of almost $300 million a year over the next several years which could be equally matched by federal funds under the supplemental Medicaid program. The State is working with us to obtain final federal approval of this additional funding. With this combined funding, we will have achieved a more secure fiscal footing for the next several years. We are grateful for this strong support of our safety net mission from all three levels of government.

As some of you have heard, we have also begun the long-term process of changing our relationships with our affiliate partners. This change will enable us to reduce the total number of different agreements we have to administer, and it will strengthen our ability to function as an integrated delivery system.

Last month HHC’s Board of Directors approved an affiliation agreement with the Physician Affiliate Group of New York, PC, (PAGNY), for the provision of physician services at Harlem Hospital and Renaissance Diagnostic & Treatment Center. Patients will, for the most part, find the same physicians continuing to provide services at Harlem under the new PAGNY contract. Under a new and different affiliation agreement, Columbia University will continue to support clinical teaching and supervision of medical residents at Harlem.

Health Reform

Turning to a brighter note about the past year, we finally saw the enactment of comprehensive healthcare reform. As a result, important insurance reforms are already taking place. For example, adult children will be able to remain on their parents’ insurance coverage up to the age of 26 and patients with pre-existing conditions will have access to more affordable insurance options.

However, most of the key provisions of the new health reform legislation begin in 2014 and it is projected that more than one million uninsured residents of New York State may become insured, either through an expanded Medicaid program or through new insurance options that will be made more affordable through federal subsidies.

Equally important, healthcare reform provides funding opportunities for healthcare delivery systems that are working to be more accountable for improving the health of their communities through comprehensive primary care, better coordination of care, and more effective chronic disease management. Such “accountable care organizations” may elect to work out arrangements with the federal government and the state to be reimbursed in ways that better support an activist approach to promoting health and preventing unnecessary hospital admissions. Our public hospitals and health centers here in Manhattan and across the City are well positioned for these opportunities because we have invested heavily in very comprehensive primary care services, including smoking cessation services, routine HIV testing, and the use of advanced information technology tools to help patients better manage their asthma, diabetes, hypertension, and depression.

Formal certification that our facilities are “patient-centered medical homes” is the foundation of HHC becoming a recognized “accountable care organization.” Our facilities, including most of our primary care sites, applied for certification as a “patient-centered medical homes” by the end of last year. Not only does the medical home designation establish that we are delivering primary care in the way that is most calculated to improve the health of our patients, but, importantly, achieving this designation for all of our primary care sites will increase our Medicaid reimbursement by roughly $15 million annually. Metropolitan, Harlem, and Gouverneur D&TC have already received formal designation as medical homes. With the exception of some of our smaller child health centers, applications for similar designation have now been submitted for our other facilities in Manhattan.

We also are pursuing opportunities under healthcare reform to capture additional federal funding to further promote our prevention and early screening efforts and to better manage the health of patients with multiple chronic disease, including mental illness and/or chemical dependency. It is gratifying that the federal government is finally looking to better align the reimbursement system to recognize the value of, and pay for, the health promotion and disease management activities that can lower long-term healthcare costs and that have been a central focus of our work in recent years.

Quality of Care Acknowledgements

And despite the uncertainty of what lies ahead with health reform and finances, there are some things that remain constant, especially our commitment to safely delivering high quality care and ability to attract and produce high caliber healthcare leaders. To that point, I am very proud to note that Dr. Nirav Shah, an internist here at Bellevue and a well-known researcher into the effectiveness of healthcare delivery systems, has been named Commissioner of the New York State Department of Health by Governor Cuomo. I know you all join me in congratulating Dr. Shah and in wishing him every success.

We at HHC are also very pleased about what became known as the "Christmas miracle" -- the passage of the James Zadroga 9/11 Health and Compensation Act to ensure federal healthcare funding for all those sickened by the aftermath of 9/11.

HHC began serving sickened community residents and area workers within a few weeks of 9/11 in the asthma program at Bellevue Hospital Center, and through community screenings in the Bellevue and Gouverneur asthma vans. At Bellevue, the initially small program for those suffering with 9/11 related symptoms and illnesses began to grow through patient enrollment and early philanthropic contributions.

A multimillion dollar commitment from the Mayor in 2006 enabled the small program to become the WTC Environmental Health Center which now serves more than 5,000 patients at three HHC locations, Bellevue, Gouverneur, and Elmhurst. In 2008, the WTC Environmental Health Center received a three-year $30 million grant from the federal government which will end this year. The Zadroga bill now ensures reliable consistent funding for at least 5 years with potential for a 6th year.

We are grateful to the entire New York congressional delegation and the many other elected officials who stood by us in support of the bill. A special debt of gratitude is owed to the Mayor and to Deputy Mayor Linda Gibbs and other city officials for their determination to obtain the bill’s passage. Most importantly, since its inception, the WTC Environmental Health Center has received unwavering support from its Community Advisory Committee, which includes representatives of numerous community-based organizations, unions, and residents’ groups, and especially from the Center’s patients, some of whom accompanied our staff to Washington to plead our case. All of this advocacy was critical important to the positive outcome.

I won’t itemize all of the achievements of our Manhattan facilities over the past year, but I do want to acknowledge that Harlem and Bellevue were each designated Bariatric Centers of Excellence this past year. This designation recognizes that both hospitals have comprehensive programs to provide safe bariatric care with excellent short- and long-term outcomes. In 2010, Harlem and Bellevue each performed about 200 bariatric surgeries.

In May of last year, there was a serious and uncharacteristic quality of care breach at Harlem as we discovered that a backlog of echocardiograms was either not read or not properly documented as read by physicians. Fortunately and miraculously, a subsequent review of all those test results by a team of cardiologists determined that no patients had suffered adverse consequences. However, this did not fundamentally alter the reality that what happened was inexcusable. We have since engaged in a thorough review and fundamental corrective action to ensure that such a potentially catastrophic failure cannot occur again.

More generally, all New Yorkers can be proud of the patient safety advances that have been achieved across our system over the last five years – and the data reflecting those achievements, including a dramatic reduction in hospital-acquired infections, are available on our website. The public can also view on our website a special four-part multi-media series, including video, highlighting our patient safety accomplishments over the last several years. It can be accessed by clicking on the flashing icon entitled “Believing” on our home page,

Capital Improvements

Capital improvements continue to be made at our Manhattan facilities. Last November, Bellevue opened a new 3,500 square foot children’s Comprehensive Emergency Psychiatric Program that will provide an optimal environment in which to treat 1,500 children and adolescents annually.

At Harlem Hospital Center, work is progressing on the new Patient Pavilion on Lenox Avenue. This building is the centerpiece of the modernization of Harlem. It will house diagnostic suites, operating rooms and critical care units and connect the MLK and Ron Brown Pavilions. The project will be completed in 2012.

The modernization project at Gouverneur is also continuing. This project entails a significant renovation of the existing building and construction of a new addition for ambulatory services. When the project is completed in 2013, Gouverneur will not only offer expanded comprehensive primary and specialty care services but it will also provide residents of the skilled nursing facility with state-of-the-art services in as home-like an environment as possible.

HHC had been planning a major modernization and consolidation of Coler/ Goldwater when the closing of North General Hospital was announced in 2010. HHC immediately began working with the City, the State Department of Health, the Dormitory Authority of the State of NY, North General Hospital leadership and other stakeholders to develop an alternative proposal that would include the relocation of the services at Goldwater, both long-term acute care beds and skilled nursing facility beds, to the North General site. This alternate plan, which includes an upgrade of the Coler facility, reduces the cost of our original modernization plan by more than $200 million while creating a stateof-the-art replacement facility and preserving the North General campus as an important health care resource for the Harlem community. The State Department of Health has now approved the Certificates of Need for this project and we can now proceed to the design phase of this important Capital initiative.

Continued Focus on Improving Efficiency

Having begun my remarks with a focus on our financial challenges, let me conclude by returning to them. Although we are implementing a cost-containment and restructuring plan that addresses our immediate financial crisis, we are facing a future where there will be relentless efforts by government to reduce the spiraling costs of healthcare services, especially those such as Medicaid that are subsidized by taxpayers.

Our new governor faces a projected $10 billion state budget deficit for the coming year. Medicaid is the second-largest part of the state budget – after education – and Governor Cuomo, in his State of the State speech last week, called for “a fundamental restructuring of Medicaid.” He proposed to bring together relevant stakeholders in a team that could offer program reform alternatives to the customarily reimbursement cuts of the past. Nonetheless, at least in the short term, further significant Medicaid cuts are expected. Because the City continues to face its own multi-billion dollar deficits, we cannot expect our city government to make up for any further state cuts that may be imposed on us.

All of this underscores the importance of our pursuing an ongoing and methodical approach to continuously making our hospitals, nursing homes, and health centers as cost-efficient as possible. Over the past four years, we have been working on training our staff how to do this using an approach that has been very successful in other industries. Others call this approach LEAN, but we have adapted it to our own use and we call our version Breakthrough.

Breakthrough is a highly effective method of engaging all levels of staff to identify inefficiency and waste and to help develop sustainable solutions to improve the work processes that they know best. Breakthrough helps to improve quality by standardizing work and by eliminating effort that does not add value for the patient. It is also a very effective way of developing our workforce by empowering staff at all levels to identify improvements that they agree should be made and then to support them in working together to make those changes.

Since we began to use Breakthrough in 2007, more than 2,500 employees have participated in more than 500 Rapid Improvement Events (RIEs). We estimate that Breakthrough has yielded about $110 million thus far in additional revenue and reduced expenses, most of which is already included in our $600 million four-year plan.

Bellevue launched its first Breakthrough rapid improvement event in 2008. Since then, it has realized nearly $18 million in savings and new revenue, and has increased the efficiency in its operating rooms enabling it to accommodate more surgeries.

Gouverneur has also had considerable success with Breakthrough. Improvements to check-in, coding, and documentation have yielded more than $2 million in new revenue. A review of its call center flow and appointment scheduling reduced vendor bills by 78%, increased the productivity of appointment schedulers by 80%, and reduced scheduling errors in the Department of Medicine from 11% to 1%. With these improvements patients now get easier access to their doctors and physicians make more efficient use of their time.

Metropolitan also adopted Breakthrough in 2008. Since then, they have increased annual inpatient revenue by $4 million largely through improved clinical documentation. In addition, by focusing on what needed to be done to make their behavioral health services a Center of Excellence, Metropolitan has increased inpatient psychiatry discharges by 48%, reduced the average length of stay in psychiatry by 34% over two years, and increased outpatient mental health visits by 49% over two years.

We believe that the effective use of the Breakthrough improvement approach across our large system leverages the talent and experience of our workforce and can help us contain the rise of healthcare costs and mitigate the impact of reduced funding.


All our facilities in Manhattan excelled this year responding to changes in the healthcare landscape, including the closure of important community hospitals, while maintaining a standard of care that rivals that of any healthcare system in our city. I am proud that our HHC facilities here in Manhattan and their dedicated staff members so effectively represent our public system’s commitment to our patients and our communities.

But, even as I applaud our work in Manhattan, I must again sound this note of concern: the challenges we face are far from over and are likely to increase. For this reason, we must work together to advocate vigorously to ensure HHC’s ability to carry out its noble mission now and in the future.

Thank you for your attention. I now will turn the program over to Mr. Russo. I look forward to hearing your comments.

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