Good evening, I am Alan Aviles, President of the New York City Health and Hospitals Corporation, our City’s public hospital and healthcare system. Thank you for being with us tonight for our Manhattan annual public meeting for FY2012, the final of five borough-specific meetings we convene each year. As always, I am eager to hear what HHC’s communities have to say about our performance, especially during what continues to be a very challenging time in healthcare generally and for HHC specifically.
At the outset, let me recognize HHC’s senior executives here in Manhattan. Our hosts this evening are Iris Jimenez-Hernandez, the Senior Vice President of the Generations + Network and Denise Soares, the Executive Director of Harlem Hospital Center and the Renaissance Diagnostic & Treatment Center. Also in attendance are Lynda Curtis, the Senior Vice President of the South Manhattan Network and Executive Director of Bellevue Hospital Center, as well as Meryl Weinberg, Executive Director of Metropolitan Hospital Center, Robert Hughes, Executive Director of Coler-Goldwater Specialty Hospital and Nursing Facility and Mendel Hagler, Executive Director of Gouverneur Healthcare Services. I thank all of them for the excellent work they and their staffs do every day to render the best possible healthcare to the residents of Manhattan.
I also want to acknowledge the support and guidance of 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 Harlem, Bellevue, Gouverneur, Metropolitan, Renaissance, and Coler and Goldwater Community Advisory Board members who advocate vociferously on behalf of our public system and keep us grounded and responsive to the needs of our patients and the communities we serve.
I begin my remarks tonight by focusing on the financial challenges that continue to face HHC. Last year, I stressed that deep Medicaid cuts, skyrocketing pension costs, and a steady increase in our uninsured patients had all contributed to a daunting budget deficit of more than $1 billion dollars. At this time last year, I was able to say that we had put together the second phase of a comprehensive cost-containment and restructuring plan, which together with earlier cost-savings measures and substantial additional funding from the City, would largely close our existing budget gap over a four-year period.
We are in the second year of our four-year restructuring plan. When fully implemented, our plan initiatives will yield several hundred million dollars in new revenue and cost savings. However, as we have seen again this past year, the plan requires a number of necessary but painful actions. We achieved our savings targets for the fiscal year that ended on June 30, and I am confident that we will successfully execute the next set of plan initiatives and achieve targeted savings for this fiscal year as well. As of the close of fiscal year 2011, we had reduced our workforce by approximately 2,500 employees mostly, but not exclusively through attrition. We anticipate shedding another 600 positions by the end of this fiscal year and reducing our expenses by about another $38 million.
The cost containment and restructuring initiatives that remain to be implemented as part of our overall plan can be reviewed in some detail on our public website.
Even as we make steady progress in closing the budget gap that I described last year, we have seen more financial challenges arise. Medicaid cuts in the current state budget that became effective April 1, 2011, were again deep and sharp. They will reduce HHC’s total revenue by another $170 million, bringing our total Medicaid cuts over the last four years to roughly $500 million annually. Our pension costs continue to rise sharply and may increase by as much as $100 million this year, bringing our pension costs to more than $400 million. By comparison, just eight years ago our pension costs were less than $50 million. Additionally, we have seen a 6% increase in the number of uninsured patients we serve, bringing the total number of uninsured patients served in fiscal year 2011 to nearly 480,000.
And, of course, all of this is occurring in the context of the continuing, severe economic downturn. Because of declining tax revenues associated with persistently high unemployment rates, both the City and the State are projecting multi-billion dollar budget deficits for the upcoming fiscal year. The State proposes to continue a cap on Medicaid spending that will result in more provider cuts. And the City has already directed all City agencies (as well as HHC) to reduce their expenditure of City funds by 2% for this fiscal year and 6% for next fiscal year. For HHC, these new City budget cuts will mean $1.6 million less revenue this year and $4.6 million less next year.
At the federal level, both political parties are focused on reducing a federal debt that now stands at $15 trillion dollars and both parties have expressed a willingness to make further significant cuts to the Medicare and Medicaid programs. The failure late last year of the Congressional “Supercommittee” to reach agreement on deficit reduction measures has likely spared us from further federal Medicaid cuts for the moment, but the Committee’s inability to agree triggers automatic Medicare cuts that will take effect on January 1, 2013. Those cuts will reduce HHC’s Medicare revenue by an estimated $20 million.
And under the federal health reform law, in 2014 the federal government will begin dramatic reductions in the supplemental Medicaid and Medicare funding that supports public hospitals and other safety net institutions. Ultimately, these scheduled cuts could reduce HHC’s federal funding by more than $325 million annually. And there is very little prospect of Congress re-visiting the wisdom of these looming, devastating cuts.
I dwell on this litany of financial challenges not to depress everyone in the room, but because the magnitude of the present threats to our mission arising from sharply rising expenses in the face of falling revenues is unprecedented. It is important for our communities to understand what we are up against, and why we have resorted to measures such as targeted layoffs, the closure of some small community clinics, and the outsourcing of certain services when such outsourcing lowers our expenses. And it is important that our community and all of our partners understand the severity of our fiscal dilemma and the advocacy required by all of us to preserve HHC’s mission and enable us to continue to meet community needs.
I know that there are those in the audience who are concerned about the outsourcing that we have done to date, including laundry services, and the management of dietary and housekeeping services. I must emphasize, however, that we have moved forward with outsourcing only after careful analysis has demonstrated that we could achieve significant savings.
We are projecting that the outsourcing of laundry services and the outsourcing of housekeeping management will save us about $242 million over the next nine years. All three of the outsourcing initiatives implemented thus far have been achieved without laying off a single unionized staff member. Also, we have been open to “insourcing,” that is, the hiring of additional directly employed staff to replace contracted workers where our analysis shows that it will save money. This past year we hired 48 new staff to do work in information technology previously performed by contracted vendors and we estimate that by doing this, we are saving more than $2.8 million annually. We plan to hire 76 additional staff over the next two years to shift still more IT work away from contracted vendors to save an even greater amount.
Unlike some public hospitals in the country, our willingness to make tough and at times painful decisions has enabled us to avoid closing any major HHC facilities and has allowed us to remain faithful to our core mission of serving all New Yorkers without regard to insurance or immigration status. But it must be understood that the unrelenting financial pressure represents a grave threat to our mission and to our long-term ability to maintain sufficient service capacity to meet the needs of our patients across the City. And more tough decisions surely lie ahead.
Here’s why: Serving 1.3 million New Yorkers – more than one-third of who are uninsured – will cost our system about $6.7 billion this year. Yet, our revenue from all sources will fall several hundred million dollars short of that amount, requiring us to tap limited and dwindling cash reserves to cover our costs. While in the past we have relied on increasing governmental funding to keep our system solvent in the face of rising costs that are outside our control, the current economic conditions at all levels of government, the resulting clamor for reducing healthcare costs, and the growing hostility in Washington to the undocumented immigrants who constitute many of our uninsured patients, make additional significant government support unlikely for the foreseeable future.
Given this harsh reality, we must redouble our efforts to make our system as efficient as possible. And we are doing that in many ways. One of the most promising is our work to involve as many of our front-line employees as possible in learning and applying process improvement techniques that enable teams of employees to identify ways to make our operations more efficient.
We call this continuous operational improvement approach Breakthrough and over the past four years more than 4,000 of our employees have participated in team-based rapid improvement Breakthrough events that have helped us generate more than $211 million in combined new revenue and cost savings.
By way of example, Breakthrough teams at Bellevue have dramatically improved patient flow through its operating rooms, decreasing the average delay between surgical procedures by 68% and generating significant additional revenue.
Metropolitan Hospital at one time had more than 50% of its adult patients waiting more than three and a half hours for discharge after a physician’s discharge order was written. This sometimes resulted in a backlog in the Emergency Department and excessive delays in the admission of new patients to an available bed. Using Breakthrough methods, the Emergency Department staff have found efficiencies, resulting in a reduction of the median wait time for patients’ transfer to an inpatient bed to less than two hours, and decreasing congestion in the ED.
Gouverneur has used Breakthrough methods to improve access to ambulatory care services, resulting in shorter waits for non-physician services (such as form completion and prescription refills), and increasing patients’ access to the pharmaceutical industry’s Patient Assistance Program which provides high-cost medications to medically indigent patients with for free.
Even as we struggle to make our system more efficient and to manage the formidable financial challenges we face, we continue to be responsive to the needs of our communities day after day. We still provide about 225,000 hospital inpatient stays, more than 1 million emergency department visits, and more than 5 million outpatient visits annually.
Here in the Manhattan, HHC provides 86% of all hospital-based clinic visits and slightly more than 30% of all inpatient stays made by uninsured Manhattan residents. And we continue to provide our patients with a full range of primary and preventive care services, with an emphasis on the early detection of disease and the effective management of chronic diseases such as asthma, diabetes, and hypertension.
HHC has also been committed to making HIV testing available in as many clinical settings as possible, as a critical part of the City’s strategy to prevent and treat HIV. This past year, HHC facilities tested more than 195,000 patients – more than three times the number tested just six years earlier. Since 2005, HHC has tested more than one million New Yorkers for HIV, an important milestone formally recognized by the US Centers for Disease Control and Prevention on World AIDS Day in December 2011. More than 10,700 HIV-positive individuals have been diagnosed as a result of our testing efforts and thousands have been linked to care, improving their health and the health of the community.
As a measure of how well our facilities meet the primary care needs of our patients, all of our primary care sites here in Manhattan and across the City – encompassing nearly 600 HHC primary care providers – have been certified as patient-centered medical homes, the highest standard for provision of effective and comprehensive primary care services.
It is a tribute to our hard working and dedicated staff that despite the reduction of our workforce by more than 2,500 employees over the past three years, we have maintained essentially the same scope and volume of services. We are also maintaining and, in many respects improving, the quality and safety of the care provided across all of our facilities.
And, on a brighter note, we now can clearly see opportunities on the horizon to do an even better job for our patients and communities. Although the US Supreme Court will soon decide the fate of federal healthcare reform, and whether expanded healthcare coverage will begin as planned in 2014, earlier this year New York State began its own version of healthcare reform.
Over the next three years, New York State will change the way it pays for Medicaid services to help strengthen the coordination of healthcare services, especially for patients with chronic disease and for patients with significant mental illness. In addition, New York State also will require providers to do a better job of helping frail elderly and other patients in need of long-term services to receive their care in their home and in their community as long as possible rather than being institutionalized.
These changes in the New York State Medicaid program here are meant to reduce Medicaid costs by improving the health status of patients who are at highest risk of needing expensive emergency department, inpatient, or skilled nursing facility services.
This proactive approach to promoting health and providing robust primary care has long been a central part of HHC’s mission-driven strategy and is a far better way to reduce long-term healthcare costs than continued Medicaid and Medicare rate cuts. We are fully supportive of the Governor’s efforts to redesign the Medicaid program in ways that bolster and better reimburse comprehensive primary and preventive care, more effective chronic disease management, and better overall care management and care coordination to reduce the need for hospitalizations or nursing home admissions.
We are already taking concrete steps to align our services with this new direction in the State Medicaid program. For example, our health plan, MetroPlus, has submitted an application to offer long-term managed care services that would help patients at risk of entering a nursing home to stay at home and receive the services they need in the community.
We also recently have been certified to become what is known as a “Health Home” for patients in the Bronx and Brooklyn with multiple chronic disease and/or serious mental illness. The “Health Home” initiative will leverage funds available under federal healthcare reform to pay providers to hire and train care managers and related staff who will become part of a patient’s care team. We also fully expect to be certified as a “Health Home” for our eligible patients in Queens and right here in Manhattan as well when those certifications are announced in the Spring of 2012.
These care managers will establish relationships with patients and help educate them about the importance of adhering to their treatment plans and medication regimens; encourage patients to change behaviors, including diet, that will better control their diabetes or hypertension; help patients navigate the healthcare system; and ensure that multiple providers who are caring for the same patient have a common understanding of the patient’s needs and a single, integrated plan is developed to produce the best possible outcomes.
And, for patients with serious mental illness, there will be an increased focus on integrating mental health services with primary care and other general medical services required to treat patients in a more holistic way. For too long, patients with serious mental illness have died prematurely precisely because the health system has focused on their mental illness to the exclusion of other serious medical conditions, like diabetes and cardiovascular disease that put them at great risk.
The full range of Medicaid reforms now set in motion in our State are more complicated than what I have just described and will require major changes in the way that we and others deliver care. But the end result should be better care and better health for the majority of our patients and for the communities we serve.
We are committed to being at the forefront of these Medicaid program reforms, and our health plan, MetroPlus, will be a very important partner with us in providing better care. The commitment of our MetroPlus colleagues to our patient care mission is underscored by the fact that this year – for the sixth time in seven years – MetroPlus was rated the best New York City Medicaid managed care plan based upon quality and patient satisfaction scores measured by the NYS Department of Health.
In Manhattan and across HHC, our public hospitals continue to exceed national benchmarks on many important publicly reported measures of quality and patient safety.
For example, last year, our host, Harlem Hospital Center, was honored with the Leapfrog Award for its advances in quality and patient safety. Additionally, the Hospital’s Department of Neurology received the Silver Plus Award from the American Stroke Association and the American Heart Association recognizing its high standard of stroke care.
In another important recognition, Dr. Naureen Zafar, Director of Harlem Hospital’s Medina Clinic, was awarded the prestigious 2011 Marshall England Memorial Public Health Award by the Commission on the Public’s Health System. Medina and Dr. Zafar exemplify the commitment of Harlem Hospital to provide culturally competent and sensitive care to all community residents, including those from immigrant communities that have been traditionally underserved.
Harlem Hospital’s modernization is on track for completion by August 2012, including its new patient pavilion, the renovation of the existing Martin Luther King Jr. Pavilion, and preservation of the hospital’s historic WPA Murals. Along Lenox Avenue, you can already see the spectacular external wall that replicates one of the murals. It is already a Harlem landmark and just as important, a source of great pride for one of HHC’s most venerable and beloved institutions.
In November, the Sydenham Family Health Center relocated to 264 West 118th Street. The new site has state-of-the art medical equipment, including new digital dental radiography, as well as new exam rooms and reception areas. Services include Adult Medicine, Pediatrics, Obstetrics/ Gynecology, HIV, Podiatry, Dental, Social Work and financial counseling.
In early summer, Harlem Hospital, as part of a broad HHC effort, is introducing a multi-dimensional program, in partnership with community based organizations, to confront and address behavior and risk factors that contribute to gun violence. Part of this collaboration is being funded by the Mayor’s Young Men’s Initiative, a set of new policies and initiatives intended to reduce disparities for black and Latino young men and provide targeted support that will make a positive difference.
Finally, with regard to Harlem, we all mourn the passing of Dr. Muriel Petioni, known and loved as the “mother of medicine” in Harlem. Harlem Hospital is developing a dedicated geriatric space and plans for a geriatric psychiatric unit. The new geriatric suite will be named in Dr. Petioni’s honor.
I want to acknowledge that another renowned HHC facility in Manhattan, Bellevue Hospital, celebrated its 275th Anniversary last year, and in December, Lynda Curtis, staff, Auxiliary and CAB members hosted a reception highlighting Bellevue’s historic contribution to medicine, public health and innovation. Continuing its reputation for landmark achievements, last year Bellevue opened a children’s Comprehensive Psychiatric Emergency Program (CPEP), the first of its kind in a city public hospital. The new unit serves children and adolescents up to 18 years of age and provides an optimal environment for the evaluation and treatment of psychiatric crises. Since opening, more than 1,500 children and adolescents have been seen in the new Child CPEP.
In July, Bellevue opened a 20-bed Neonatal Intensive Care Unit (NICU) named in honor of a longstanding advocate for quality maternal and pediatric health, Barbara Gimbel. The 14,000 square foot $5.2 million unit has capacity to serve 500 infants annually, and it is designed to provide an optimal environment sensitive to the developmental needs of the most critically ill infants, their family and the staff who care for them.
Responding to address another critical need in the community, Bellevue leased space to the Visiting Nurses Service for the construction and operation of 25-bed hospice and palliative care unit on campus. The Haven Hospice has now opened and patients will be cared for by an interdisciplinary team that includes physicians, nurses, nurse practitioners, social workers and spiritual counselors, all of whom have been trained in hospice and palliative care.
This past year, Metropolitan’s Methadone and Detox programs received full Joint Commission accreditation for another 3 years. These programs are very important for our community and are part of the hospital’s strong Behavioral Health Department that works to meet the mental health needs of so many of our patients.
Metropolitan also recently implemented an award-winning patient safety program known as Quiet Zones, aimed at eliminating medication errors by removing distractions to nurses in patient areas. Nurses wear yellow belts, similar to crossing guard belts, alerting other staff and patients that they cannot be interrupted. This relatively inexpensive low tech initiative is already showing significant impact at Metropolitan and is being replicated at other HHC facilities.
Two important capital improvements were completed in 2011at Metropolitan. A dialysis unit was redesigned to accommodate more patients and investments were made to create a state-of-the-art pediatric inpatient unit. Joint Commission surveyors visited the Coler and Goldwater long term acute care hospitals and skilled nursing facilities last year, and the surveyors issued excellent reports for the facilities. The survey teams also identified a number of Coler-Goldwater processes as “Best Practices” in the long term care industry.
This past year Coler-Goldwater received a $1.3 million grant award from the Health Workforce Retraining Initiative (HWRI). The funding will support three projects over two years that support clinical skill enhancement for nurses, technology training and electronic medical record training of clinical staff, and leadership development training for head nurses.
Coler-Goldwater also began a $26 million sprinkler installation project at the Coler Campus began in October. This project will take two years to complete.
We are also engaged in an exciting project that involves our Goldwater and Coler campuses. By the end of 2013, we will have relocated Goldwater’s long term acute care hospital and skilled nursing facility operations to brand new facilities on what had been the North General Hospital Campus. These new facilities will provide greater privacy for both the hospital and nursing home residents and will facilitate the current excellent care delivered by Goldwater staff enabling them to fully implement a new model of resident-centered programming – Long Term Care Culture Change. Goldwater North will have 164 skilled nursing facility beds and 201 long term acute care beds.
Clearly, our Coler-Goldwater community recognizes that Goldwater North will be a smaller facility than the existing Goldwater. The principle reason for this is that there are more than 400 current residents at Coler-Goldwater who could benefit from home and community based services and not a continued stay in the skilled nursing facility. Current and future state and federal policy and financing changes compel us to build a facility sized to meet the needs of residents who need hospital skilled nursing care. Therefore, we are working very hard to identify appropriate discharge options for these individuals over the next 20 months, including the development of housing on a parcel on the Metropolitan Hospital campus.
We acknowledge that the changes that will occur at Coler-Goldwater involve many “moving parts”, and that it is critical to keep all stakeholders informed – including staff, residents and families, CAB members as well as Community Planning Boards and elected officials. We have convened town hall meetings, labor representative briefings, and meetings with affected CABs, Community Planning Boards and elected representatives; and we will continue to do so.
Gouverneur Healthcare Services completed the first phase of its Major Modernization, which included a new Ambulatory Care Pavilion. The project is expected to be completed within the next two years and will eventually address the community’s need for an additional 85 more skilled nursing facility beds, while incorporating a new residential design and additional space for rehabilitative services.
Last year, MetroPlus Health Plan ranked Gouverneur first in overall quality among the 17 HHC facilities, based upon 50 quality measures monitored by New York State. Gouverneur’s performance was rated as equal to, or significantly better, than the NYS average for 46 of these 50 quality measures.
Governeur also recently expanded its evening and Saturday hours to make it easier and more convenient for the community members to access its ambulatory care services.
I am proud of the work that our dedicated HHC staff performs every day here in Manhattan and across our city to provide accessible, high quality health care to our patients. We are working hard on many fronts, as I’ve outlined, to make our system as efficient and effective as possible. And we are advocating strenuously at every level of government to fend off additional cuts that would undermine our ability to continue meeting the needs of our vulnerable patients and communities.
We appreciate the strong advocacy support that we continue to receive from our partners in labor, from our community advisory boards and auxiliaries, and from many community-based organizations that care about our mission. Our strong connection to, and support from, the communities we serve continues to be one of our most important assets.
Thank you all for your attention and for being here. I now will turn the program over to our moderator for the evening, Mr. Russo. I look forward to hearing your comments.