Good evening, I am Alan Aviles, President of the New York City Health and Hospitals Corporation (HHC). Thank you all for coming tonight. This is our fourth 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 Brooklyn: our host this evening, Antonio Martin, Senior Vice President of the Central Brooklyn Family Healthcare Network and Executive Director of Kings County Hospital Center; Peola Small, Executive Director of the Dr. Susan Smith McKinney Nursing and Rehabilitation Center; Arthur Wagner, Senior Vice President of the South Brooklyn/Staten Island Healthcare Network and Executive Director of Coney Island Hospital and George Proctor, Senior Vice President of the North Brooklyn Healthcare Network and Executive Director of Woodhull Medical and Mental Health Center. Although George only took up his position at Woodhull a few months ago, when Iris Jimenez-Hernandez moved to the Generations Plus/Northern Manhattan Network, he is well known to all of you here at Kings where he served admirably for 15 years. I want to thank Tony, Peola, Artie, and George and all the talented staff in their facilities for the stellar work they do every day caring for the residents of Brooklyn.
I also want to thank Tony Martin for coordinating HHC’s response to the disaster in Haiti. Kings County serves a large population of Haitian New Yorkers and it has our largest number of Haitian staff. Since the beginning of this year, Tony has worked with the Office of the Mayor, New York State Representatives and federal officials, as well as local elected officials and community-based organizations, on HHC’s immediate and long term response.
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 Kings, Woodhull, Coney Island and McKinney Community Advisory Boards, 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 30% of them right here in our Brooklyn hospitals. We provided outpatient care to another one million patients, 285,000 of them in Brooklyn. We delivered 23,000 babies across the City. 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.
At this time last year, 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 last year, 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 by the end of this year, we will have 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 restructure our largest long-term care facility located on Roosevelt Island. The entire plan, when implemented, will reduce our budget gap by another $300 million. The plan was released this past May 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 construction and plant maintenance staff, have occurred in recent months. And we closed several small clinics several months ago, including the Williamsburg Dental Clinic, the Wyckoff Gardens and Howard Houses Child Health Clinics, and the Fifth Avenue Health Center here in Brooklyn. We have 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. We have also begun the longer-term process of changing our relationships with our affiliate partners to reduce the total number of different agreements we have to administer and to more tightly align our physician workforce to strengthen our ability to function as an integrated delivery system. Such a change in our affiliate relationship at Coney Island was accomplished seamlessly several months ago.
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 tough 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 earlier this 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 annually over the next several years and, with the help of the State, it appears that these amounts will be matched by federal funds under the supplemental Medicaid program. We are awaiting final federal approval of this additional funding, and with it 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.
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, allowing children to remain on their parents’ insurance coverage up to the age of 26 and giving patients with pre-existing conditions more affordable insurance options.
But 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 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. Of course, our public hospitals and health centers here in Brooklyn and across the City 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 every one of our primary care sites, will be applying for certification as a “patient-centered medical home” by the end of this 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. Woodhull Hospital and the Cumberland Diagnostic & Treatment Center were given formal designation as medical homes in August and Coney Island received its designation in October. The applications for Kings County Hospital and the East New York Diagnostic and Treatment Center will be submitted by the end of the month.
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 change the reimbursement system to recognize the value of, and pay for, the health promotion activities that can lower long-term healthcare costs and that have been a central focus of our work in recent years.
And despite the turmoil of health reform and the ongoing fiscal challenges, there are some things that remain constant, especially our commitment to safely delivering high quality care.
World Aids Day was just two weeks ago and it is worth noting that our system-wide HIV Testing Expansion Initiative has enabled us to dramatically increase the number of patients tested for HIV as part of routine care, doubling from 92,000 tests in FY2006 to almost 190,000 in FY2010. This means that many more patients now know their HIV status and those that tested positive for HIV have been linked to care earlier, producing better outcomes. Our Brooklyn facilities tested more than 47,000 patients for HIV in FY2010.
The Kings County Intensive Crisis Stabilization and Treatment (ICST) Program was one of only 8 programs nationwide to be selected this year by the American Psychiatric Association for a full site review during consideration for its 2010 Achievement Awards. Although the program was an award runner-up, the Committee praised the program which provides up to 12 weeks of intensive services to children and adolescents who are at imminent risk of psychiatric hospitalization and/or are in the midst of an acute crisis.
The Dr. Susan Smith McKinney Nursing and Rehabilitation Center successfully completed a three-day survey by The Joint Commission earlier this year. The Commission reported no direct findings and I commend Tony, Peola and their staff for this excellent result.
Several programs at Woodhull Medical and Mental Health Center have been recognized as exceptional during the past year. The hospital received a Gold Performance Achievement Award from the American Heart Association and the American Stroke Association’s Get with the Guidelines Program for its commitment and success in achieving a higher standard of cardiac and stroke care for hospitalized patients. Woodhull also received an honorable mention from the 2010 HANYS Community Health Improvement Award program for its Geriatric Outreach Program. This program reached thousands of seniors in the Woodhull area through home assessments, screenings and educational events and increased senior outpatient visits by 17%.
The North Brooklyn Network has a long history of focusing effectively on asthma management, and this year Woodhull received the US Environmental Protection Agency’s 2010 National Environmental Leadership Award in Asthma Management for delivering high-quality asthma care that incorporates environmental controls.
Among Coney Island Hospital’s achievements this past year was the development of its Code Grey psychiatric crisis prevention team. This innovative approach to increasing patient safety by reducing the use of restraints received positive media attention during the year.
In other positive news, capital improvements continue to be made at all our Brooklyn facilities. For example, in November, Coney Island opened a new 19-bed Palliative Care Unit designed with patients’ families in mind. This dedicated unit offers coordinated care to patients with serious advanced disease and/or life threatening illness. Coney Island was an early leader in recognizing the value of palliative care; its palliative care program has served more than 5,000 families since 2005.
On October 14, Kings County opened a new $7.3 million, 15,000 square foot Cancer Care Center that brought under one roof services that were previously spread out across multiple locations on the Kings County campus. We are very grateful to the Kings Auxiliary which contributed $200,000 to this project and to the City Council for its capital contribution of $5 million.
In April, Kings County re-kindled the old tradition of the public hospital system training many of its own nurses. Renovations were completed to accommodate a facility for the Long Island University School of Nursing at Kings County Hospital Center. The program is located on the same site as the former Nursing School at Kings that dates back to 1897. The first class of nurses will graduate in May 2011.
At Woodhull Medical Center, about $9 million is being invested in the construction of a new women’s health pavilion and options center. Both projects are scheduled for completion by the middle of next year.
Our efforts to make HHC one of the safest hospital systems in the country took a big step forward with the completion of our new Institute for Medical Simulation and Advanced Learning housed on the Jacobi Hospital campus. IMSAL will use state-of-the-art computerized simulation equipment and other techniques to focus on training clinical teams from across our system to improve their collaboration and communication during high-stress and complicated, emergency scenarios, when every minute counts and cohesive teamwork can make a life or death difference. This focus on training all clinical staff to increase their ability to function as high-performance teams is the next major chapter of our patient safety journey.
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, www.nychhc.org/hhc.
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 will soon take office and face a projected $10 billion state budget deficit for the coming year. Because Medicaid is the second-largest part of the state budget – after education – we can be sure that there will be continuing pressure to reduce the Medicaid budget with further rate cuts possible. In addition, because the City continues to face its own multi-billion dollar deficits, we cannot expect our city government to make up for further state cuts.
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). These RIEs are week-long, intensive working sessions during which a multi-disciplinary team assesses how something is currently done, determines what the ideal process should be, and maps out how to get from the current way work is done to the ideal way it should be done. 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.
Kings County first used Breakthrough methodologies in December 2008 to design the optimal flow for patients in the new CPEP, resulting in improvements in patient safety and quality of care. In addition, improvements to coding and documentation processes have increased revenue by over $4.4 million this year.
At Coney Island, the use of Breakthrough to improve revenue collection processes and procedures increased inpatient and outpatient collections by almost 10% (over $6 million) between the first quarter of FY10 and FY11. Waiting time in the registration area for walk-in clinic patients has been reduced by two-thirds, enabling the hospital to add two walk-in appointment slots to every doctor’s schedule. Using Breakthrough to identify ways to improve its Medicaid recertification process, Woodhull generated an additional $3.7 million in revenue from retained Medicaid Managed Care premiums between April 2009 and November 2010. With respect to patient care, the nine-month average readmission rate at Woodhull for congestive heart failure (CHF) patients has been reduced to 14%, down from an average of 35% with a 93% adherence to CHF guidelines.
We believe that the effective use of Breakthrough across our large system leverages all of the talent and experience of our committed workforce and can help us keep ahead of the continuing demands to slow the rapid increase of healthcare costs, without resorting to more painful cuts to services or personnel.
All the facilities that comprise our three Networks in Brooklyn excelled this year, stepping up to meet challenges and maintain a standard of care that rivals that of any healthcare system in our city. I am proud that these facilities 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 Brooklyn, allow me to 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.