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 third 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 Queens: our hosts this evening are Dr. Ann Sullivan, the Senior Vice President of the Queens Healthcare Network and Chris Constantino, Executive Director of Elmhurst Hospital Center. I also want to acknowledge the outstanding job that George Proctor did over the past two years as Executive Director here at Queens, until I recruited him away in September to lead our North Brooklyn Network. Tonight is also my opportunity to welcome and introduce to the community the new Executive Director of Queens Hospital Center, and I am delighted that it’s Julius Wool. Julius is a longtime HHC leader who has spent the past 12 years as CFO in Queens. He brings extensive knowledge of the facility, deep financial expertise, and a warm and collegial management style to this important post. As Julius begins his tenure, I want to thank him, Ann, Chris, and the talented staff here and at Elmhurst for the stellar work they do every day caring for the residents of Queens.
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 Queens and Elmhurst 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 20% of them right here in our Queens hospitals. We provided outpatient care to another one million patients, more than 170,000 here in Queens. 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 a commitment to reduce staffing levels through attrition. We have carried out virtually 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 already occurred in recent months. And we closed five small clinics last month, including the Astoria Child Health Clinic here in Queens. 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 standardize terms and conditions so as to strengthen our ability to function as an integrated delivery system.
We regret that these measures are necessary, 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 Queens 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. Elmhurst Hospital Center was given formal designation as a medical home in July and the applications for Queens Hospital and our community health centers in Queens have already been submitted.
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. Last month, when Elmhurst Hospital Center was surveyed by The Joint Commission, the surveyors applauded a number of best practices including the Crisis Intervention Team in Psychiatry and the Malignant Hyperthermia Program’s Code HOT, which requires a rapid response to anesthesia emergencies within five minutes. I commend Dr. Sullivan, Chris Constantino and the staff at Elmhurst for their outstanding survey performance.
In addition, this past year Elmhurst received a Silver Award form the American Heart Association and American Stroke Association for their success in achieving a higher standard of cardiac and stroke care for hospitalized patients.
Queens Hospital Center also received its share of national recognition this past year, including a Quest for Quality Citation of Merit from the American Hospital Association and McKesson for its leadership and innovation in quality, safety and commitment to patient care. The award recognizes Queens Hospital’s exceptionally effective approach to reducing disparities in care through its strong community ties and accountability to the community it serves. Among the achievements cited were the hospital’s Cancer Center and its Center of Excellence in Diabetes.
World Aids Day was just last week and its 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 Queens facilities tested almost 33,000 patients for HIV in FY2010.
In other positive news, significant capital investments are continuing at both Elmhurst and Queens Hospitals. Capital improvements worth $11.3M will be completed for the new HIV/Infectious Disease Clinic at Elmhurst and an Endoscopy Suite at Queens have been completed and will open shortly. In addition, here at Queens Hospital, the third phase of the modernization project is progressing well. A renovated unit of 35 psychiatric beds opened this past January; forty new medical/surgical beds have been completed and are awaiting final State approval to be put in use; and the expansion of the comprehensive psychiatric emergency unit (CPEP) is under construction. The fourth and final piece of this $22 million program will be the expansion of the adult emergency room. Another $12 million has been allocated by NYSDOH for four additional projects including the construction of 35 new inpatient psychiatric beds and 40 new medical-surgical beds which have been substantially completed. Queens Hospital has also received $8.5 million in HEAL funding from the State for further capital improvements to its emergency department.
I want to give our heartfelt thanks to Councilmember Daniel Dromm and former Councilmember Helen Sears and for their invaluable support of two significant projects at Elmhurst Hospital. Councilmember Dromm secured $1 million to fund the construction of a 6-bed Chest Pain Observation Unit within the Emergency Department at Elmhurst Hospital. With the help of Councilmember Sears, the City Council, and a HEAL grant from the State, construction of a new $14.5 million, 20,000 square foot Women’s Healthcare Services Pavilion at Elmhurst began this year. This state-of-the-art facility will house a variety of women’s health services, including gynecology, gynecological surgery, colposcopy, pregnancy and HIV testing and counseling, prenatal care and high-risk pregnancy monitoring. The Pavilion is scheduled to be completed by 2012.
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 a relentless attempt 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.
Queens and Elmhurst Hospitals were among the first HHC facilities to adopt Breakthrough. Using Breakthrough methodologies to improve coding and documentation processes, revenues for the Network as a whole increased by $14.6 million. Here at Queens Hospital, weekend discharges were increased by 35% allowing patients to get back home to their families sooner.
At Elmhurst Hospital, Breakthrough teams in the Emergency Department reduced the average time from arrival to triage from more than 60 minutes to 9 minutes, getting our patients the help they need more quickly and making them far safer. EMS turnaround time at Elmhurst was reduced from 29 minutes to an average of 9 minutes, allowing ambulances to get back on the street that much quicker.
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.
Elmhurst and Queens Hospital Centers both 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 Queens, 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.