ALAN D. AVILES
HHC PRESIDENT AND CHIEF EXECUTIVE
REPORT TO THE BOARD OF DIRECTORS
June 29, 2006

HHC REPORTS OUTSTANDING PERFORMANCE IN NATIONAL 100,000 LIVES CAMPAIGN

When HHC decided 18 months ago to participate in the 100,000 Lives Campaign sponsored by the Institute for Healthcare Improvement (IHI), we set a goal of reducing inpatient mortality by 5% - which would mean saving approximately 174 lives throughout our system compared with IHI's baseline year of 2004. This goal was to be achieved by consistently applying evidence based medical interventions in six specifically targeted areas of patient care. I am very pleased to report that, by June 14, the date the IHI set to review the outcome of the campaign, HHC facilities exceeded the goal set and effectively reduced inpatient mortality by nearly 10% - saving an estimated 332 lives.

Throughout the country, over 3,100 hospitals participated in the IHI campaign, representing 75% of all hospital beds nationwide. They collectively exceeded the national goal, saving an estimated 122,342 lives nationwide. Encouraged by these results, IHI announced an extension of the campaign to December 31, 2006 and added an additional goal: the implementation of all six of the IHI-recommended interventions in all facilities by January 1, 2007. At all HHC hospitals, all six interventions are already being incorporated as a regular part of patient care.

While we have spoken about our successes with some of these interventions in previous meetings, this may be a good time to review all six of the recommendations and note HHC's progress in implementing them.

• Activate a Rapid Response Team (RRT) of specialists to give extra attention to patients at their first sign of decline that could lead to cardiac arrest. By April 2006, all HHC hospitals began implementing rapid response teams. Bellevue hospital has had RRT implemented since January and now estimates that RRT has reduced cardiac arrests outside the ICU by more than 50%.
  
  
• Prevent patients from dying of heart attacks by delivering evidence-based care, such as appropriate administration of aspirin and beta-blockers to prevent further heart muscle damage. HHC has been implementing these measures for several years and has already been recognized by the Centers for Medicaid and Medicare Services (CMS) and the New York State Department of Health for achieving some of the best results in the nation.
  
  
• Prevent medication errors by ensuring that accurate and continually updated lists of patients' medications are reviewed and reconciled during their hospital stay, particularly at transition points. HHC's automated systems have been assisting in this effort for the past ten years, through computerized physician order systems, and more recently, through automated medication administration. Medication reconciliation support is now being built into those systems and Coney Island Hospital was commended during JCAHO's survey this month for their medication reconciliation process.
  
  
• Prevent central line infections in patients who are receiving medicines and fluids intravenously by following five steps, including maximal sterile barrier precautions and cleaning the patient's skin with the antiseptic chlorhexidine. By implementing these steps - called a "bundle" - several HHC hospitals have seen reductions in central line infections by 25-50% and many (for the first time) have not experienced any infections in 2-3 consecutive months or more.
  
  
• Prevent surgical site infections by following a series of steps, including the timely administration of antibiotics. By the end of 2005, HHC corporate average on the 3 CMS measures for preventing surgical site infections was 90%, and several HHC hospitals have continued to improve, now achieving 95 to 100% implementation of this "bundle".
  
  
• Prevent patients on ventilators from developing pneumonia by following four steps, including raising the head of the patient's bed between 30 and 45 degrees. This "bundle" is now being applied at most HHC hospitals 90-95% of the time and most are beginning to see reductions in ventilator acquired pneumonia (VAP). Harlem has reported a 50% decrease in VAP compared with 2004, and Bellevue and Queens report no VAP in past two months. Woodhull Hospital implemented the Ventilator bundle about two years ago, and reports no VAP occurrence in 10 months.
  

These results could only be achieved because of the dedication of our staff to Patient Safety as HHC's top priority - and their commitment to consistently applying evidenced base practices and measuring results. As we continue to implement these quality improvements we should occasionally take a moment to acknowledge the great difference these efforts make in the lives of our patients and their families.

HHC LAUNCHES PATIENT SAFETY INTRANET GATEWAY TO SHARE TOP PRIORITY INFORMATION ACROSS HHC

On June 7 HHC launched the Patient Safety Gateway - an internal web site that is a powerful tool to educate our staff about top priority patient safety issues. This web-based portal is a resource to share best practices, highlight successes in our facilities and publish valuable case studies from national patient safety organizations. In the months ahead we will identify material from this gateway that is also of interest to our partners outside the corporation and make it available to them on our public web site. We look forward to seeing the positive effect this communications technology tool will have as our staff utilizes it to enhance their patient safety efforts.

HHC REASSURES IMMIGRANT NEW YORKERS

As you know, on May 30, I was joined by Immigrant Affairs Commissioner Guillermo Linares in a press conference at Elmhurst Hospital Center to announce our public awareness campaign to reassure immigrant New Yorkers that HHC hospitals and clinics will care for all New York City residents, regardless of immigration status. Our campaign features a joint Open Letter to Immigrant New Yorkers from Commissioner Linares and me. The letter urges immigrants to not hesitate seeking needed health care at HHC public hospitals, and stresses our commitment to keep all patient information about immigration status strictly confidential. Nearly fifty community organizations, including the many member organizations that are part of the New York Immigration Coalition, have agreed to distribute the letters that are available in 10 languages.

To date, nearly 45 news outlets have reported our efforts and have helped us deliver this message to an impressive number of viewers and listeners across our region. In fact, we calculated that nearly 7,000,000 people in our area read or heard about our commitment to serve immigrants. Part of our campaign also focused on getting our Open Letter published at no cost by ethnic and local community newspapers. Some 48 newspapers have published or have committed to publish the letter, providing our message with pro bono media exposure valued at nearly $105,000.

HHC employees also have played an important role in delivering this message. They have embraced this campaign and once again demonstrated their strong commitment to our mission by offering their suggestions at group meetings, setting up tables to distribute the open letter and making sure our patients are reminded that our commitment to serve all without regard to ability to pay or immigration status is stronger than ever.

STATE BUDGET NEGOTIATIONS CONCLUDE WITH FUNDING RESTORED

A final agreement was reached in budget negotiations between the Governor's office and Legislative leaders and on June 23rd the State Legislature passed the final budget for Fiscal Year 2007. Most of the proposed Medicaid cuts have been reversed and the emergency department Medicaid rate will increase over three years from $95 to $150. Nursing Home Medicaid rates will also be increased. However there will be a reduction in the trend factor for hospitals and nursing homes - which covers annual expense increases. The factor will be reduced by 0.25% - a reduction in 2006 from 2.5% to 2.25%. The final reduced 2007 trend factor will be determined later this year after the 2006 Consumer Price Index is published.

HHC is grateful to the State Legislators, community health advocates (including our Community Advisory Board members), labor, and hospital and nursing home trade associations for their persistent efforts during this year's protracted and complicated budget session.

FINAL CITY BUDGET RESTORES FUNDING FOR MOST COMMUNITY HEALTH PROGRAMS AND FUNDS NEW INITIATIVES

Early this month I presented testimony on the impact of the Fiscal Year 2007 Executive Budget to the City Council Health and Finance Committees. My testimony focused on HHC's financial outlook, and several HHC initiatives that are funded in part by the Council. Many Council Members spoke highly of the excellent health care provided at HHC facilities and praised our activist approach to addressing health disparities. They also applauded our public awareness campaign to reassure immigrant New Yorkers that public hospitals, nursing homes and health centers are safe and that HHC staff will honor their right to privacy.

I am happy to report that in the City Budget that was passed today, the City Council continued to show their support for HHC by providing funding for rapid HIV testing, the TEMIS program, child health clinics, pharmacy fee waivers, mental health and substance abuse programs and Capital funding for local projects. I would like to thank the members of the City Council, in particular Council Speaker Christine Quinn and the Committee Chairpersons: Joel Rivera (Health), Oliver Koppell (Mental Health) and David Weprin (Finance) for their commitment to HHC. I would also like to extend my gratitude to our Community Advisory Board Members, the Commission on the Public's Health System, our partners in labor, and the providers in the mental health and substance abuse community who advocated on our behalf.

CORPORATION TO END FISCAL YEAR WITH $360 MILLION CASH BALANCE

After receiving $715 million in Medicaid Rate Adjustment and Disproportionate Share Hospital (DSH) payments, and having received a $141 million DSH payment earlier this year, the Corporation will end the fiscal year with a cash balance of approximately $360 million. Nonetheless, HHC's expenses continue to exceed projected revenues as we are still faced with escalating obligations beyond our control such as pension and health insurance, while our revenue base remains relatively flat. If we are to avoid retrenchment of programs that are important to our corporate mission, we will need to aggressively pursue new revenue initiatives and cost efficiencies.

I want to thank the City's Office of Management & Budget which worked closely with HHC Corporate Finance to establish a solution to the projected shortfall that the Corporation faced earlier this fiscal year, as well as Marlene Zurack and her staff for their hard work in securing these funds.

ELMHURST WINS SUBSTANTIAL HEAL NY HEALTH INFORMATION TECHNOLOGY GRANT

On May 24th, the Governor announced that a $1,965,000 HEAL NY Health Information Technology grant was awarded to Elmhurst Hospital Center (EHC) for a pilot project to expand the "Smart Card" program and develop a standard "Community Patient Record" that can be shared by other hospitals and community health providers in the borough of Queens, through a secure web-based portal.

Elmhurst has assembled a broad coalition of hospitals and community physicians - the Queens Consortium for Healthcare Information Exchange - to participate in the innovative project. "Smart cards" are credit card sized ID cards with an embedded computer chip that is updated after every medical encounter to hold computerized patient health information. The cards, which have been issued to 12,000 patients at Elmhurst Hospital and Queens Hospital provide the patient with a portable health record that can be carried from provider to provider.

During the two-year pilot project 45,000 cards will be distributed to patients by New York Hospital Queens, Mount Sinai Hospital of Queens and Jamaica Hospital. The smart card data for each patient will also be stored in a central data repository, which 1,000 physicians at Queens Hospital and Elmhurst Hospital can access via the internet. At the same time access will gradually be extended to 200 community health providers allowing them to also have direct access to test results and other health information for their patients.

Use of the "smart card" and central patient record will improve continuity of healthcare, reduce prescription medication errors and help overcome the patient/provider language barriers. The data repository can also monitor for public health trends, particularly among Queens' huge and mobile immigrant population. The Queens Health Network is already the leader in Queens in the development, implementation and spread of clinical repositories and patient Smart Cards and this pilot project is the next step in wider implementation of this important health technology.

HHC PARTNERS WITH AMERICAN CANCER SOCIETY IN HEALTH LITERACY CAMPAIGN

On June 7th, HHC partnered with the Mayor's Office and the American Cancer Society (ACS) to launch a series of learning sessions about using new health literacy techniques to more fully engage our patients as educated partners in their health care.

The first learning session focused on incorporating best practices in health literacy and language access into cancer screenings at Queens Hospital and Lincoln Medical and Mental Health Center. An adult education expert from the nonprofit Literacy Assistance Center presented an introduction to adult learning theory and its implications for health care communications. Participants gained insights into how adults process, understand, and act upon written information and how to use these insights to better engage communities in cancer screening efforts.

The Corporation's innovative partnership with ACS has produced "EZ Read" patient education material in 14 languages about mammograms, pap tests and smoking cessation programs at HHC. The publications are available in 14 languages on HHC's intranet web site where they can be downloaded and printed for distribution to patients.

HHC TEAMS RAISE OVER $17,000 IN ASTHMA WALK

On June 10, I was very proud to walk, along with more than 700 HHC staffers in the American Lung Association's 5 K Asthma Walk - "Blow the Whistle on Asthma" - in Battery Park. HHC was one of the local sponsors of the event and HHC facilities and central office fielded 13 teams and raised over $17,000, with additional contributions continuing to come in. Funds raised in the walk support advancements in research and asthma awareness. I commend the HHC staff members, who set aside time during their weekend to participate in the walk and support the American Lung Association, which is both a strategic partner to HHC and an important resource for our patients.

STRATEGIC REINVESTMENTS FOR CAPITAL IMPROVEMENTS

• The Corporation's major modernization projects at Kings County Hospital Center, Harlem Hospital Center, Queens Hospital Center, and Jacobi Medical Center are continuing to progress satisfactorily.
  
  
• A ribbon-cutting ceremony was held on June 1, 2006, to mark the unveiling of Lincoln Medical and Mental Health Center's new state-of-the-art digital mammography system, which was funded through a generous allocation of $407,000 from Bronx Borough President Adolfo Carrion, Jr. This new technology provides greater diagnostic accuracy, sensitivity and specificity, shorter exam time and lower x-ray dosage. Electronic images are more easily stored and images can be viewed over a secure internet connection at different locations.
  
  
• On June 16th, Queens Hospital Center celebrated the opening of their new state-of-the-art 64-slice CT Scanner - making Queens the first hospital in the borough to have the most powerful and fastest CT scanner currently available on the market. The new scanner enables the radiologist to evaluate arteries in the body while avoiding invasive angiography. It also drastically reduces the amount of time it takes to scan an organ of the body - a fraction of a second for many organs, two seconds for a lung. An entire body scan can be completed in less than ten seconds, making the procedure of having a CAT scan much easier and more comfortable for the patient.
  
  
• On June 27th, Jacobi Medical Center dedicated their new $5 million Cardiac Catheterization Suite, which has been fully operational since January. The Cath Suite promotes patient-centered care by delivering most of services required by a cardiac patient within the unit. By providing treatment for cardiovascular disease within this new unit, Jacobi retains more patients for treatment and follow-up care and doesn't need to refer those patients to outside facilities. This unit is one of six new cardiac cath labs to be installed throughout the Corporation as part of HHC's system-wide cardiology initiative.
  
  
• Elmhurst Hospital held a groundbreaking on May 4 to renovate the hospital's Immunology Clinic. The extensive year-long project will produce larger exam rooms, new registration and waiting areas, and private triage and counseling space. Councilmember Hiram Monserrate secured $1,000,000 in the city budget for the renovation, citing Elmhurst's Immunology Clinic as the first line of defense in protecting our communities.
  

INTERIM ONE-YEAR AFFILIATION AGREEMENT EXTENSION TO CONTINUE PERFORMANCE-BASED COMPENSATION

On today's agenda is a one-year extension of the Affiliation contract between Columbia University's Health Sciences Division and Harlem Hospital Center and Renaissance Healthcare Network and Diagnostic and Treatment Center for the provision of general care and behavioral health services. Because Columbia University's Health Sciences leadership will change on July 1, 2006, the new leadership requested the extension time to work with Harlem Hospital Center, the Generations+ Network and HHC to negotiate a full three-year agreement that takes into account appropriate planning for changes taking place at Columbia University and Harlem Hospital Center.

The proposed one-year extension under the same terms and conditions will continue to compensate the Affiliate based on performance and productivity. A pay-for-performance model will be developed that allows the Affiliate to be eligible for incentive payments for achieving excellence in aspects of care as required by Harlem Hospital. In addition, the facility will assess specific performance for department-specific indicators currently under development. The contract cost for Fiscal Year 2007 is approximately $53.5 million.

ANNUAL BEHAVIORAL HEALTH CONFERENCE FOCUSES ON SAFE, EFFECTIVE, PATIENT-CENTERED SERVICES

On Tuesday June 13, 2006 I joined 210 HHC staff participants in the Corporation's Annual Behavioral Health Conference and Employee Recognition Awards Ceremony. The first part of the Conference focused on the Institute of Medicine's newly released "Improving the Quality of Healthcare for Mental and Substance Use Conditions" - part of the Quality Chasm Series. The lunchtime ceremony included a presentation by our own Board member Dr. Lloyd Sederer and there were afternoon breakout sessions featuring state of the art best practices as well as a demonstration of our pilot behavioral health electronic medical record.

RECOMMENDATIONS TO MEDICAL RESEARCHERS AND EDUCATORS OF FUTURE HEALTH CARE WORKERS

On June 8 I had the opportunity to address an audience of health care educators at a health career conference hosted by the New York City Department of Education and CUNY New York City College of Technology. I expressed my hope that many of the talented and committed students of the CUNY system will look to HHC as a place to build their careers in health care and I stressed the growth of career opportunities in the field. It was also an excellent opportunity to stress the importance of clinical information technology and HHC's role as a cutting-edge innovator in the use of clinical IT to improve patient care. I also took the opportunity to emphasize the need to incorporate patient safety into the curriculum for all healthcare workers.

HHC IN THE NEWS HIGHLIGHTS

• May 30- The New York Times reported on recent renovations at Kings County Hospital Center. The new radiology wing, emergency room, surgery and birthing centers are the second phase of a $500 million modernization project. HHC President Alan Aviles commented on how the use of information technology will improve patient care.
  
  
• June 1- WFUV-FM interviewed Dr. Harold Tanenbaum, Chief of Radiology of Lincoln Medical and Mental Health Center about its state-of-the-art digital mammography system.
  
  
• June 6- To mark the 25th anniversary of the AIDS epidemic, New York 1 and Channel 9 interviewed Dr. Jason Lieder, Director of Adult HIV Services at North Central Bronx Hospital. Dr. Lieder discussed new drug therapies that have significantly reduced the amount of pills required for various regimens.
  
  
• June 20- ABC News Now interviewed HHC President Alan Aviles about the Corporation's Open Letter campaign to inform undocumented immigrants in the City that their information will be held confidential when receiving medical services at HHC facilities.