2010 Year in Review
Report to the HHC Board of Directors
Cost Containment and Restructuring Plan
In May 2010, HHC laid out a Cost Containment and Restructuring Plan to reduce our deficit by an additional $300 million without compromising our ability to meet the essential needs of our patients and communities. We engaged Deloitte LLP to help us formulate our plan.
Our plan comprises 39 ambitious initiatives to be completed over the next four years. These targeted initiatives are designed to achieve significant cost savings and implement major new efficiencies. Many focus on consolidation of programs; streamlining of operations; contracting externally for targeted management, support, or technical services; closing some low-volume clinics; and operating our long-term care programs more efficiently while reducing our long-term acute care and skilled nursing facility beds over the next three years. Others are designed to simplify our affiliation agreements, create organization-wide referral systems for certain surgical procedures, and better match clinical physician resources to demand.
A number of the 39 projects are under way, though many are still in the early stages. As hard as it has been, we have completed layoffs that include a number of Central Office staff, more than 75 physicians, and, in light of deep reductions to our capital programs, roughly 150 construction and plant maintenance staff. A November court decision blocked the planned layoff of approximately 140 other trades personnel. We firmly believe this decision is erroneous, and our appeal will be heard this April.
We also closed six small low-volume clinics in Brooklyn, Queens, and the Bronx. Before closing those clinics, however, we reached out to the patients they served to link them to alternative care, either at another HHC facility or with available community providers.
We regret that these layoffs and closures have become necessary to help redress our budget deficit. They are among the difficult and painful choices that we have made to remain faithful to our mission, protect our core patient care programs, and prevent the need for more drastic reductions or elimination of services. We continue to make every effort to achieve the necessary workforce reductions through attrition to the maximum extent feasible.
As recent developments at the State level have made clear, HHC remains further threatened by the continuing fallout from the national economic downturn.