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2010 Year in Review

Report to the HHC Board of Directors

 

On February 1, as part of his budget address, Governor Andrew Cuomo proposed a $2.85 billion cut in State Medicaid funding. Current estimates are that this cut, along with the associated loss of a nearly equal amount of federal matching funds, may cost HHC $200 million or more in revenues per year. For now, the Governor has referred the specifics of these reductions to a Medicaid Reform Taskforce, which is already at work. Their recommendations are due March 1, though the Governor's budget proposal gives the executive branch the power to make cuts if the task force cannot agree on them.

Although the outcome remains uncertain, it appears increasingly likely that services currently exempt from the mandatory managed care program, like long term care, homecare, and psychiatric services to the seriously mentally ill, will be transitioned into a mandatory managed care model. As the Board knows, HHC has been working hard over the last few years to develop the care management and coordination infrastructure and other care delivery competencies that will be essential in a reformed environment where reimbursement is capitated (i.e., based upon per member per month payments) rather than fee-for-service.

Continuing to Innovate Despite Daunting Fiscal Challenges

Despite the fiscal headwinds that I have outlined, there is ample reason to be optimistic about HHC’s ability to adapt successfully to a rapidly changing environment. Our strategic work in recent years to better manage chronic disease, enhance our clinical teamwork, and streamline operations for efficiency put us ahead of the curve. Our ongoing Breakthrough initiatives figure prominently in these strategic efforts.

As you know, in 2007 HHC began rolling out its own version of what is commonly known as the LEAN process improvement method, which we call Breakthrough. Since that time, more than 3,500 employees have participated in more than 600 Rapid Improvement Events (RIEs) at HHC facilities where front-line teams tackle the redesign of their operations to increase efficiency. I have participated in two of these week-long events myself and that experience has reinforced for me how Breakthrough activities tap into the best of HHC.

The goal of Breakthrough is continuous performance improvement that enhances both staff and patient satisfaction while eliminating waste and streamlining operations in every part of the organization – no small task. Breakthrough can be applied to virtually every function in our facilities from the OR to housekeeping, and everything in between.