New York City Council Hearing: Examining the Status of “One New York: Health Care for Our Neighborhoods” What Progress Has Been Made, and What Challenges Lie Ahead?

Mitchell Katz, M.D., President and Chief Executive Officer
NYC HEALTH + HOSPITALS
Wednesday, February 28, 2018

Good afternoon Chairperson Rivera and members of the Committee on Hospital Systems. I am Mitch Katz, M.D., President and Chief Executive Officer of the NYC Health + Hospitals (“Health + Hospitals”).

This is my first City Council hearing and I am so honored to be here before you. I am a Brooklyn boy, a product of the New York City public school system. Growing up my family received their care at Coney Island Hospital and Kings County Hospital, and so I know how critical public hospitals are to the well-being of families and their communities.

At heart, I am a primary care doctor. I will begin my New York City medical practice as an outpatient doctor at our community health center on the Lower East Side, NYC Health + Hospitals/Gouverneur, as my New York State license came through last week and I have submitted my application for privileges. I will work as an inpatient doctor at all of our hospitals on a rotating basis. I love public hospitals and clinics and the people who work in them and the patients who come to them.

I can assure the committee members that Health + Hospitals is filled with mission driven doctors, nurses, social workers, pharmacist and other professionals. The quality of medical and nursing care provided at Health + Hospitals is excellent, and above the community standard. Every day our hospitals save the lives of critically ill patients in our emergency rooms, intensive care units, and hospital units. However, our system suffers from several serious problems related to access if you are not critically ill. And these access problems compound our financial problems because they discourage paying patients from seeking our care. I was charged by the Mayor to take the work on transformation to another level – to turbocharge it – in order to ensure long term stability and quality. I want to work with this Council and the Mayor to make the “system” as good as the people working in it.

To date, Health + Hospitals has been successful in reducing expenses and increasing revenue in order to lessen the budget gap. For example, through our work to standardize purchases and get the best price we can for products, we have saved more than $106 million over the past two fiscal years. By improving our billing and revenue collection processes, we have garnered more than $107 million in the last fiscal year. Most prominently, Health + Hospitals has managed personnel expenses closely over the past three fiscal years for savings estimated at more than $400 million. This is progress but more needs to be done.

My three top priorities are: invigorate and expand primary care, improve access to needed specialty care, and bring fiscal solvency to Health + Hospitals. By focusing
on all three, we will better address community health needs, improve the patient experience and maximize opportunities for new revenue. I am certain we can achieve these three goals.

A large body of evidence demonstrates that longitudinal care provides higher quality care at lower costs. Every clinician can tell you why. When you know patients over time, you know their preferences; you know how they respond to illness; you understand their social situation. And longitudinal relationships facilitate the healing role of therapeutic relationships. And you don’t have to be a doctor to make a difference. One of the most therapeutic relationships I ever saw develop was between a middle-aged female receptionist in a San Francisco AIDS clinic and a frightened young man who came there for treatment.

We need to connect every patient in our system who has a chronic disease to a primary care provider. We need to expand primary care teams throughout our systems, including case managers, pharmacists, and community health workers to improve access, quality, and patient satisfaction. We will use the tools of population health management to ensure we are reaching all who need us.

We must also move swiftly to improve specialty care by shortening wait times. We will do this through an expanded electronic consultation system. This effort is underway now in 28 clinics at 4 facilities. Electronic consults enable primary care doctors to consult with specialists about the needs of their patients. They result in decreased wait times and more efficient specialty visits. We must also continue our work on our Call Center operations for scheduling our patients and directing them to the appropriate facility. When we expand our primary care capacity and have a robust electronic consultation system in place we will be able to successfully increase enrollment from insured persons, which will improve our revenues.

Our health plan, MetroPlus is a valuable asset for us. It provides us an important opportunity to enroll and provide care to new patients. Overall membership, as well as membership in the MetroPlus plan for city employees, has grown in recent months. While this is positive news, growth is only part of the equation. For MetroPlus to realize its potential, we need to improve access to care so that MetroPlus members can receive their care at Health + Hospitals facilities to the greatest extent possible.

As the Council knows from our budget hearings, our financial situation is precarious. As the City’s largest single provider of care to uninsured patients, approximately
415,000 last year, we will always need help from the City of New York to support the care of the uninsured. But that amount must be predictable and defensible as an appropriate subsidy for care provided.

Similarly, we will need continued support from the federal government to pay for care provided to our uninsured patients. Earlier this month, Congress delayed implementation of cuts to Disproportionate Share Hospital (DSH) funding for two years. This was a very welcome reprieve – albeit temporary – and I want to thank the members of New York’s Congressional delegation and all of our elected officials who worked on this issue. This was an important victory for hospitals who see large numbers of uninsured patients. Moving forward though, it is important to remember that these cuts were not eliminated. Rather, Congress pushed the cuts out into the future and expanded the cuts dramatically to pay for the two-year delay. This remains a significant risk for Health + Hospitals.

As I think about the path forward for this system, I am a big believer in the adage of the nuns that created many safety net systems: there is no mission without a margin. For Health + Hospitals to be viable and to provide the services our community needs, we must take the following seven actions:

• Reduce administrative expenses. In recent months, we have eliminated a number of consultant contracts, with an estimated savings of $16 million. You cannot fix public systems with outside consultants. We should use consultants to answer specific highly specialized questions. Otherwise we need people who live and breathe the Health + Hospitals mission and we need to focus our resources on doctors, nurses, pharmacists, social workers and the people that directly support them. Health + Hospitals has already decreased administrative positions to save $62 million and we will be decreasing further in the coming months so that we can devote more of our resources to the care of our patients.
• Bill insurance for insured patients. As is true of many public systems, the history of Health + Hospitals is as a provider of care to the uninsured. But dating back to President Lyndon Johnson’s creation of Medicare for older persons and Medicaid for the disabled, there has been an increase in the number of low income people who have insurance. This has been furthered through the ACA, which gave low income people who were not disabled insurance via Medicaid and the exchange. Health +Hospitals has been slow to learn how to bill. However, under our Interim President Stan Brezenoff, an effort on revenue cycle work was begun and is already reaping benefits. It will take us two to three years to fully realize this lost revenue.
• Code and document effectively so that we can receive the payment we deserve. Billing insurance is not efficient unless the bills contain the information necessary to receive the full payment. Teaching people how to code records correctly can be the difference between fair payment from insurance companies and tens of millions of dollars in underpayments.
• Stop sending away paying patients. In my nearly two months here, I have learned that in many different parts of our system we discourage or even prohibit the care of insured people. There is a widespread urban myth at Health + Hospitals that insured patients should be referred out so that we can focus on care for the uninsured. This results in lost revenue and Health + Hospitals paying outside providers for the care of our own MetroPlus patients.
• Invest resources into hiring positions that are revenue generating. I understand that when you have a large deficit, people look at requests for new positions with skepticism. I certainly would in their position. But to get Health + Hospitals out of its current crisis, I need to hire revenue generating positions, including primary care doctors, nurse practitioners, pharmacists, and other specialized professionals. I am happy to present business plans that will meet the rigor of any financial analyst.
• Start providing those specialized services that are well reimbursed. Health + Hospitals is the largest provider of behavioral health in NYC, and one of the largest providers in the country. These services are poorly reimbursed, but I am happy to do them because they fit our mission. What I do not agree with is the idea that we would not do services such as cardiac angioplasty that are well reimbursed. In the case of angioplasty, not only do we lose money when we need to send our patients elsewhere (we do this common cardiac procedure only at Bellevue right now) but ambulances with patients with chest pain have to bypass our hospitals because we are not providing the right mix of services.
• Convert uninsured people who qualify for insurance to be insured. New York City has had success in increasing insurance for those eligible, but there is more that we can do to make it easier for patients to gain insurance. This helps them and helps us because insurance payments will be much larger than the copays low income uninsured people can afford.

If we succeed, with the help of this Council, the Mayor, our organized labor partners, and the incredibly dedicated staff of Health + Hospitals, in fulfilling these seven entirely achievable goals, I believe we will be able to markedly resolve our financial issues. We will still face challenges from federal policy around DSH and we will continue to face unique costs of caring for our patient population, but I am confident that the system will be in a much stronger position.