State-implemented Medicaid reform two years ago spurred the New York City Health and Hospitals Corporation (HHC) to reduce its costs in anticipation of reduced reimbursement. Responding to the state's Medicaid reform has helped HHC prepare for the federal healthcare reform legislation. In addition, creating a culture of patient safety and quality involved significant hospital-physician collaboration over the past several years, which has enabled HHC to lay the groundwork for accountable care under reform, says Marlene Zurack, senior vice president, finance, and CFO at HHC.

hfm: What are the biggest pressures your organization is facing with the new reform laws, and what are you doing to handle them?

Zurack: Two years ago, New York State implemented major rate reform in its Medicaid program. The state changed the rate-setting methodology for just about everything in Medicaid, which required us to adjust our computer systems. The reform also involved reduced reimbursement. In response to that major state-level reform, which was budget-driven in a lot of ways, we've also implemented some restructuring and cost containment to reduce our costs. We're well into implementing those changes.

In terms of federal healthcare reform, one of the biggest issues we face is that we have a very large system-1.3 million patients, 450,000 of whom are uninsured. Many of our uninsured patients are undocumented immigrants, so they're not eligible for any of the new benefits. We're also concerned about the eventual Medicaid disproportionate share cuts that are in the post-2014 period of healthcare reform.

We're doing a lot of advocacy with our representatives in Washington and in Albany to talk about our patient's needs and vulnerabilities, and we're also working with our uninsured population to provide them with care models that address their issues at an earlier stage of care. We are also participating with other states in talking with the Centers for Medicare & Medicaid Services about doing demonstration projects to work with this population. So we're doing that early.

In terms of healthcare reform in general, we view ourselves in many ways as having a lot of the pre-ingredients to being able to adapt to accountable care. Because we're a large system, we provide services from primary care to long-term care. Our physicians basically work for us, so we have physician alignment. We were early adopters of electronic medical records, so we see a lot of opportunity there, and we're working toward integrating our system further through system enhancements and other things. We also either have applied for a medical home designation or are about to submit applications for all of our primary care facilities to the National Committee on Quality Assurance. We recently received Level 3 designation for seven of our 17 sites.

We have a very large managed care plan, MetroPlus, with 400,000 members. About four years ago, we decided to consolidate our relationships with insurers to just a few and focus our efforts in our plan. We have a global capitation arrangement between our plan and our facilities. So we have been anticipating reform, and we've understood that this is a direction that we had to go in anyway.

hfm: As a recognized leading organization in patient safety and quality, how has this positioned your organization well to deal with the impact of reform?

Zurack: To create a culture that values patient safety and quality, we have had to establish a number of collaborations among the clinicians. We've been doing this for at least eight years. That activity in itself generates the concept that we can accomplish improvement projects at HHC. We've worked with the Institute for Healthcare Improvement, and we've done lot of work in clinical collaboratives to focus on certain issues. Now, like everyone else, we have to tackle issues such as readmissions and infections, and we do that as a system. I think that effort is consistent with the reform mode, and that it aligns well with our culture of safety and quality.

hfm: What role do you personally play, or does finance play, in the continuous improvement of patient safety and quality?

Zurack: We play a number of roles. We provide our clinicians with a lot of data that help them with their performance-improvement projects around safety and quality. We have been inculcated with the safety and quality messaging, such as getting our flu shots and washing our hands.

Of course, we consult with our colleagues in medical and professional affairs on issues such as never events in terms of the related patient accounting and billing concerns in a world where there are penalties for failures in patient safety. We have been at the table with our plan to help develop pay-for-performance models. We had a project where facilities would get performance bonuses for achieving quality statistics in their care of diabetics and asthmatics, and finance was at the table designing those incentives. We work with the payers to build incentives into our contracts around quality.

We also help troubleshoot some issues, such as getting data and privacy concerns, to help the quality movement.

In terms of our budgeting, we have protected nursing from a lot of our budget cuts. In the past six years, we have increased our nurse staffing ratios and maintained that level, even as we've decreased our FTEs.


Marlene Zurack Senior Vice President, Finance, and CFONew York City Health and Hospitals Corporation New York


Publication Date: Wednesday, December 01, 2010

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