An interview with Richard D'Aquila, YNHHS executive vice president

How is Yale New Haven Health coping with the current healthcare environment and economy?

Yale New Haven Health is in a relatively strong position right now, especially when compared to our peers. But at the same time, we are preparing for a rapidly changing future. Our approach has always been to plan ahead in a thoughtful way so we don't find ourselves in a position where we have to react suddenly to external forces. For this reason, we began a cost and value positioning effort well over a year ago, which has been both successful and helpful.

What cost and value positioning mean?

Health care has become too expensive in this country. As a major health system with broad patient care responsibilities from primary through tertiary care as well as a commitment to training, we understand that completely. The goal of cost and value positioning is to reduce costs while making our services better and quality higher. But cost and value is part of a much bigger process.

How do cost and value fit into the bigger picture?

Transformation is the bigger picture. As a major healthcare system, we are taking a lead in that transformation. We are moving from an emphasis on volume to value, from pay-for-service to pay-forperformance. This requires us to pursue a number of strategies at the same time. It is crucial that we support that drive and our exceptional reputation despite external cost pressures.

How prepared are we for this transformation?

Today, our volume is strong and financial bottom line is reasonably healthy. We have exceptional clinical services — cancer, organ transplantation, heart and vascular, women's and children's services — that have given us greater regional visibility and standing in various national rankings. However, we understand that cuts in Medicaid and Medicare payments will continue to pressure us to be smarter about how we provide care in both the inpatient and outpatient settings.

What are some of our other strategies?

We have to continue to build a broader integrated delivery system, which generates economies of scale. The integration with the Hospital of Saint Raphael was a big part of this transformation for Yale-New Haven Hospital. We have opened more outpatient settings and more closely aligned with physician practices. We must better understand the complete needs of our patients — not just hospitalization needs — especially their emergency and chronic health needs. We are building the infrastructure for care management so we can better manage readmissions and the care of patients outside the hospital.

But do we still need to cut costs?

Yes we do, for a lot of reasons. All providers, not just Yale New Haven Health System, must do the same in this environment. We are and will continue to be negatively impacted by state Medicaid cuts and federal Medicare cuts and commercial payers are looking for reductions in costs because employers are demanding premium reductions. Our goal is to reduce waste — eliminate whatever does not produce value, including supplies, processes, unnecessary patient days, procedures and tests, and the non-productive use of devices and medications.

How do we manage our human resource costs?

Because people are the lifeblood of this organization, we will always be committed to competitive salaries and benefits so we can continue to attract and retain the brightest and the best. But we can help manage our labor costs with a strict vacancy review process, carefully filling open positions and improving workflow and employee productivity.

How have we been doing on costs savings for supplies?

Our supply chain management program has been a huge success. We've taken a scientific approach to managing our supply costs. We use evidence and facts to purchase medical devices, general medical supplies and services for the hospital, and we execute more effective contracts with our vendors.

Can you explain what clinical redesign is and how we are we doing?

Clinical redesign is a system-wide physician-led effort to improve quality of care, eliminate unnecessary costs and over-utilization, reduce length of stay and better determine the most appropriate care. Twenty-six teams are examining areas for process changes, such as the model of care for hip fractures, heart disease, certain surgeries, and even the use of blood and imaging tests we perform.

What have been our biggest successes in value-added cost savings in the system?

One is Epic, which is an incredible tool to help us deliver consistent, high-quality care in a very structured way. Unnecessary variation in practice is the enemy of safety, quality and value. Everyone doing things differently contributes to waste, cost and even medical errors. Another success has been our ambulatory expansion of specialty services like Smilow and pediatrics.

What should employees know or how can employees help?

This is an exciting time to work here. Employees will be an important part of our successful transformation. But this whole effort comes down to the patient. Our job is to never lose sight of the patient. If we do that, we can't fail.

Editor's note: Future issues will include perspectives from other YNHHS presidents and senior leaders on the system's role in transforming health care.