budget

Connecticut's hospitals raised a collective voice this past fall when Gov. Dannel Malloy tacked on additional cuts to hospital funding after the state's biennial budget passed in June. Once the dust settled in November, a special session of the legislature restored some funding.


The cuts, however, still pose a significant reduction in funding that will challenge Yale New Haven Health System to find ways to continue to bring uncompromised care and value to patients and employees.

Christopher O'Connor, YNHHS executive vice president and chief operating officer, reminds staff that this isn't the first time Connecticut hospitals have been told to do more with less. YNHHS has been positioned to manage these cuts to effectively offset their impact to patient care and employees while continuing to make investments in programs, facilities and people.

"We could see that the environment was changing, and we knew we needed to be prepared for state budget cuts and tax increases that would impact our budget and Medicaid reimbursement," O'Connor said.

Three years ago, YNHHS proactively addressed ways to drive unnecessary costs out of the system, with cost and value positioning efforts that focused on human resources, labor, non-labor and clinical redesign.

"Our system has been able to reinvest in patient care, clinical programs, employees and facilities due to cost and value positioning and clinical redesign efforts," O'Connor said. "We've removed substantial costs, $167 million over the past three years, to offset the massive reductions we've seen. Overall, we've said we can do better to bring unparalleled value to the people we serve."

"It is important to note that our cost and value efforts, including clinical redesign, start by asking the question, ‘How can we make this better, safer for our patients?' Our work always puts quality and safety first. Any cost savings bring added value to patients and their care," said Matthew Comerford, vice president, Internal Consulting Group.

One clinical redesign project included reducing blood use for selected procedures where evidence shows transfusions are unnecessary and costly. For example, the project team reduced unnecessary blood transfusions during heart/ cardiovascular surgery, which meant fewer complications for patients and millions of dollars saved.

The system also achieved savings through human resources and benefits costs. "We've been able to manage our healthcare costs partly through the livingwellCARES program, which is seeing enrollment growth and improved health outcomes alongside significant reductions in costs among participants," O'Connor said.

He also noted that, given the positive results the system has achieved through cost and value efforts, YNHHS has had no layoffs and has been able to give raises and award PIP to employees across the system. Saving dollars on the labor side, YNHHS has reduced the number of traveling nurses and overtime. The vacancy review process also scrutinizes and prioritizes the need for new or open positions. "We've seen tremendous success with contract pricing, saving millions of dollars on contract costs," O'Connor said. "We are able to maximize savings on goods and services.

"Every hospital in Connecticut has a different way of dealing with the state budget cuts. Some have had layoffs, others have reduced services. We are incredibly fortunate as we started addressing our own cost improvements across the system well before the state budget reductions happened."