System bracing for new payment models with $650 million investment

One prominent Connecticut health system will invest $650 million to prepare for new payment models that require hospitals to do more to promote patients' health—and increase the financial risk for failing to do so.

Yale New Haven Health System is investing in information technology, primary-care physicians and resources to coordinate care and undertake actuarial and clinical forecasting, Nancy Levitt-Rosenthal, senior vice president of Greenwich Hospital, one of the system's three hospitals, told health insurance and health system executives in Chicago for the American College of Healthcare Executives Congress on Healthcare Leadership.

Meanwhile, the system is in talks with multiple payers and providers on contracts with financial incentives tied to performance instead of the volume of care provided, she said.

The health system's efforts also come at a time when providers face reduced payments from Medicare and Medicaid, she said, such as the 2% reduction to Medicare scheduled for April 1 as part of a far-reaching deficit-reduction deal. Yale New Haven has launched an effort to cut $500 million from its expenses over five years, she said.

The system is one of several that has moved to slash expenses, including Catholic Health Initiatives.

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