By Lynn Arditi
Published January 10, 2017

PROVIDENCE, R.I. — Rhode Island Hospital has asked the state for approval to spend $43 million to build its first obstetrics unit just down the block from Women & Infants Hospital.

The state’s largest hospital network, Lifespan, is seeking to build a 31-bed obstetrics unit at Rhode Island Hospital that would open in 2020 and accommodate 1,600 births — just under a fifth of the 8,500 annual births at Women & Infants Hospital.

Meanwhile, Women & Infants also on Tuesday filed for permission to spend $18.6 million to renovate its labor-and-delivery rooms. Funding would include $8.6 million from private donations and $10 million in operating cash. If approved, the construction would begin as soon as the funding has been raised, and plans are to complete it by October 2018.

The proposals come as births in Rhode Island since 2000 have declined about 13 percent, to 11,392 births in 2015, state Health Department data shows.

Lifespan officials say the move is primarily aimed at providing better care for women at lower cost by offering all of their care through one hospital network.

“The Lifespan approach is really more about linking women’s care in pregnancy with a lifetime approach … before pregnancy, during pregnancy and after pregnancy,” said Dr. Margaret Miller, chief of women’s services at Rhode Island Hospital and director of Lifespan’s Women’s Medicine Collaborative. “This is the next logical step.”

Health-policy experts say the bid is also a competitive one designed to grab market share from Women & Infants, whose network, Care New England, recently stopped delivering babies at Memorial Hospital in Pawtucket and directed its patients to Women & Infants and its affiliate, Kent Hospital.

“They’re stealing market share,” John McHugh, assistant professor of health policy at Columbia University in New York. “So given that’s the case and they’re spending $43 million to steal market share, they better be doing it at a lower cost to justify it.”

In health care, high volume tends to correlate with high-quality care, which is a benefit of having one hospital that performs the vast majority of Rhode Island’s births, said Christopher F. Koller, Rhode Island’s former health commissioner who now heads the Milbank Fund in New York. But the downside is that a hospital that dominates the market can wield a lot of bargaining leverage with insurers to demand higher reimbursement rates which, in turn, can drive up costs to consumers.

“If you begin from scratch, you probably don’t have to have 80 percent of the births in one place,” Koller said. “But we’re not designing it from scratch. The burden is on Rhode Island Hospital to make the case that they can either improve population health or lower cost.”

Rhode Island Hospital already cares for about 500 patients each year who are transferred from Women & Infants because they experience complications and require care not available at that hospital, said Lifespan spokesman David Levesque.

Nationally, the number of complicated pregnancies has been rising, driven by higher rates of chronic disease.

Rhode Island Hospital’s proposed 31-bed unit would include 25 postpartum beds, six antepartum beds and eight labor-and-delivery rooms.

If approved, hospital officials predict it will break even on its $43-million investment within the third year of operation.

“We believe having an OB unit at Lifespan in Providence adds value to the patients we serve,” Dr. Timothy J. Babineau, Lifespan’s president and CEO, said in an e-mail. “That said, Lifespan has always believed — and continues to believe — that a merger of the two systems holds the potential to enhance the clinical and academic missions of both organizations, resulting in better and more cost-effective care for patients in Rhode Island and the region.”

Rhode Island Hospital filed its certificate of need application Tuesday with the state Department of Health. In January, the hospital withdrew its earlier submission filed in October 2016 to update its application prior to a state review. The Health Department will begin to review the new application on Feb. 10, and make a decision within 120 days.

—larditi@providencejournal.com

(401)277-7335

On Twitter: @LynnArditi