PROVIDENCE – If you’re an employee of Lifespan, and you or your partner choose to deliver your baby at Care New England’s Women & Infants Hospital and not at Newport Hospital, a member of the Lifespan system, it may cost you as much as $400 extra in a co-payment for choosing to go outside the hospital’s new in-system network.

The new co-payments are part of Lifespan’s efforts, begun on Jan. 1, to encourage its employees to use Lifespan providers – or be charged a higher co-payment. Whether its for an eye examination, a mental health counseling visit, or an ob-gyn check-up – if you’re a Lifespan employee and you go outside Lifespan’s internal network of providers, you will be charged an extra co-pay.

[Newport Hospital is the only hospital within the Lifespan system that provides maternity services.]

The goal is to reduce the $140 million a year Lifespan pays for its employees’ health insurance costs – a self-insured plan administered by Blue Cross & Blue Shield of Rhode Island, according to Lifespan’s president and CEO, Dr. Timothy J. Babineau.

Babineau spoke publicly about the new in-house network on April 23, at a forum sponsored by the R.I. Health Insurance Small Business Task Force. [See link to ConvergenceRI’s exclusive coverage below.]

“We are limiting the choice of our employees, because that’s the only way I can control my costs,” Babineau said. Going to Boston for care, he predicted, “That’s going to go away. And that’s a good thing.”

Competition for share of women’s health market
As much as Babineau positioned Lifespan’s in-house network as a way to cut down on the amount of claims being paid to out-of-care state medical care going to Boston, the other apparent target – though not directly stated – is capturing a greater market share in women’s health, competing with Care New England's Women & Infants Hospital.

At first glance, the health and safety equation of encouraging Lifespan employees to give birth at Newport Hospital – the only hospital within the Lifespan system with maternity services – does not seem to add up.

At a time when Lifespan is promoting a continuum of care based around patient-centric services, why would Lifespan encourage a woman in labor to have to travel to Newport, on the tip of Aquidneck Island, 34 miles from Providence, given the costs, the inconvenience and the potential safety concerns? It also raises questions about coordination of pre-natal care.

Charging an employee a $400 co-payment for choosing to deliver her baby at Women & Infants – an in-state but out-of-system provider – would not seem to affect the flow of funds for insurance reimbursements to out-of-state care in Boston.

By the numbers, there were 10,432 births in Rhode Island in 2013, according to the R.I. Department of Health. Women & Infants delivers about 8,400 newborns a year, about 75 percent of all births in Rhode Island.

Westerly Hospital, as part of its merger with L+M Hospital in New London, Conn., closed its maternity services.

Landmark Medical Center, recently purchased by the for-profit Prime Healthcare Services, has seen a declining number of births in recent years, which may threaten its future capability to maintain maternity services. [The decline is due in part because Thundermist, a community health center in Woonsocket, created an affiliation with Women & Infants in 2012, sending its patients to give birth at Women & Infants instead of Landmark.]

Within Lifespan’s workforce, with about 70 percent of its 13,500 employees being women, the $400 co-pay fee to give birth at Women & Infants appears to have created some pushback: the initial $400 co-payment was apparently rolled back recently to $200 – though the plan is to return to the higher $400 charge beginning in 2015, according to a number of sources.

Further, it’s unclear how the issue of $400 co-payment will be handled as part of the upcoming contract negotiations with Rhode Island Hospital United Nurses & Allied Professionals Local 5098, which represents more than 2,200 nurses, therapists, technologists and other allied professionals. The current contract expires on Jan. 1, 2015.

Helene Macedo, president of Local 5098, did not respond to requests for comment.

Creating a ‘women’s hospital within a hospital’
In the broader health care delivery landscape, the $400 extra copayment fits into Lifespan’s efforts to capture a greater share of the women’s health market in Rhode Island.

With little public fanfare, a new, private 14-bed inpatient unit focused on women’s health and gynecological surgery recently opened in a wing at Rhode Island Hospital’s Jane Brown Building. Because of the small number of beds involved, no Certificate of Need was required, according to officials at the R.I. Department of Health.

“What we’ve created, essentially, is a women’s hospital within a hospital,” said Dr. Karen Rosene-Montella, Lifespan’s senior vice president for women’s services and clinical integration, in a news release. Rosene-Montella is a co-founder of Lifespan’s Women’s Medicine Collaborative, an outpatient medical group of women providers begun in 2011, many of whom had previously worked at Women & Infants.

In 2013, Lifespan partnered with Ob-Gyn Associates, Inc., one of the largest obstetrics and gynecology practices in Rhode Island, integrating them within services offered through the Women’s Medicine Collaborative. Many of the physicians from that practice now will be conducting surgery at the new “women’s hospital within a hospital.”

“Last time I checked, we were in a competitive environment,” said Mark Montella, senior vice president of External Affairs, in response to a question by ConvergenceRI about competition with Care New England for women’s health care services.

Montella declined to provide any numbers or percentages regarding the insurance claims flowing to Boston hospital and providers. [He is the husband of Rosene-Montella.]

“We want to squeeze out unnecessary utilization,” Montella told ConvergenceRI, as part of Lifespan’s three-year, $150 million expense reduction plan. “To the degree that we can, we want to avoid unnecessary premium sharing,” he continued, saying that Lifespan wanted to preserve the current amount of the employee’s share of health insurance coverage at 15 percent. “If we can keep care local, the economic value of that rebounds to the state.”

Some care, Montella admitted, because of its complexity and the fact that services are not available at Lifespan [or in Rhode Island], needed to go out-of-state: heart transplants, liver transplants, and lung transplants. “We send those out for referral,” he said. Out-of-state cardiac care and cancer care are a major part of the problem, he continued. “Check out the Blue Cross filings on hospital costs outside Rhode Island’s borders,” he said. “It’s not inconsequential.”

Further, Montella claimed that care was less expensive in Rhode Island. “Nobody wants to talk about the price negotiation restrictions [imposed] by OHIC in 2009. They only apply to Rhode Island [health] insurers. The [OHIC] restrictions on what health insurers can negotiate with us don’t apply to Massachusetts’ providers.”

According to Montella’s rationale, Lifespan is disadvantaged by the effective cost controls in Rhode Island. “If 30 percent of our spend is outside Rhode Island, we have to bear 100 percent of the cost containment.”

Following the money is difficult – without transparency
How much money in reimbursements is going to Boston? And, for what kind of care is it going? None of that information is transparent and available to the public.

The exact amount of reimbursements for health care services being paid to Boston hospitals and providers by Lifespan – either in dollars or percentages of claims paid – was not divulged by Lifespan or by Blue Cross, the administrator of Lifespan’s self-insured health plan, when questioned by ConvergenceRI.

The R.I. Office of the Health Insurance Commissioner said that it did not regulate self-insured companies and had no such data.

The only document provided by Blue Cross’s spokeswoman Stacy Paterno was publicly filed as a supplement to the health insurer’s 2014 filing for small business and individual plans, on Page 83 of the document, which broke down the total costs according to those who live in Rhode Island and those who are out-of-state residents.

Without transparency of data, it’s difficult if not impossible to calculate how much of Lifespan’s $140 million in health insurance costs is actually flowing to Boston – and for what specific kinds of care. One ends up with calculations that compare apples to oranges to grapefruits.

For instance, for all of the self-insured plans where Blue Cross serves as the administrator, there were $112 million in claims paid for care at inpatient facilities for Rhode Island residents, and $25 million for non-Rhode Island residents.

For non-Rhode Island residents, only $7.7 million was paid in claims for care at inpatient facilities in Rhode Island, while $77 million in claims were paid in claims to out-of-state inpatient facilities. In other words, people who are not residents of Rhode Island seek care at in-patient facilities that are closer to their homes – and not in Rhode Island.

The only obvious conclusion that can be drawn from such numbers is that people tend to seek services at facilities – at inpatient, at outpatient or at skilled nursing facilities near to where they reside.

From such numbers, it’s impossible to analyze what Lifespan’s share of the self-insured market is.

UnitedHealthcare did not respond to repeated requests for information.