Steindler breaks ground in North Liberty for surgery center

NORTH LIBERTY — Despite inflation, labor cost and supply chain snags that stalled the original timeline, a new Steindler North Liberty Ambulatory Surgery Center is now under construction just east of Interstate 380, north of Forevergreen Road — adding to the health care construction boom underway in that community.

The Iowa City-based Steindler Orthopedic Clinic team members earlier this week broke ground on their new 35,880-square-foot, $29.3 million ambulatory surgery center — which is just one piece of a 36-acre health care campus Steindler envisions will include a new orthopedic clinic, hospital and hotel, among other things.

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“Beginning this afternoon, there's construction equipment showing up,” Steindler President and CEO Patrick Magallanes told The Gazette on Wednesday. “And Monday, there's going to be clouds of dust everywhere … The project is moving along.”

The surgery center is just west of where the University of Iowa is building a new 469,000-square-foot, $525.6 million hospital campus near the intersection of Forevergreen Road and Highway 965.

UIHC broke ground on its endeavor in September 2021, with expectations for an opening in July 2025.

Steindler also expects to debut its surgery center in early 2025 — after bumping up the timeline and cost due to inflation and world events. The UI Health Care project — although it hasn’t moved its timeline — cited those same reasons for increasing its budget 33 percent last year to half a billion dollars.

Surgery center

Features of the new Steindler North Liberty Ambulatory Surgery Center include six larger and modernized operating rooms for outpatient orthopedic procedures, with room to expand; 24 to 30 pre-operation preparation and recovery rooms; dedicated physical and occupational therapy space; plus business offices and conference rooms.

Because the 73-year-old Steindler Orthopedic Clinic has outgrown its 33,000-square-foot building in east Iowa City, leadership plans to build a new 71,000-square-foot clinic adjacent to the ambulatory surgery center that will include “state-of-the-art therapy and sports rehabilitation services.”

The site’s master plan includes a hospital and hotel, Magallanes said.

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“I am having different conversations right now and continue to have conversations with people interested in developing on the property — one is a hospital that's interested in putting a hospital out there,” he said. “And I’m talking with a couple of hotel groups.”

The North Liberty developments add to complexities shifting the health care market in the corridor — where Mercy Hospital in Iowa City, a longtime Steindler partner and UIHC competitor, is struggling financially.

Ortho competition

In its state application for approval to build in North Liberty, Steindler said patients more and more want care in a “non-hospital outpatient setting where outcomes are equal and cost is lower.”

That, along with the need for more modernized facilities and operating space, was behind Steindler’s justification to build, according to state certificate-of-need documents.

“Patients and payers are seeking access to more convenient, comfortable and less expensive options for outpatient services closer to home, with shorter wait times and more personalized care,” according to Steindler’s request to the State Health Facilities Council. “(Ambulatory Surgery Centers) deliver each of these in a non-hospital outpatient setting that is, on average, 40 percent less cost than outpatient hospital settings.”

Although UIHC in seeking state approval to build it hospital called the project an answer to a growing demand for tertiary and quaternary care that community providers can’t offer — treating the region’s sickest and most severe patients — UIHC also in recent months has marketed the North Liberty site as an “orthopedic hospital.”

“In 2025, we will move the department to a new musculoskeletal hospital in North Liberty,” according to a 2022 year-in-review email from Larry Marsh, chair and executive officer of the UI Department of Orthopedics and Rehabilitation.

In discussing the “orthopedic hospital under construction,” Marsh in that update said the emerging hospital will include a “floor devoted to education, an administrative floor for our offices, skills lab, gait lab, research-focused, weight-bearing CT and our biomechanics lab.”

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com