UI Health Care job offers go out to Mercy docs, staff

IOWA CITY — Just weeks away from “day one” of a merged University of Iowa-Mercy Iowa City endeavor through which the 150-year-old Mercy Hospital will morph into UI Health Care’s downtown campus, job offers are going out to more than 1,100 prospective transitioning employees.

Of more than 90 physicians employed by Mercy when it filed for Chapter 11 bankruptcy Aug. 7 — a number reported by Mercy Chief Restructuring Officer Mark Toney — UIHC in the final weeks of December made job offers to 53, or nearly all the Mercy physicians currently on staff, UIHC reported.

“More than half have accepted to date, and we continue to receive acceptances,” according to UIHC spokeswoman Laura Shoemaker. “It is our hope that all Mercy Iowa City physicians will choose to transition to UI Health Care as we grow our team and work to deliver high-quality care to our patients and communities.”

In addition to Mercy physician offers, UIHC is in the process of offering employment agreements to about 1,100 Mercy staff members — including advanced practice providers, nurses, nursing assistants, receptionists, administrators, janitorial workers, and food service providers.

“We're calling them employee letters because they're currently employees — so it's not really an offer of new employment, but it's a transition process,” UI Health Care Vice President for Medical Affairs Denise Jamieson told The Gazette about an application portal the university created “to make it as easy as possible for current Mercy employees to apply for a job in the new system.”

“We had almost 100 percent participation, which we were really happy about,” Jamieson said in an interview about Mercy staff applicants.

Like the doctors, however, not all staffers have accepted UIHC’s job offers — although the deadline to do so hasn’t arrived for some, with offers still going out through today.

“We're asking them to get back to us within three days so that we can very quickly accelerate the process of bringing all these people into our system,” Jamieson said. “Because it's complicated.”

‘Complicated and expensive process’

Adding hundreds, if not more than 1,000, new employees to UIHC’s 11,200-strong workforce in a matter of weeks is among the many complexities involved in transitioning a Catholic community hospital — with decades-old partnerships, 18 clinics, 3,000 contracts, existing patients, and aging facilities — into a thriving and expanding academic medical center touted as the largest health care system in Iowa.

“This is a complicated and expensive process,” Jamieson said. “We anticipate that, as a site, Mercy is not going to make money anytime in the near future. We understand that, and we've built that into our projections.”

On top of adding hundreds of salaries and benefit packages to its payroll, UIHC through its bankruptcy bid to buy Mercy agreed to pay $28 million up front, cover Mercy’s mounting operating losses after Dec. 1, and invest another $25 million into infrastructure improvements on the Mercy campus over five years.

“Change can be very stressful, but I don't think there's any way anybody is going to look back five or 10 years from now and say, ‘We should have just let Mercy close’,” Jamieson said, pointing to worsening overcrowding issues at UIHC in addition to Mercy’s storied history and loyal patient base. “We need the beds to be able to serve the community.

“And so I think, in the long run, it's going to be a great thing.”

Faculty ‘just like everybody else’

Right now, though, Jamieson said, “It’s a lot for people.”

That includes both people already working at UIHC and those transitioning from Mercy, which has 194 licensed beds in an acute care hospital, an emergency department, obstetrics and gynecology, cancer care, behavioral health care, and family health centers, among other services.

Different UIHC departments have made individual employment offers to Mercy doctors, according to Jamieson. Should they accept, those doctors would move from a private system to a public academic medical center that’s required to publicly report salaries.

“One of the things that we've talked about with the current Mercy employees is this era of transparency, so now all salaries will be publicly available — which I think is a really good thing because we want to be fair and equitable across the system,” Jamieson said. “We don't want to have special, closed-door deals where somebody comes and says, ‘I'm special, and I want to be paid a lot more’.”

UIHC — in its aim toward “equitable” offers — has reviewed what Mercy employees are making, considered national and local benchmarks, and weighed years of experience. Generally speaking, Jamieson said, 10 percent of its offers amount to raises, 10 percent would mean pay cuts, and 80 percent are on par with current wages.

Additionally, because providers must be on faculty to practice at UIHC, Mercy doctors who take jobs with the university will become faculty, “just like everybody else,” Jamieson said.

“Most of them will be instructors,” she said. "That designates that they are faculty but don't have the same academic responsibilities — in terms of teaching and research that, for example, tenure-track faculty here have.“

Mercy — unlike UIHC’s closed staff model — historically has operated with an “open medical staff,” meaning practitioners from private clinics in specialties like OB-GYN, orthopedics, or cardiology can get medical privileges there.

“Here is a closed medical staff; you have to be faculty to practice here,” Jamieson said. “There, we are fully committed to ensuring that it remains an open medical staff.”

Mercy staff doctors who do accept offers to become UIHC faculty physicians are asked to sign noncompete clauses — which Jamieson said is the current industry standard. The clauses restrict providers from practicing for entities other than UI for two years within a certain distance — depending on the field of medicine.

For example, the clauses restrict practicing for competing entities within 50 miles for fields like emergency medicine and orthopedics and within 20 miles for general internal medicine and general pediatrics.

Mercy financials, future

Despite contractual changes for existing Mercy employees, the university aims to keep hospital operations as stable as possible once the transaction is final.

“Patients should know that they should continue to get care at the same place with the same providers with the same staff,” Jamieson said. “We're keeping everything as much as possible the same.”

Although objections and contentions still loom in the Mercy bankruptcy, Jamieson said UIHC is “full steam ahead” in its Mercy acquisition, and any issues yet to be litigated will be handled without UIHC involvement.

“What will happen is the bankruptcy process that we're not part of will separate and go a separate way,” Jamieson said. “When we start Jan. 31, it's a new day. We start with a clean slate.”

Mercy, according to its most recent financial filing, reported cumulative operating losses of $20 million from its Aug. 7 bankruptcy filing through the end of November. That total included a $5.6 million loss just in November and a drop in net worth to $86.5 million from $97 million in August.

With total post-petition debt swelling to nearly $150 million — compounding its pre-petition debt of $62 million to secured creditors and nearly $19 million to unsecured creditors — Mercy’s liabilities sit at more than $230 million.

Mercy also owes millions to pensioners, attorneys, and other professionals who are fast accruing fees — all of which UIHC will leave behind should it take over operations as expected Jan. 31.

“What we hope for is that we're creating a sustainable system for them, so that the employees know that when they sign on with us, they're within the safety net of the university system,” Jamieson said. “They don't have to worry every month about who's buying and selling and transferring and cuts. It's going to be the stability of the University of Iowa Health Care System.”

When asked about the potential for future changes to the Mercy site, Jamieson said, “It really is too soon to determine what it's going to look like long term.”

“We're really focused on continuing services now,” she said, “and then thinking about a long-term coordinated plan while preserving what's really special about Mercy.”

Part of that, Jamieson said, is its service mission.

“That history of service is really strong at Mercy,” she said. “And being a public institution here at the University of Iowa, there's a strong focus on service. And so I think there's a real opportunity to align our missions.”

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Vanessa Miller covers higher education for The Gazette.

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