‘We do not know what God has in store for Mercy’

IOWA CITY — On a foggy afternoon last week inside a full sanctuary across the street from Iowa City’s community hospital — that for 150 years has delivered babies, mended bones, nursed pneumonia and shepherded patients and families through trauma, fear and even death — a trio of Mercy sisters stood, turned to face the congregation and raised their arms to bless the transitioning hospital.

“To let go doesn't forget,” the Rev. Jenny Seylar, lead chaplain for Mercy Iowa City, said from the pulpit inside Zion Lutheran Church during a memorial service for the hospital — which later this week is expected to officially transition to University of Iowa ownership.

“To let go is to cherish memories. It's having an open mind and confidence in the future,” she said, quoting an unknown author. “Letting go is learning and experiencing and growing. To let go is to be thankful for the experience that made you laugh and made you cry and made you grow. It's about all that you have, all that you had, and all that you will have again. Letting go is having the courage to accept change and the strength to keep moving. Letting go is growing up in wisdom. To let go is to open the door, and to clear a path and to be set free.”

  Buy Photo

After years of financial decline, a contentious bankruptcy that saw twists and turns and backroom feuding, and a flip-flopping auction that eventually sold Mercy to the UI for $28 million, the hospital is set Wednesday to lose its private status and religious affiliation — among other things — and gain, with its transition, a new name: “University of Iowa Health Care Medical Center Downtown.”

“We do not know what God has in store for Mercy Iowa City as it becomes part of the University of Iowa Hospital,” Seylar said. “Yet we will continue to care well for patients, and we will stand as a pillar in this community and in Southeast Iowa.”

As part of the transfer, about 1,000 Mercy “team members” — including 45 physicians and 33 advanced practice providers — will become UIHC employees.

  Buy Photo

Earlier this month, UI Vice President for Medical Affairs Denise Jamieson told The Gazette the university made job offers to about 1,100 Mercy staff — including advanced practitioners, nurses, receptionists and food workers — in addition to 53 physicians, nearly all those remaining from the 90-plus doctors reportedly working for Mercy when it filed for Chapter 11 bankruptcy Aug. 7.

While most Mercy employees accepted the offers, some didn’t. The new compensation packages weren’t always commensurate with what Mercy paid.

“One of the things that we've talked about with the current Mercy employees is this era of transparency,” Jamieson said. “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. 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’.”

  Buy Photo

Kathy Shemanski, 64, is among the longtime Mercy employees who accepted a UIHC offer — having worked in its dietary department and patient transfer for nearly 45 years. With her retirement looming and questions about pension plans and patient care and decades of legacy hanging in the balance, Shemanski said she was happy UIHC landed the sale.

“Because they promised they would keep us as a community hospital,” Shemanski said. “That was really important to us and the patients. I chat with the patients a lot when I'm transporting them. And they're always asking me, ‘I hope you stay in hospital.’ It's comforting to be able to tell them, ‘Yes, we're going to stay at a hospital.’”

A recent report from a “patient care ombudsman” — assigned by the bankruptcy court to monitor patient care — noted “various staffing strain points.”

“At the time of (the ombudsman’s) visit, staff were in the process of receiving official position and compensation information for university employment,” according to the report. “For some, the reported benchmarking of their role at UIHC was at a level that was inconsistent with their Mercy status.”

Although the ombudsman “consistently heard comments that supported the university transaction as the best outcome from those available,” she also warned “some level of staff and/or clinician departures could occur.”

“A handful of staff resignations were reported to (the ombudsman) as she met with various leadership and team members across the organization during her site visit,” according to the report, anticipating a 90 percent offer-acceptance rate.

  Buy Photo

‘The safety net of the university’

Given vast differences between community hospitals and sprawling academic medical centers — like UIHC, the largest health care system in Iowa — Mercy Iowa City, although now owned by the university, will be allowed to continue operating in many of the same ways it has thanks to separate bylaws approved by the Board of Regents during an emergency meeting last week.

“Upon completion of the sale, UI Health Care will operate two separately-licensed hospitals,” UIHC Associate Vice President for Legal Affairs Joseph Clamon told the regents. “The two hospitals will have two separate medical staffs.”

Under the separate bylaws, the traditional UI Hospitals and Clinics on Hawkins Drive will maintain a “closed medical staff” — meaning members must hold a faculty appointment with the UI Carver College of Medicine to practice and provide care there.

“The downtown hospital will continue to maintain an open medical staff — that is a medical staff that doesn't require a faculty appointment to maintain medical staff privileges,” Clamon said of the Mercy model allowing affiliates with other clinics specializing in orthopedics, cardiology and obstetrics to care for patients in its facilities.

Before approving the bylaws Wednesday, Regent Jim Lindenmayer raised a question looming over the transaction — a question yet to be answered or evaluated in depth, with administrators and attorneys focused on immediate transition details.

“I noticed you're operating under two different licenses,” Lindenmayer said. “And I assumed because of the open and closed nature of the staff that's a transitional thing and that eventually maybe we would move to one entity.”

Clamon answered, “I wouldn’t foreclose either way.

“But I think, for the foreseeable future, we intend to operate as two separate hospitals, with two separate medical staffs, because it's so important for us to make sure those private physicians in the city have a place that they can practice,” Clamon said. “But obviously into the future we'll continue to evaluate what's best for the state as a whole.”

Jamieson transmitted that same sentiment to The Gazette earlier this month, stressing the focus for right now is on stability.

“I think that it really is too soon to determine what it's going to look like long term,” Jamieson said of the Mercy campus. “We're really focused on continuing services now and then thinking about a long-term coordinated plan while preserving what's really special about Mercy.”

Of course, there will be some changes “to better serve this region.” She pointed to the benefit of having one ambulance service responding to 911 calls in the area.

“If you think about the emergency departments, we've got one emergency department here, we've got one at Mercy and we've got one coming on line at North Liberty,” she said, referencing a new UIHC hospital under construction in North Liberty. “To have all the emergency departments running independently and separate, without being coordinated, doesn't make sense.”

With Mercy looped in, Jamieson said the university can create a “really nicely coordinated system” that, for example, directs ambulances to North Liberty for broken bones, to Mercy for illnesses like the flu and to UIHC for major trauma.

“What we're really trying to build is care coordination for patients — a coordinated system that works well together and really increases access to care,” she said, while stressing the importance of providing stability for patients and workers.

“We anticipate that, as a site, Mercy is not going to make money any time in the near future,” she said. “We understand that and we've built that into our projections. But what we anticipate and 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.”

Transition hurdles

To that end, at least in the near term, job duties aren’t changing for many Mercy employees — even as the signs outside do.

“Mercy is always going to be Mercy to me,” said Stacy Schooley, a Mercy dietary worker for 25 years. “I’ll probably always call it Mercy.”

  Buy Photo

Schooley and Shemanski said they’ve noticed religious artifacts coming down and the Mercy name being erased — as the brand wasn’t part of the UI sale.

“Mercy Iowa City retained ownership of the Mercy name as part of the transition agreement,” according to UIHC information on the rebranding.

What will be included in the sale still was being ironed out last week when attorneys convened before a bankruptcy judge on the contentious issue of Mercy’s electronic medical record system, which Mercy blames for having put the hospital in financial peril in the first place.

“To date, your client has continued to refuse to honor its contractual obligation to provide transition services to the University of Iowa, unless (Mercy) accedes to your demand,” a Mercy attorney wrote Jan. 9 to an attorney for Altera Digital Health Inc. — Mercy’s electronic medical record provider, which the attorney in that same letter called “a complete and utter failure.”

“This improper demand for a release has the potential to jeopardize the upcoming closing of the sale and shutter the hospital, causing the loss of countless jobs and endangering patients’ lives,” the attorney wrote.

“Over the course of nearly two years, (Mercy) has continued to seek assistance from Altera in order to remediate the harm caused by this (electronic medical record) implementation. Put simply, (Mercy) is in Chapter 11 and a primary cause of the filing was the willful failure of Altera to implement its EMR system as required.”

In that letter, Mercy included a graphic showing its total cash collections tanked from over $14 million a month to under $6 million a month upon a “go live” of the new records system.

In response, Altera blamed Mercy for risking a “go live all at once, instead of Altera’s normal execution of a staggard approach.” Plus, Altera argued, Mercy’s problems started long before Altera got involved.

With insults and accusations still flying Jan. 19 — including an Altera demand for up to tens of millions and a threat of refusal to collaborate with UIHC for the transition — the parties managed a settlement by Jan. 22 that has Altera cooperating with the record transfer.

“I have very good news to report,” Mercy attorney Dan Simon told a bankruptcy judge last Monday. “We spent pretty much all weekend preparing for a contested hearing … But we also used that time for negotiating. So we have reached an agreement with Altera on the terms of a settlement.”

Altera had asserted a $9.6 million claim against Mercy; an administrative claim of $2.8 million; and — if the agreement it had with Mercy was rejected — a potential damages claim of $50 million, according to court records. But details of the settlement indicate Altera on Jan. 31 will enter a new agreement with the UI and free Mercy of “any amounts owed to Altera” under its former agreement.

Altera can maintain a $6 million unsecured general claim as part of the deal — which has the electronic medical record provider and Mercy both releasing each other from all claims and potential lawsuits.

“This was a very critical issue coming in today that had the potential to jeopardize the sale transaction with the university,” Simon told the judge Monday. “Altera is Mercy Hospital's electronic health record — and the backbone of the hospital. Put simply, without the services of Altera and the software and the licenses provided by Altera, the hospital could not function. It could not schedule patients and collect, etc.”

The deal ensures the UI will have access to the record system for as long as a year, Simon said. “This will allow the university to close in a timely manner.”

Leaving Mercy Iowa City

Given the changes in ownership and long-term unknowns related to services, staffing needs and infrastructure upgrades — with UIHC committing to infuse $25 million into the campus over five years — not all Mercy doctors and employees stayed. Some swapped affiliation with other nearby hospitals — like UnityPoint-St. Luke’s Hospital or Mercy Medical Center, both in Cedar Rapids.

“We are excited to announce North Liberty Family Health Centre will join the UnityPoint Clinic Cedar Rapids family,” that clinic told patients in an Oct. 10 letter about its switch from Mercy Iowa City affiliation. “Our transition to UnityPoint Clinic is a perfect partnership, as we share the same medical philosophy — that patients and their families matter.”

UnityPoint spokeswoman Sarah Corizzo said several doctors and former Mercy Iowa City-affiliated clinics have considered joining its system.

“UnityPoint Health-Cedar Rapids always welcomes new patients, providers and team members into our organization,” she said. “While we do not have any specific numbers to share, we have had individuals reach out and explore their options for care and employment.”

Similarly, Mercy Medical Center has had several Mercy Iowa City staffers join its ranks, according to spokeswoman Karen VanderSanden.

“In addition, over the last few years, Mercy Cedar Rapids has signed several former Mercy-Iowa City providers — including specialists and primary care physicians,” she said. “Many have cited the importance of working in a community setting and the culture of an organization based on the mission of the Sisters of Mercy as rewarding, and they want to continue working in that type of environment.”

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