Regent questions UIHC justification for new patient tower next to Kinnick

IOWA CITY — Questioning the accuracy of numbers University of Iowa Health Care used to justify construction of a $2-plus billion inpatient tower on its main campus, along with the potential impact on traffic and the overall budget, Iowa regent David Barker in June told UIHC leadership he doesn’t believe an adequate case has been made for the new 842,000 square foot project to be built on its long-standing Iowa City site.

“For a $2 billion project, it seems to me that our analysis should be exhaustive,” Barker said in a June 2 email to UIHC Vice President for Medical Affairs Denise Jamieson after months of back and forth about the largest facilities project in state history.

“I do not believe that an adequate case has been made in our email exchange for the tower as it is presently envisioned,” Barker wrote.

Requesting any consultant or internal analysis reports the university might have procured or produced to assess the cost of building on the main campus next to Kinnick Stadium versus off site, Barker slammed a UIHC estimate that a central tower would save 26,000 “quality-adjusted life years” — equal to 260 centuries.

“You acknowledge that the estimate of 26,000 QALYs saved from a central tower ‘may not fully align with the specific conditions of our proposed expansion’,” Barker said in the email to Jamieson. “I would go further than that — the estimate was embarrassingly inaccurate. Frankly, this estimate has caused me to question the overall quality of the analysis that led to the tower proposal.”

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UIHC first aired plans for a new inpatient tower in 2022 as part of a 10-year modernization plan that also included a new academic facility and ambulatory care center. With the regents’ stamp of approval, the UI forged ahead with infrastructure and other projects enabling the tower — like construction of a new health sciences building behind Slater Residence Hall and approval to raze the Wendell Johnson Speech and Hearing Center, Hospital Parking Ramp 1, and old water tower.

Pitching the project as imperative to Iowa’s growing health care needs — anticipating UIHC by 2031 “will need over 400 additional beds to accept all of the patients that need to be seen” — UIHC in June brought to the board a request for approval of $72.5 million in phase-one “early work” for the new tower.

At that meeting, given pushback and questions from regents, UIHC Associate Vice President and CEO of the clinical enterprise Brad Haws acknowledged federal threats to Medicaid state directed payments — which are propping up the UIHC budget — could compel hospital administrators to “have a really honest conversation about the feasibility of the entire project and whether that still fits within our capital plans and affordability.”

A month later, according to emails obtained by The Gazette in response to an open records request, UI Senior Vice President and University Architect Rod Lehnertz told the board’s Executive Director Mark Braun the university is “going to do some evaluation of the UIHC Tower components, and potential timing.”

Citing “ongoing health care matters at the federal level,” Lehnertz said, “UIHC will assemble plans and messaging related to this short-term evaluation.”

But, he affirmed, the university “will hold for a moment” on choosing a firm to audit construction of the new inpatient tower — after issuing a call for proposals from prospective firms in early June.

“It is only viewed as a slight delay in the effort to secure an auditor, but we want to make sure what they intend to evaluate matches our intended scope,” Lehnertz said.

In a statement to The Gazette, UIHC said, “The University of Iowa is committed to building the Jacobson Tower, a transformative step in expanding world-class health care access for Iowans. As we continue to assess the impacts of the recent federal funding shifts, the university is reviewing the tower’s services.”

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‘When people complain’

That email came after Barker for months behind the scenes had been questioning the scope, scale, and specifics of the tower proposal — including back in February, when the board’s property and facilities committee convened behind closed doors for an “inpatient tower update meeting.”

Because that meeting involved just four of the nine regents — fewer than a majority — and did not involve decision-making, state law did not require it to be open to the public.

Regents involved in the Feb. 17 meeting included Barker, JC Risewick, Robert Cramer, and President Sherry Bates — along with board Executive Director Mark Braun and UIHC officials. Several weeks earlier, regents received preliminary budget and timeline details for the project that estimated the total spend at $2.4 billion — nearly $1 billion more than the $1.5 billion Lehnertz later stated publicly in June.

Prior to the February discussion, Barker emailed out a list of questions about the project — including spending and design plans.

“Tell me if I am understanding the projections correctly,” Barker wrote. “$1.25 billion of the cost will be funded out of UIHC cash flow. Our cash flow over the next 10 years is expected to be $5.44 billion. So we will be spending a little less than a quarter of our cash flow on the tower over the next 10 years.”

Barker also asked about design plans for a “cantilevered roof” — a portion of roof that extends out without supports below.

“Are we certain it would survive a derecho or a tornado? Are we certain that wind-driven water under the roof structure will not be a maintenance issue?” he asked in an email Feb. 15 before sending a separate request to board office staff that same day seeking “big financial picture” information.

Chief Business Officer Brad Berg confirmed that balances as of Dec. 31, 2024 held the university’s operating funds at $2.74 billion, a number that includes UIHC cash on hand, plus $524 million in an “intermediate” fund, and $681 million in its endowment.

The UI Center for Advancement at that time had $2.2 billion in assets, and the UI Strategic Initiative Fund — created through its public-private utilities partnership — had $1.2 billion in total assets.

Given all the information at his disposal, Barker at the time said, “I am generally sold on the tower,” but added a reference to the 14-story, 563,250-square-foot Children’s Hospital that saw its $270.8 million budget balloon to more than $400 million due to design changes, delays, mismanagement and contractor disputes.

“I keep remembering that if someone had asked why the last big building needed to be oval, we might have saved a lot of money,” Barker said to his fellow regents Feb. 17. “I also want to be sure we can explain our decision a few years from now when people complain about the cost.”

‘That can’t be right’

In that email, Barker questioned the claim that building on site would be better — for the budget and the patients — than moving the tower off site, asking whether UIHC had done any “rigorous analysis?”

“For example, would centralized care reduce the mortality rate?” Barker asked. “If so, how many (quality-adjusted life years) would that produce?”

UIHC VP Jamieson responded to Barker’s life-years question in April by sharing expectations of 11,400 admissions a year in the new tower, amounting to about 10,000 unique patients gaining a combined 26,000 life years annually due to centralized care.

“Something seems wrong with the math,” Barker said in an April 4 email. “How are they calculating 26,000 (quality-adjusted life years) gained annually?”

Digging into the research UIHC cited, Barker followed up with more questions and skepticism.

“If the savings are 26,000 for 10,000 unique patients, as suggested in the UIHC reply, that would mean that each patient would, on average, live 2.6 years longer because of a centralized location instead of a cornfield location,” Barker said. “That can't be right.”

Plugging in his own math, Barker cited research and UIHC analyses in factoring 40 life years saved due to centralized care, not 26,000.

“There would of course be additional (quality-adjusted life year) savings from reduced complications that are short of mortality, but still much less than 26,000,” he said, to which Vice President Jamieson conceded.

“The figures we referenced for the (quality-adjusted life year) estimate were drawn from published studies of highly acute service lines — such as centralized stroke, trauma, and complex cancer care — where the potential for improved outcomes and extended life expectancy is significantly higher,” she said. “That said, we recognize that applying those estimates broadly may overstate the average benefit across the entire inpatient population.”

Still, Jamieson said, even with modest gains of 0.01 life years per patient, “the case for centralizing inpatient services remains strong, particularly when combined with the operational, staffing, and financial advantages we expect to realize.”

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‘More analysis is needed’

In the days that followed, Barker continued to pore over the numbers and the London-based research UIHC cited — expressing skepticism of the anticipated life-year savings and attaching dollar figures to those savings, juxtaposed with anticipating building costs.

“Much of the gain from centralization in London was likely from increased volume of procedures,” Barker said in an April 14 email in reference to the research. “There is no reason to think that the volume of procedures of particular types performed by Iowa Health Care providers would be affected by the location of a new facility on Hawkins Drive or a non-central location.”

Working with the assumption that building the new $2 billion inpatient tower off the main campus would save 20 percent, plus more given design allowances, Barker said building the same amount of square feet off site could save more than $1 billion.

And then there are traffic considerations.

“Hospitals have been estimated to generate 20 vehicle trips per 1,000 square feet,” Barker said. “This would mean an additional nearly 17,000 daily vehicle trips in an already congested area. Studies have shown that ambulance transportation times are longer in congested areas.

“As you know, even small delays can significantly increase mortality,” he said. “It seems reasonable to expect that increases in mortality due to traffic congestion could be similar to expected decreases due to centralization of care.”

A month later, Barker followed up to see if the university had any response.

On May 14, Jamieson sent over a response from UIHC Chief Financial Officer Mark Henrichs, who confirmed much of Barker’s calculations.

“You are correct in pointing out that the (quality adjusted life year) estimates used in our initial documentation rely on comparisons that may not fully align with the specific conditions of our proposed expansion,” Henrichs said, calling the London-based centralized stroke care “a conceptual benchmark rather than a literal projection.”

“While the 26,000 (life years) figure may be overstated when applied directly to a mixed-acuity U.S. inpatient population, the underlying principle — that centralization improves access to subspecialists, accelerates time to intervention, and reduces transfers — is a key concept.”

And while agreeing for the most part with Barker’s cost assumptions, Henrichs pointing out that building off site would require duplication — including pharmaceutical, sterilization, and imaging services. He also cited the cost of patient transfers.

“Patient transfers between campuses — particularly for unstable patients — carry not only clinical risk but also cost and logistical complexity,” he said, mentioning also the academic piece of the UIHC mission.

“Locating the inpatient tower on the central UIHC campus allows us to maintain tight integration between clinical care, medical education, and research,” Henrichs said.

But Barker said he needs more analysis.

“I first asked these questions because I wanted talking points to justify the tower project to legislators, taxpayers, and patients,” he said. “After our exchange, however, I came to believe that more analysis is needed before we approve the project.”

Vanessa Miller covers higher education for The Gazette.

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