Mercy Iowa City, other hospitals oppose $230 million UIHC development in North Liberty

IOWA CITY - More Corridor health care services are opposing than supporting University of Iowa Health Care's plans to build a multimillion-dollar complex in North Liberty - some asserting the public hospital system is proposing an inappropriate use of taxpayer funds, state records show.

Leaders of Mercy Iowa City, which is located just 2 miles from the UIHC main campus, called Thursday on the state hospital to instead collaborate with area organizations, saying the proposal is a detrimental encroachment on existing service providers already in the area.

'The resources and services that are being offered are not new to the Corridor; they are already being offered, quite frankly, by high quality institutions both (in Iowa City) and in Cedar Rapids,” said Sean Williams, president and chief executive officer of Mercy Iowa City, during a news conference. 'We're not bringing in new services into the state that don't exist now. We're just going to rearrange where those services are provided.”

As a state entity, UIHC has access to state funds and benefits that private, not-for-profit hospitals do not, which Williams argued creates an inherent disadvantage.

'Our argument would be that these are not two private entities that are competing in the free market,” Williams told reporters. 'This is a government-subsidized entity that has advantages we do not have. And so for them to crowd out private enterprise - or private not-for-profits in our case - we think isn't appropriate.”

UIHC facility construction, however, is not funded by tax dollars. The new development would be funded by financing and revenue from patient care, UIHC officials said in a statement to The Gazette.

'We respect there will be different perspectives on the proposed project and will address any concerns during the Certificate of Need process,” officials wrote. 'We look forward to providing more information once there is an update on the application process.”

After years of planning, UIHC unveiled plans for the $230 million construction of a 300,000-square-foot building on a 60-acre site on the corner of Forevergreen Road and Highway 965 in North Liberty. The four-story facility would house about 36 inpatient rooms, up to 16 operating rooms, a level 4 emergency treatment center, urgent care services and outpatient clinics, among other services.

The need is already met, some argue

The State Health Facilities Board - the government body that oversees the regulatory Certificate of Need process required to move forward with a development of this scale - is expected to review UIHC's application Wednesday. The goal of the process is to help prevent duplication of expensive medical services and to keep overall health care costs down.

Numerous letters were sent to the State Health Facilities Board since UIHC filed its application in December, all from area hospitals, local clinics and provider groups as well as independent physicians.

Many of these letters argued the patient need in the immediate service area already is being met by a dozen existing hospitals in a roughly 25 mile radius, accounting for more than 2,500 inpatient beds between them.

Other hospitals opposed to the development have also staked similar claims as Mercy Iowa City, noting that UIHC has an unfair advantage as a public hospital.

'UIHC is proposing to compete with the private sector on an unequal footing - threatening the existence of the private nonprofit hospitals in the service area that have served the community well for generations,” wrote Tim Charles, chief executive officer of Mercy Medical Center in Cedar Rapids, in a letter to the state.

UnityPoint Health-Cedar Rapids, the largest health system in Linn County, indicated it was neutral on the proposal.

However, it stated in its letter that it appeared to its officials that though UIHC identifies itself as a safety-net provider, it has been 'actively seeking more profitable business.”

'As noted in their application, UIHC continues to see ‘needs for increased access to its services including mental health services, women's services and neurosciences care,'” UnityPoint Health leadership stated in a letter to the state. 'Instead of furthering its mission across those needed service lines, it is spending $200 million to duplicate existing, high margin, service lines.”

UnityPoint Health said in a statement to The Gazette that officials 'respectfully request careful consideration of the fundamental issues that affect the communities we serve.”

Adding ‘much needed capacity' at UIHC

In an application to state officials requesting a Certificate of Need, UIHC officials say the development is aimed at improving patient access and easing congestion at the main campus as patient demand grows.

According to UIHC officials, high occupancy rates, which reached 96 percent on average in fiscal 2019, are stressing the hospital, creating a need to establish more 'much needed capacity.”

'UI Hospitals and Clinics continues to experience unprecedented demand for its services, and patients from across the state continue to travel to Iowa City for the complex care needs that only we can satisfy,” said Suresh Gunasekaran, CEO of UI Hospitals and Clinics, in a statement. 'We are confident that the addition of a North Liberty facility will help us meet the needs of Iowans both locally and from across the state.”

Much of the demand is driven by patient referrals from other hospitals in all of Iowa's 99 counties, including Washington County Health Center and Keokuk County Health Center that both submitted letters to the state board supporting the new development.

Jefferson County Health Center wrote to the state it relies on UIHC to provide specialized care to its patients, saying officials believe UIHC needs 'to have the space to provide care and bed availability for advanced complex needs.”

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