High costs, lack of planning and collaboration behind University of Iowa hospital rejection

IOWA CITY - Steep project costs, lack of collaboration, insufficient planning, inefficiencies and potential harm to community health care providers are among the reasons a state council in February denied University of Iowa Health Care a certificate to build a $230 million hospital in North Liberty, records released Tuesday show.

'The cost of the project is $230 million for a 36-bed facility, a cost of over $6 million per bed, making this one of the most expensive proposed projects in council history,” according to written decision from the State Health Facilities Council made public more than a month after its 2-3 vote Feb. 17 to deny UIHC's application for a 'certificate of need.”

Citing over seven hours of testimony that council members considered in determining whether UIHC met a four-pronged legal standard allowing them to grant a certificate to proceed, the decision noted, 'UIHC failed to establish that less costly, more appropriate alternatives are not available.”

In fact, according to the decision, evidence showed that 'less costly alternatives” are available, including collaborations with other current providers, improving efficiencies at the UIHC main campus, or renovating or expanding the UIHC main campus.

UI Health Care wants to build a 216,180-square-foot, four-story hospital on 60 acres at the southwest corner of Forevergreen Road and Highway 965 in North Liberty by 2024. UI Vice President for Medical Affairs Brooks Jackson - one week after the rejection - told the Board of Regents he expects the project eventually will materialize.

At the time of the rejection, UIHC said it would await the council's full written ruling before deciding how to proceed. Officials reiterated that position Tuesday after it was released.

'This feedback will better help us to evaluate all options for how best to serve the complex health care needs of Iowans, who deserve to have access to high-level specialty care here in our state,” a statement said.

The council's decision in February, according to the narrative, hinged on its findings that UIHC failed to meet all four of the required standards.

The Iowa Legislature says the council can grant a certificate of need 'only if it finds” the following four factors exist:

' Less costly, more efficient or more appropriate alternatives are not available or are not practical;

' Existing facilities providing similar services are being used appropriately and efficiently;

' Alternatives - like modernization and shared arrangements - have been considered and implemented to the maximum extent;

' And patients will experience serious problems in getting care without the proposed facility.

The council determined UIHC 'did not establish that it collaborated with the local facilities prior to submission of their application.”

To the requirement of the appropriate use of existing facilities and providers, council members questioned conflicting UIHC testimony.

Although UIHC asserted its North Liberty operation would offer more complex services to sicker patients than are treated at community hospitals and ambulatory surgery centers, the council pointed to the UI application characterizing its proposed campus as a 'general acute hospital” offering 'general and specialized hospital services.”

'The letters and testimony established a lack of collaboration by the UIHC with local providers, that excess capacity exists at current facilities, that the UIHC is proposing to conduct procedures that could be provided by the community-based hospitals and ambulatory surgery centers in the area, and a substantial concern about the future viability of existing facilities if the UIHC is allowed to build the hospital,” according to the written decision.

'The council also notes that the UIHC plans to hire 535 staff for the new hospital,” according to its decision.

'Noted by the opposition during testimony were concerns that the UIHC would actively recruit staff from Mercy Iowa City and other providers in the area.”

The council received 27 letters of support for the UIHC project and 53 letters of opposition.

Critics accused UIHC of failing to be a 'good steward” of health care resources - citing substantial cost overruns on its Stead Family Children's Hospital project, which was the subject of a 2018 investigation by The Gazette.

To the question of whether UIHC has considered modernization or shared arrangements, the council noted the university indicated in its application it 'did not have a long-range development plan and that they would engage planning experts to consider how to best use both campuses only if their (certificate of need) was approved.”

Regarding patient harm - should the UIHC project fail to materialize - the council determined plenty of space exists at other facilities.

'There are nine hospitals in the service area,” according to the decision.

'Both Mercy Cedar Rapids and Mercy Iowa City report a 10 minute wait time in their respective emergency rooms, while, according to opposition testimony, patients may wait several hours in the UIHC emergency room before being seen.”

During testimony in February, UI Hospitals and Clinics Chief Executive Officer Suresh Gunasekaran rejected assertions his enterprise is veering outside its lane to compete with other nearby hospitals. The UI facility treats sicker patients, many of whom are transferred to its emergency room from the community providers, he said.

The hospital now is near capacity and forced to offer mostly double rooms - and pining to offer better accommodations for both patients and providers.

'The university for many, many years has expanded its capacity to continue to meet the needs of Iowans, and at the same time community hospitals have thrived,” Gunasekaran told the council.

UIHC officials have not announced what their next move will be.

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