Mercy Cedar Rapids eyes ‘off-site location’ in North Liberty

Continuing its expansion, in concert with an explosion of health care services in North Liberty, Mercy Medical Center in Cedar Rapids is considering offering services at an “off-site location” in Johnson County — where University of Iowa Health Care also is building a 469,000-square-foot hospital and Steindler Orthopedic is constructing a 35,880-square-foot ambulatory surgical center.

The Mercy proposal for North Liberty became public last week when it was included on an agenda for a previously-unplanned meeting Tuesday of the State Health Facilities Council — a five-member, governor-appointed committee charged with making sure “growth and changes in the health care system are orderly and cost effective, and that the system is adequate and efficient.”

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The council grants and denies health care providers the “certificates of need” required — according to state law — before developing a new or changed institutional health service in Iowa or before purchasing medical equipment costing more than $1.5 million, among other things.

Mercy Medical Center is on the meeting agenda under a “determination of reviewability” — meaning the council will discuss and determine whether Mercy’s project requires a certificate of need.

The agenda item notes only that Mercy wants to extend its hospital license to an off-site location in North Liberty, but doesn’t provide further details.

When The Gazette requested Mercy’s letter seeking determination of whether the project requires a certificate of need, an Iowa Department of Inspections, Appeals and Licensing spokeswoman said, “Letters of nonreviewability before the State Health Facilities Council are not public information unless the council determines a certificate of need is required. At that time, it is treated as a letter of intent and can be shared.”

Mercy Medical Center is Cedar Rapids’ second-largest hospital with about 450 beds, behind UnityPoint Health-St. Luke’s Hospital, less than a mile away with about 530 beds.

Mercy has been expanding its off-site locations in recent years, opening a free-standing emergency room in Hiawatha in 2020 and now building a second free-standing ER in Marion, with plans to open in December.

UIHC, Steindler certificate of need

UI Health Care has the state’s largest hospitals and clinics system, with 889 inpatient beds on its main campus, including 205 pediatric beds at its UI Stead Family Children’s Hospital; 234 beds at its new Medical Center Downtown, which previously was Mercy Iowa City; and up to 48 beds set to come online next year with the opening of its North Liberty campus.

When the university in 2020 applied for its certificate of need to build its new hospital in North Liberty, an array of community hospitals and health care providers — including Mercy Cedar Rapids, St. Luke’s and Mercy Iowa City — spoke in opposition, arguing UIHC would pull from its primary care patient base.

Mercy Iowa City at the time said allowing the university to build a new orthopedic-focused hospital in North Liberty could drive them out of business, and the state council denied UIHC the certificate it needed to move forward.

But after UIHC pulled all mention of orthopedics from its application and revised the documents to focus on its unique ability to treat the sickest and most complex cases, the state granted the university a certificate to build in North Liberty in August 2021, enabling construction to start days later.

Although that project initially was supposed to cost $395 million, the university a year later in August 2022 went to the Board of Regents for approval to increase the budget 33 percent to $525.6 million — due to inflation, labor costs and supply chain issues.

Meanwhile, Mercy Iowa City’s financial position continued to decline — culminating with its bankruptcy in August 2023 and UIHC’s formal takeover of the longtime competitor in January, following its winning $28 million bankruptcy auction bid.

Months after the university started its North Liberty build, Iowa City-based Steindler Orthopedic Clinic submitted and received approval for a certificate of need to build a new ambulatory surgery center on 36 acres just a 1.5 miles west in North Liberty.

Steindler broke ground on its project in July 2023, with plans to open next year — like the university’s North Liberty hospital.

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