Orthopedics to dominate University of Iowa North Liberty hospital

About halfway through construction of the University of Iowa’s new hospital in North Liberty, its orthopedics department this week shared more details about plans to move its clinical, surgical, research and educational operations to the Forevergreen Road site — where they would make up the bulk of the facility’s offerings despite concerns from community health care providers that such care was already available elsewhere.

“Orthopedic spaces” in the new half-billion-dollar, 469,000-square-foot hospital near Forevergreen’s intersection with Highway 965 include 84 clinic exam rooms, 12 operating rooms, two procedure rooms and 36 inpatient beds — along with an orthopedic walk-in clinic, conference center, skills lab, research space and state-of-the-art indoor-outdoor physical therapy space.

That update from UI Orthopedics and Rehabilitation Chair Larry Marsh means much of the hospital will be dedicated to his department — considering a UIHC project status report in September saying the campus in total will feature 84 clinic exam rooms, 12 operating rooms, two procedure rooms, 36 inpatient beds and urgent care for orthopedic injuries.

“There is growing demand for orthopedic services, and the North Liberty location will provide an easy-to-access, drive-up location for patients with mobility challenges,” according to the September report. “Patients will be offered full orthopedic, sports medicine, and rehabilitation services at UI Health Care's North Liberty campus — from the first clinic visit, to surgery and inpatient services, if needed, as well as the ability to get labs, imaging, durable medical equipment, and pharmaceuticals on-site.”

When UIHC first applied to the State Health Facilities Council in 2020 for a certificate to build in North Liberty, its plans included 36 inpatient beds and many references to orthopedics, indicating orthopedic surgery would account for a “significant portion” of the service mix offered there.

But the state council denied that first application — in part due to opposition from community providers suggesting services, like the lucrative orthopedics care, already are widely available.

“UIHC … did not present testimony or other evidence that patients have or would experience serious problems in obtaining general hospital services or short-stay or outpatient orthopedic or other surgery services, if this project is not approved,” according to the state’s rejection. “The council concludes that patients will not experience serious problems in obtaining care of the type which will be furnished by the proposed health service, in the absence of that proposed service.”

UIHC returned months later with a revised application that stripped all mention of orthopedics, stressing the hospital would “expand access to tertiary and quaternary care, expand education and training programs, and grow biomedical research programs.”

“Tertiary and quaternary care is defined as care that is highly specialized care usually over an extended period of time that involves advanced and complex procedures and treatment performed by specialists in state-of-the-art facilities,” according to the revised application, which won state approval in August 2021, despite ongoing criticism from community health care providers.

Days after obtaining state approval for a $230 million 300,000-square-foot hospital, officials revealed the North Liberty project also would include an additional academic, research and clinics building — bringing the total square footage to nearly 470,000 and its cost to $395 million. Then a year later in August 2022, the university asked to increase the total project budget 33 percent to $525.6 million — due to inflation, supply-chain issues and higher labor costs.

North Liberty ortho hub

The new hospital is being built just east of where Iowa City-based Steindler Orthopedic Clinic is building its own 35,880-square-foot, $29.3 million ambulatory surgery center. Steindler President Patrick Magallanes has said long-term plans also include a new orthopedic clinic, hospital and hotel.

"I think choice is always a good thing in the context of market economics,“ Magallanes said Wednesday. ”What is interesting here is that they are different service line delivery sites. The UIHC center is a hospital, while the Steindler center is an ambulatory surgery center.“

Since both UIHC and Steindler starting building about a mile from each other, Steindler partner Mercy Iowa City earlier this year filed for bankruptcy. UIHC bought the community hospital in a sale on track to finalize Jan. 31.

“Mercy will cease operations on Jan. 30, 2024, and all ‘what ifs’ between Steindler and Mercy regarding developing Steindler’s real estate in North Liberty will be distant memories,” Magallanes said, acknowledging the potential for a Steindler-UIHC collaboration.

Regarding competition between the two within what is emerging as an orthopedic hub in North Liberty, Magallanes said the significant difference between a hospital and an outpatient ambulatory surgery center “quashes competition talk.”

“An ASC and a hospital are not the same, so the two projects are not the same,” he said. “That said, estimates suggest nearly three-fourths of ortho procedures will be performed in ASCs in five years.”

Steindler doesn’t plan to compete for hospital-based procedures, Magallanes said.

Project audit

  Buy Photo

In updating the Board of Regents last month on its North Liberty construction, which began in September 2021 and is expected to wrap in spring 2025, UIHC put the project just past the halfway mark.

External auditor Baker Tilly reported the construction piece of UIHC’s North Liberty contract obligation sits at $359.1 million, slightly below the $364.8 million in total construction costs the board approved when it upped the budget in 2022.

Through Sept. 30, according to the audit, UIHC had spent $184 million of its current construction contract obligation. That puts spending at about 51 percent of its budget, matching its timeline.

In evaluating project controls, Baker Tilly identified opportunities for improvement, including better communication within the UI and with vendors. The UI also didn’t keep a detailed risk log and “did not perform thorough project risk assessments in the planning phases.”

“We could find no formal project schedule control procedures,” according to the audit, noting, “Design changes occurring during later project phases potentially contribut(ed) to cost increases.”

“One of the things we really tried to look at was, as the budget and costs increased on this project, were approvals and controls in place to ensure that that wasn't related to late design changes, which are more expensive,” Baker Tilly Senior Manager Heath Whitaker told regents. “What we found was that there could be some increased visibility between the different project teams to ensure that the correct approvals are being performed to alleviate late design changes, making sure … the design is fully complete before moving into the execution phase.”

Regent David Barker asked Whitaker whether the project budget increase approved last year was due to late-design changes — instead of inflation and supply-chain issues, as the university said.

“We were unable to determine that,” Whitaker said.

  Buy Photo

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