Specialties to be offered at new UI Hospital in North Liberty still ‘flexible’

NORTH LIBERTY — University of Iowa Health Care is planning $300 million in bond sales to help finance its new $395 million hospital in North Liberty — but not going to market until January, prompting the Board of Regents next week to consider action making proceeds from the debt sale retroactive.

“With this resolution, the hospital may reimburse themselves with bond proceeds (to be issued at a later date) for any project costs that may have occurred 60 days prior to the passing of the resolution,” regents spokesman Josh Lehman said.

If regents agree Thursday to adopt a resolution declaring their official intent to issue debt that includes reimbursing UIHC for project costs already spend — in accordance with U.S. Department of Treasury regulation — the campus could use future bond proceeds to cover costs incurred as early as Sept. 4.

“The University of Iowa Hospitals and Clinics (UIHC) requests adoption of a resolution that would permit UIHC to be reimbursed from future borrowing for costs incurred by the new UIHC at Forevergreen Road — construct facility project,” according to board documents spelling out the intent.

The massive project saw several delays this year in getting started. First, the State Health Facilities Council, after hearing widespread opposition from community health care providers, in February denied UIHC a certificate needed to move forward with Iowa’s biggest hospital project to date.

UIHC turned around a revised application for its 300,000-square-foot, $230 million endeavor by May. But an abrupt resignation on the state council considering the matter delayed the board’s reconsideration until late August, when it flipped its original 3-2 denial into a 4-1 approval.

Having already completed significant design and site work, UIHC on Sept. 7 received approval from regents — who called a special meeting — to begin construction on the North Liberty campus, which now included 169,000 more square feet that didn’t need state approval.

Although the hospital in September immediately began moving dirt on the project, now costing $395 million, the university held its official groundbreaking ceremony Oct. 14.

In its revised application in May, UIHC reported plans to cover $200,000 of the then-$230 million project cost using bond debt. The hospital, at that time, reported having $30 million “cash on hand.”

Details of how much UIHC has spent to date on the project haven’t been made public. But the university has contracted Shive-Hattery for $8,000 in land survey work and then signed an agreement Oct. 14 to pay the company nearly $46,000 for inspection and testing services.

Future of orthopedics?

In its original proposal last December for a new hospital at the southwest corner of Forevergreen Road and Highway 965, UIHC said it planned to migrate a core set of “shorter inpatient stay and related ambulatory interventional services” from its main campus — requiring 36 beds.

“Orthopedic surgery would account for a significant portion of the initial service mix,” the application said. “Moving these high-volume, high-growth services to a new campus would not only decongest UIHC Main Campus but also provide a more efficient platform to accommodate growth.”

That original proposal committed half the planned beds — the biggest chunk of 17 to 18 — to inpatient orthopedics, and another 11 to 14 for “ambulatory recovery,” namely hip and knee arthroscopes and carpal tunnel procedures, which also involve orthopedics.

In highlighting how reliant local hospitals are on UIHC to take patients needing expert-level care from them, UIHC at its first hearing in February shared that in the 2019 budget year it took 344 “general medicine” transfers, 187 pediatric transfers, 173 general surgery transfers and 109 neurology transfers. Lower down the list, UIHC reported taking 40 orthopedics transfers — including 11 characterized as “higher complexity” and 29 as “lower complexity.”

During its first hearing, the UIHC began testimony from supporters with Larry Marsh, head of its Department of Orthopedics and Rehabilitation, who noted the “outdated, cramped, cluttered, small facilities to do what we do.”

“They work for us,” he said. “But being able to move into a better environment with better space and modern space for our education would be just fantastic.”

Critics at that hearing accused the UIHC of veering out of its lane and into community hospital territory — threatening their existence and specifically calling out UIHC’s lucrative orthopedics intentions, with one man referring to the new North Liberty location as a “big ortho hospital.”

Michelle Niermann, president and chief executive officer of UnityPoint Health in Cedar Rapids, told state council members she found the UIHC proposal “difficult to understand.”

“Rather than proposing a project that clearly and first focuses on expanding their capacity for those patient care services they uniquely offer, they are instead proposing to offer primarily orthopedic, urology, and GI procedures — procedures that are outpatient in nature and that are core offerings of our community hospitals,” Niermann said in February. “These procedures are high volume, they're driven by demographics, and they yield some of the strongest margins in health care.”

After the February rejection, UIHC made a revised application that stripped away much of the orthopedics talk and focused on serving the state’s sickest patients.

When asked after receiving state approval if UIHC still plans to move orthopedics to North Liberty, UIHC provided a statement to The Gazette.

“Our plans for this facility remain flexible as we continue to evaluate and determine which clinical specialties will be offered on the new campus based on patient demand,” it read. “Based on this patient demand, orthopedic subspecialties may be included at the new location.”

Steindler Orthopedic, based in Iowa City, through a collaborator recently proposed building an ambulatory surgery center and orthopedic clinic near the UIHC project. That project was supposed to be considered this month by the state council, until a publicly unnamed hospital system approached Steindler about a potential partnership involving an inpatient hospital.

Steindler requested its project be tabled until early next year — giving it time to redraft.

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