116 3rd St SE
Cedar Rapids, Iowa 52401
NORTH LIBERTY — Given the state’s recent about-face in allowing construction of a $395 million University of Iowa hospital in North Liberty to proceed, it should grant the same permission for construction of a nearby, unaffiliated $17.9 million ambulatory surgery center, the proposed facility argues.
Steindler North Liberty Ambulatory Surgery Center is seeking a certificate of need from the State Health Facilities Council to erect a free-standing facility on 36 acres near the Forevergreen Road interchange with Interstate 380.
A proposed master plan for the project — which includes a 71,000-square-foot Steindler Orthopedic Clinic, relocated from its 33,000-square-foot Iowa City space, and a 36,000-square-foot ambulatory surgery center — puts it adjacent the upcoming UI Health Care development, which drew vocal opposition from community health care providers earlier this year.
“What payers, patients, the community, and private physicians NEED, and what this certificate of need application represents, is a choice,” according to the Steindler application, expected to be considered by the state this month.
“That is competition,” the applicant argues. “A choice will keep costs competitive, and that only happens if the choice includes a choice in modern facilities that are lower in cost.”
Citing points raised in the state’s consideration of UIHC’s application to build a new hospital in North Liberty — which the state council first denied and then approved after reviewing a revised application — the Steindler request notes that UIHC has admitted its academic medical center costs are steeper than community health care expenses.
“One way, perhaps the only way to help control pricing and cost, is to give a private physician development the opportunity to create pricing pressure,” according to the application. “Approving private practice investment in competitive facilities will absolutely keep health care costs in check and it may invite development of a community hospital presence (Mercy or others) that would be operationally efficient, proper sized, modern, and ideally located.”
Denial of the Steindler application, it argues, “will likely lead to market monopoly by UIHC and the loss of the private physician ecosystem.”
Although the certificate of need application under consideration is for the proposed ambulatory surgery center only, it paves the way for realization of the site’s master plan — which includes an adjacent orthopedic clinic, hospital, medical office building and hotel.
“The opportunity, in this instance, is for the State Health Facilities Council to evaluate the true nature of need in Johnson County and open the way for competitive investment,” according to the application. “Doing so will keep quality of care high and cost of care low for Eastern Iowans.”
The state council in August granted a certificate to UIHC to build a $230 million, 300,000-square-foot hospital in North Liberty. After receiving that approval, UIHC revealed it also plans to erect 169,000-square-feet of academic, research and clinic space on the site, bringing its North Liberty footprint to 469,000-square-feet and its total cost to $395 million.
A tentative timeline for that project has construction beginning this month and wrapping up in spring 2025. UIHC will tap revenue bonds, building usage funds, and donations to cover the costs — not taxpayer dollars.
Community health care providers pushed the state hard to deny UIHC permission to build, arguing they’re struggling to retain and attract staff, many have available beds and some could go out of business if UIHC veers into the community health care lane. UIHC officials rejected the notion it’s taking patients from community providers, noting expansion would allow it to continue serving the sickest Iowans who need tertiary care.
But Steindler in its application references challenges local providers are experiencing — in making the case for more facilities unaffiliated with UIHC.
In addressing the effect its development would have on other providers, the application notes Mercy Iowa City “is now seeing an impact on its outpatient orthopedic surgery utilization, but not due to Steindler Orthopedic Clinic surgeons but due to patient request and payer pressure.”
Steindler, in the application, said it expects an “argument will be made that Mercy Hospital Iowa City is dependent upon Steindler Orthopedic Clinic surgeons and the impact on Mercy Hospital Iowa City will be significant if Steindler Orthopedic Clinic surgeons are no longer doing outpatient orthopedic surgeries at the hospital.”
Steindler reports its surgeons have been “exceptional and loyal providers of orthopedic physician services to Mercy Hospital Iowa City’s patients.” But the application says Mercy Hospital Iowa City has “century-old infrastructure” and does not have the financial wherewithal to invest in new technology.
The application notes Steindler has invited Mercy Iowa City to participate in the North Liberty development. “Whether Mercy Hospital Iowa City intends to participate remains to be seen,” it says.
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