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University of Iowa Health Care reapplies to build North Liberty hospital
New $230 million application stresses need for complex care
IOWA CITY — University of Iowa Health Care has reapplied for the state certificate it needs to build a new $230 million facility in North Liberty after its first request was denied amid criticism it was swerving out of its lane, taking patients from community hospitals and clinics, and threatening those facilities’ existence.
Although the new application still seeks to build on 60 acres at the southwest corner of Forevergreen Road and Highway 965 in North Liberty — which the University of Iowa bought for $14 million in a pair of deals since 2010 — UIHC this time is re-characterizing its request as a “modernization” of its health facility.
The project, according to UIHC application language submitted May 20 to the state’s Certificate of Need Program, “is a combined, comprehensive approach of collaboration, modernization and construction at 200 Hawkins Dr. and additional institutional health facility space at Forevergreen Road to modernize the existing UIHC institutional health facility to address the unmet tertiary care needs of Iowans.”
Throughout the application, UIHC references its mission to provide “tertiary and quaternary care,” defined as “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.”
While the first 25-page application used the word “tertiary” five times, the new 40-page application uses it 28 times.
“UIHC’s current infrastructure is inadequate to meet Iowa’s current tertiary care needs, let alone Iowa’s anticipated future need,” according to the new application.
Although many aspects of the proposal are similar to the original, the new application ups the proposed North Liberty facility’s total square footage from 216,180 gross square feet to 280,330.
It increases the number of in-patient beds it plans to relocate from the main campus from 36 to 48 — but specifies those would be for patients needing “tertiary care.” Officials also stress those beds are “not new licensed beds.”
And UIHC officials said the 12 additional beds would be “shelled,” meaning they wouldn’t be added at the outset but would be made possible if growth needs arise.
As with the first application, the new version proposes 16 operating suites — which it is specifies would be for “training providers, testing technology and multispecialty tertiary care.” The new proposal also includes imaging, pathology, pharmacy and emergency room services in the facility right off Interstate-380, access that also makes the proposed build appealing, according to the UIHC application.
“UIHC anticipates that the project will improve the distance, convenience, cost of transportation and accessibility to health services for persons who live outside metropolitan areas by providing an option that is easier to navigate than the 200 Hawkins Dr. facility and will make the 200 Hawkins Dr. facility less congested,” according to the application, referring to its multi-towered main campus next to Kinnick Stadium in Iowa City.
After the five-member State Health Facilities Council on Feb. 17 denied UIHC’s first application for the project — with a slim 2-3 vote following seven hours of testimony — the group issued a written explanation of its decision, noting UIHC failed to meet its four-pronged legal standard for certification.
“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.
UIHC in its new application addresses those concerns point by point, including accusations it’s failed to collaborate.
UIHC CEO Suresh Gunasekaran — who signed the application — reported UIHC since last year’s denial has been in communication with Mercy Iowa City about several partnership options.
The two Iowa City health care providers, for example, explored creating a “behavioral health center of excellence” in October — although the UIHC application reports, “Mercy Iowa City declined to continue with those discussions.”
Mercy Iowa City in March then wrote to UIHC proposing broader collaboration and a willingness to “make its excess capacity available in the form of 50 in-patient beds, multiple surgical suites, expanded emergency services of about 45 percent, or 15,000 visits a year.”
Mercy Iowa City President and CEO Sean Williams and Board Chairman Thomas R. McLaughlin, who signed that letter, also explained their opposition to UIHC’s North Liberty proposal.
“Proposing a new $230 million dollar hospital during a pandemic while accepting federal funding is incongruent with the current economic environment,” according to their March 11 letter. “If UIHC rejects this offer and brings forth a slightly revised application, Mercy Iowa City will be compelled to oppose these efforts again.”
Gunasekaran, in response, said UIHC wants to explore collaboration and had wanted to pursue the behavioral health partnership.
“While we were disappointed at your termination of our behavioral health nondisclosure agreement during the middle of the Certificate of Need hearing and Mercy One’s lack of substantive response to our behavioral health proposal, we are as interested as ever to explore that potential proposal, this recent proposal, and any other ways we could collaborate,” Gunasekaran wrote.
To proceed with “serious collaboration discussions,” however, Gunasekaran said UIHC needs more information and assurances “Mercy is willing to seriously entertain a model that would allow for” four key UIHC priorities:
- Consistent care standards, financial assistance policies, and patient access rights
- Integrated clinical leadership
- Preservation and expansion of the UIHC teaching and research missions
- And “meaningful access to upgraded inpatient and operating rooms equipped with cutting-edge technology that the state of Iowa relies on UIHC to provide.”
“As you are aware due to the 30-35 patient transfers we accept from your institution every month and data presented at the hearing, Iowans’ need for complex care from UI Health Care is significant and growing,” Gunasekaran said.
“While your proposal by itself would not be enough to address the complex care access issues Iowans face, it is an important component.”
He included a list of questions to “facilitate collaboration,” including:
- “What governance and oversight would Mercy envision UIHC having? It is very important to UIHC that in any collaboration, UIHC be able to have clinical oversight, medical direction, and programmatic control and the ability to implement UIHC clinical protocols.”
- “What existing UIHC services does Mercy realistically see being able to be located on Mercy’s campus? Given Mercy’s previous expressed disinterest in pursuing anything in the behavioral health arena, are behavioral health services completely off the table?”
- “Given recent layoffs, does Mercy envision undertaking the recruitment effort necessary to restaff these beds, or is that something Mercy would like UIHC to handle?”
- “Given UIHC’s emphasis on patient continuity of care, is Mercy willing to consider moving to UIHC’s electronic medical record and imaging systems?”
- “Given that a large medical office buiding was also planned for North Liberty to continue UIHc’s culture of offering integrated ambulatory an inpatient care, what space is Mercy willing to offer that could serve this function?”
UIHC, in its application, reported Mercy canceled scheduled meetings “shortly after receiving UIHC’s response.”
While Gunasekaran noted numerous provider collaborations across the state and the Corridor, he argued suggestions UIHC create a mechanism for transferring certain types of patients to other providers or refuse to treat certain patients would “not be cost effective, efficient, practicable or feasible” to address its current demand for “tertiary” care.
In fiscal 2019, UIHC accepted 1,086 in-patient transfers from Mercy Iowa City, Mercy Medical Center in Cedar Rapids and UnityPoint Health-St. Luke’s Hospital, also in Cedar Rapids, representing 10,289 patient days, according to the UIHC application.
It reportedly rejects 2,200 to 2,400 requested transfers annually. And since the council’s February rejection of its application, UIHC reportedly has declined more than 600 transfer requests.
In the application, officials argue increasing the university’s capacity to serve the state’s sickest patients would “bring back some of the more than 6,800 Iowans who leave” to get their care elsewhere.
“UIHC is applying for this project to meet this need for tertiary care, not for capacity to treat patients that can be appropriately treated at another hospital with existing capacity,” according to its application.
Plus, according to UIHC, “Patients have a right to choose their health care provider and UIHC cannot transfer a patient medically appropriate for transfer without the patient’s consent.”
As part of its re-upped proposal, UIHC is committing to “maximize every last square foot of space that will pass the Joint Commission in-patient standards within its existing walls to make space for 65-80 beds and more clinic space.”
The university spelled out a bed-conversation and expansion plan for the main campus that adds dozens of inpatient beds in the coming years — but reported, “None of these expansion and modernization efforts will meaningfully transition UIHC from double to single rooms, as has become the national standard.”
“UIHC still plans to operate approximately 65 percent of its bed capacity in double rooms, which presents both patient satisfaction and infection control risks that will need to be addressed down the line.”
In the application, UIHC airs previous talks to build a new bed tower on its main campus.
“However, because no undeveloped space exists at UIHC, any development might disrupt and limit access to existing capacity during construction,” according to the application, reporting predicted costs to “vertically expand” on the main campus would reach $1,050 per square foot, compared to the projected $545 in North Liberty.
July 15 meeting
Despite some detail changes, the proposed project’s total cost remains at $230 million.
It’s expected to need an additional 454 full-time employees. And while the hospital does expect revenue to rise in conjunction with operating costs, UIHC isn’t projecting a percentage increase in patient revenue after opening its North Liberty facility.
The state last week sent letters to entities, organizations and providers potentially affected by the new UIHC application, giving them until June 16 to provide the state with a letter or support or opposition, according to Rebecca Swift with the state’s Certificate of Need Program.
No letters had been received as of Tuesday. In response to the first application, the state received 27 letters of support and 53 letters of opposition. Gunasekaran told The Gazette he expects more written support this time around.
After a written question-and-answer period between the state and UIHC, the council will consider the new project proposal during a public meeting. That was supposed to happen in July, but the sudden resignation of council member Carol Earnhardt this week prompted the council to defer the issue until a later meeting -- possibly in August or September.
Should the council deny the application again, Gunasekaran said, “In the short term, it would be a loss.”
“Because we're talking about thousands of transfers from other Iowa hospitals in every single year,” he said. “And so if we don't have a path for expanding capacity, then I hear that a lot of those Iowans will have to go out of state for the care.”
Vanessa Miller covers higher education for The Gazette.
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