University of Iowa hospitals will reapply to build in North Liberty

IOWA CITY — Two months after the State Health Facilities Council sided with opponents in narrowly denying University of Iowa Health Care a certificate to build a $230 million “general acute hospital” off Interstate 380 in North Liberty, UIHC has notified the state it plans to try again.

The updated endeavor, according to a state list of intended projects, is characterized as a “48-bed acute care hospital in North Liberty” — 12 beds more than the 36-bed “general acute hospital” that UIHC pitched last time.

In an April 16 “notification of intent to apply for certificate of need” letter, UIHC executives describe the project differently than they did in their first letter Nov. 16.

Although the project cost remains the same, UIHC in the latest letter dropped the “general acute hospital” label and instead described the proposed facility as an expansion of its existing complex care services, health sciences education and clinical research. And rather than requesting approval only for a “UIHC North Liberty Campus,” as UIHC officials did in November, they now are listing two locations for the expansion — the main UIHC campus in Iowa City and 701 W. Forevergreen Road in North Liberty.

“This project will include the following clinical and academic mission driven areas: acute inpatient beds, surgical suites, outpatient clinics, emergency services, and ancillary and support services,” the April 16 notice said.

Despite some proposal changes, UIHC’s November notice similarly reported a North Liberty campus would include “emergency services, urgent care services, acute inpatient beds, surgical suites, and appropriate ancillary diagnostic and support services.”

UIHC officials want the revised application considered at the State Health Facilities Council’s scheduled for July 14-15, according to a program manager. The next meeting after that isn’t until late October. The deadline for submitting materials for July consideration is May 20.

“We anticipate submitting an application on or before May 20,” according to UIHC’s April intent letter.

The university’s first application required UIHC to pay the maximum filing fee of $21,000. Reapplying will cost UIHC another maximum fee — bringing the total filing cost for both applications to $42,000.

In both the November and April intent letters, UIHC officials stressed no state funds or taxpayer dollars would go toward the project, which instead would be funded through revenue bonds, UIHC clinic revenue and donations.

In the UIHC project application submitted in December — the one eventually denied — the hospital showed $30 million “cash on hand” with the remaining $200 million coming from borrowing in the form of revenue bonds.

That initial proposal drew questions from the state council, sparked backlash and vocal opposition from community health care providers and eventually resulted in a narrow "no“ vote after hours of testimony at a February hearing.

Concerns — largely from local providers including Mercy Iowa City — accused UIHC of veering out of its academic-medical-center lane into community health care territory, with suggestions that clinics and health care providers could close should UIHC be permitted to move ahead.

Some opponents accused UIHC of “highly inappropriate” and “predatory” tactics in pitching another emergency room in Johnson County and more surgical space, including for orthopedics.

UIHC, however, argued its beds are full, it surgeons are cramped and an increasing number of patients are being transferred from community hospitals that are ill-equipped to treat the state’s most complex cases.

“I think there's been a fundamental misunderstanding based on the simple geography of us not continuing to crowd our campus next to Kinnick,” UIHC Chief Executive Officer Suresh Gunasekaran told the state council in February. “That choice is unsettling. But let me tell you, what is being moved to North Liberty is no different than what is happening next to Kinnick. It's better for Iowans, it's better for patients, and it's better for the community if we decompress our main campus and offer this same level of care in North Liberty.”

In explaining the decision to deny UIHC a certificate, council members in March cited the university’s steep cost, lack of community collaboration, insufficient planning, inefficiencies and potential harm to other providers. The $230 million endeavor slated to add 36 beds amounted to $6 million per bed, “making this one of the most expensive proposed projects in council history,” according to the State Health Facilities Council’s written rejection.

UI Vice President for Medical Affairs Brooks Jackson has told the Board of Regents this process of rejection and re-submission is not unusual and he expects the project eventually will materialize. According to the initial proposal, UIHC aims to erect a four-story, 216,180-square-foot hospital on 60 acres at the southwest corner of Forevergreen Road and Highway 965 in North Liberty by 2024. The university bought that land in chunks, first paying $11.7 million in 2010 and then $2.2 million in 2019.

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