Health

Mercy Iowa City's proposed rehabilitation hospital moves forward

Officials prepare for construction following land blessing

Cleve Haralson, vice president of capital development at Kindred Healthcare, spoke at the blessing of the land ceremony for the upcoming rehab hospital in Coralville on Tuesday. (Caleb Condit/Freelance)
Cleve Haralson, vice president of capital development at Kindred Healthcare, spoke at the blessing of the land ceremony for the upcoming rehab hospital in Coralville on Tuesday. (Caleb Condit/Freelance)
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CORALVILLE — Mercy Iowa City and Kindred Healthcare are moving “full steam ahead” on their latest project to build a rehabilitation hospital in Coralville for those requiring care for conditions such as a stroke or traumatic injury.

Following a blessing-of-the-land ceremony Tuesday by Bishop Thomas Zinkula of the Diocese of Davenport at the site, just west of Mercy Coral West Health Center on Heartland Drive, crews surveyed the land to prepare for presentations to Coralville City Council in the near future.

“We’re moving full steam ahead,” said Casey Greene, Mercy Iowa City chief operating officer. “It’s been a long process — about a year or so we’ve been working with Kindred to get things aligned, so this is another step to keep it moving forward.”

Mercy Iowa City and Louisville, Ky.-based Kindred, a post-acute-care provider, plan to construct a $7.5 million 40-bed hospital that would offer in-patient rehabilitation services following acute medical care.

Acute care refers to short-term treatment as opposed to chronic, or long-term, care.

Officials plan to break ground on the project in April and expect construction to be completed the following spring.

The project was approved by the State Health Facilities Council in October for a certificate of need, a regulatory review process that requires hospitals and other health care providers to seek state approval for services or medical equipment costing more than $1.5 million.

It is intended to prevent duplication of expensive health services in communities.

But Mercy and Kindred’s project was not the only proposal approved. A second 40-bed rehabilitation hospital put forth by national post-acute-care provider Encompass Health, a project that would be located near the intersection of Coral Court and Oakdale Boulevard and costing about $27 million, also was okayed by the council.

If completed, it will be Encompass’s first hospital in Iowa. The project would be completed “approximately 18 months” after the certificate of need was granted, according to the organization’s application to the state board.

Two similar proposals for the same county presented to the state at the same meeting was unique for the State Health Facilities Council, board administrator Becky Swift said.

“It’s kind of unusual to get two applications for the same thing at the same time,” Swift said.

However, Encompass — which encouraged council members to approve both applications — was able to demonstrate a need in Johnson and surrounding counties for 80 rehabilitation beds.

Dorsey and Whitney law firm, with offices in Des Moines, provided affected party testimony in opposition to Encompass’s project on behalf of Mercy Iowa City and Kindred.

The clock to appeal the State Health Facilities Council members’ decisions will begin once the parties receive signed reports from the Council. Neither side has given indication they intend to submit an appeal.

Swift said a similar instance occurred in 2016, when two proposals for more rehabilitation patient beds were presented to the council. Iowa Methodist Medical Center in Des Moines requested an addition of 22-beds to its current Younker Rehabilitation Center.

At the same time, Mercy Health Network and Kindred got approval for the construction on a $5 million, 50-bed facility in Clive offering similar services. This was the first rehabilitation hospital project completed through a partnership between the entities.

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Bob Ritz, chief executive officer of Mercy Health Network — of which Mercy Iowa City is a part — said there is a move across the industry toward “more specialized, comprehensive” facilities offering rehabilitation services.

“First and foremost, it’s to address a need that currently exists and one that’s likely to grow,” Ritz said. “We want to create access to services that are convenient for the people that live in Johnson County, particularly for rehab patients which tend to have longer length of stays.”

l Comments: (319) 368-8536; michaela.ramm@thegazette.com

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