Health

With rising demands, University of Iowa hospitals assess growth strategy

'We're full because Iowa needs us more,' chief executive says

University of Iowa Hospitals and Clinics Chief Executive Officer Suresh Gunasekaran meets Tuesday in Cedar Rapids with The Gazette’s editorial board. “As the population gets more complicated, then there’s going to be more demand for our services,” he said. “And we are the experts on what do you do with patients that are complicated.” (Liz Martin/The Gazette)
University of Iowa Hospitals and Clinics Chief Executive Officer Suresh Gunasekaran meets Tuesday in Cedar Rapids with The Gazette’s editorial board. “As the population gets more complicated, then there’s going to be more demand for our services,” he said. “And we are the experts on what do you do with patients that are complicated.” (Liz Martin/The Gazette)
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Demand for health care from the University of Iowa Hospitals and Clinics is surging, and with it a need for more space, more doctors and nurses, more and better technology and facilities and a broader virtual reach for those who can’t conveniently make the trip to Iowa City.

But achieving that growth won’t happen exclusively by adding more bricks and mortar and more regional clinics — although those things certainly are on the table, UIHC Chief Executive Officer Suresh Gunasekaran told The Gazette this week during an editorial board meeting on the anniversary of his arrival on campus.

UIHC is the state’s only academic medical center beholden to public laws and standards, despite receiving no direct legislative appropriations. It is hamstrung by low payer rates, despite receiving the most Medicare and Medicaid patients in Iowa.

So as a result, UIHC must be creative in how it maintains the satisfaction of patients and its staff while also meeting the rising demand and keeping its prestigious national ranking.

That, Gunasekaran said, could involve new and groundbreaking partnerships and collaborations — both within Iowa, regionally and even nationally.

“We are always looking for partners,” he said, pointing squarely at this state as a first and preeminent collaborator. “We would love to partner with other state agencies. … It doesn’t have to always be a public-private partnership. It could be a public-public partnership.”

Of course, private partnerships are on the table, too, according to Gunasekaran, who said, “You have to look for partners everywhere.”

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In pursuing those prospects and potential growth options, he said, UIHC is seeking not only to answer the question of what is best for UIHC’s bottom line. But, “What does Iowa need?”

“Do you need to have your own real estate, or can you work with someone else? Do you want to do just inpatient services? Do you want to do clinics?” Gunasekaran said. “We’re also looking at home health care. We’re looking at rehab. We’re looking at skilled nursing facilities.”

‘Iowa needs us more’

Like other health care providers, UIHC is feeling its way through industry changes and headwinds that include legislative uncertainties, reimbursement shortcomings and demographic shifts that are driving up patient demand, particularly in Iowa.

“We really are full. And we’re full because Iowa needs us more,” Gunasekaran said.

“As the population gets older and patients get more complex, your average hospital that used to be able to take care of patients needs more equipment, needs more staff, needs more doctors to do it. As the population gets more complicated, then there’s going to be more demand for our services,” he said. “And we are the experts on what do you do with patients that are complicated.”

The UIHC average adult midnight census has jumped 20 percent since 2014 — from 483 that year to 580 this year, according to a recent UIHC report to its governing Board of Regents. When breaking down growth by area, the hospitals have experienced a 25 percent average census bump since 2014 in general care and a 38 percent jump in the emergency department.

“What can we do to better use our space? What can we do to get more space? What can we do on campus versus off campus?” Gunasekaran asked. “We’re kind of looking at this whole thing. Because we continue to experience a lot of demand for our services.”

Take, for instance, demand for UIHC mental health services through its emergency room, pushing behavioral health units to 98 percent occupancy. The hospital last year addressed the congestion by debuting a Crisis Stabilization Unit to help adults having a psychiatric emergency without taxing emergency room resources.

That worked for a time, Gunasekaran said.

“It’s just that now, again, we’re full,” he said.

That experience serves as an example of how physical expansion and an enlarged footprint isn’t the only way UIHC needs to grow, according to Gunasekaran. The hospital system needs more statewide and regional collaboration.

Search for partners

UI Health Care earlier this month announced plans to join the HealthPartners UnityPoint health care plan — making its providers available to more Medicare patients in Iowa and Illinois.

Meanwhile, UIHC announced last year it would leave the UI Health Alliance — a partnership it established with three other health systems in 2012 — and also would dissolve an accountable care organization in light of looming state and federal cuts and uncertainty in the health care landscape.

“We are going to continue to look at public-private partnerships,” Gunasekaran said. “But only if they benefit our community and only if they benefit our mission.”

After transferring $25 million in September to, in part, pursue a private partnership for its dialysis services, UIHC officials in October sent letters to patients telling them the deal was off. Gunasekaran said the university nixed the deal in the final stages of its analysis “because we didn’t have the same vision about how we were going to operate and manage this.”

While UIHC is “constantly investigating” potential collaborations — like the one that nearly materialized for dialysis — he said, “We’re not in the middle of a deal negotiation.”

Recruiting headwinds

What the hospitals and clinics is always pursuing, according to Gunasekaran, is recruiting top faculty and staff and efforts to retain them through systemic support, a well-articulated mission, team-building and market-competitive compensation.

UIHC has work to do, he acknowledged.

“We absolutely are not market competitive for almost any job that we have at UIHC. Across the board. We’re not market competitive for the majority of our physicians. We’re not market competitive for our nurses,” he said. “And that has a lot to do with the fact that, when you look at it, we’re not market competitive for how much we get paid.”

When compared with the rest of the country, “We’re one of the lowest paid health systems, and that’s because of where we are in terms of the Iowa economy and where we are in terms of Iowa health care costs.”

Making UIHC salaries market competitive would be “mathematically very difficult,” Gunasekaran said, pointing to benefits as an equalizer and as a top priority for the university and its hospital system.

“UIHC benefits have been benchmarked as some of the best in the country,” he said. “So … yes, we do lag on direct compensation. But we don’t lag as much on total compensation.”

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Late last month — in hopes of addressing that competitive disadvantage — Gunasekaran announced a midyear adjustment producing raises for some 2,750 employees. That kind of investment, he said, can translate to better employee satisfaction and then better patient satisfaction, which recently has been below state and national averages.

“I’m pretty committed to making sure that not only do our staff value what they do at the organization but that they get a lot of support for what they do,” he said.

A new tower, someday

The university also is retooling its virtual health technology in hopes of making it easier for rural residents to receive UIHC care without traveling to Iowa City.

While physical expansion isn’t the only solution to growth, Gunasekaran it is something the university is considering, including on a tract it owns in North Liberty.

UIHC for years has boasted plans for the plot on a sign at the corner of Highway 965 and Forevergreen Road. But Gunasekaran said he and Vice President for Medical Affairs Brooks Jackson, who also is fairly new, wanted to reassess.

“We really are looking at our options,” he said. “There’s been a year of me getting to know what we want to do, and I think the next year will bring more news on what we’ve decided.”

As for growth on the main Iowa City campus, administrators are engaging in millions in renovations. And they long have held in limbo plans for another adult-care tower, adding to the rising skyline bolstered in 2017 by the opening of a 14-story, $392 million UI Stead Family Children’s Hospital.

Gunasekaran this week said he’d love to see that happen — but the hospital needs a bigger financial cushion first.

“We think that if we can continue our positive financial performance for the next three to four years, then that tower becomes feasible,” he said. “At this point, it’s not relevant. It’s not close enough.”

Comments: (319) 339-3158; vanessa.miller@thegazette.com

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