For more than a decade, a large sign declaring “University of Iowa Health Care Coming Soon” has sat in an open field on the corner of Highway 965 and Forevergreen Road near the border of North Liberty and Coralville.
Almost every surrounding field along the highway just off of Interstate 380 added new developments in the decade since UIHC acquired the land and planted the sign. A new Hy-Vee across the street to the east debuted in 2018 and 965 Flats apartments to the south recently welcomed its first tenants.
But the hospital sign remains in a vacant field.
In an interview with the Press-Citizen, UIHC CEO Suresh Gunasekaran said the sign has become somewhat of “a local joke” because of how long it has stayed up without a finalized plan gaining approval.
On Tuesday, Gunasekaran hopes the laughter will stop. That is when he will once again pitch a new hospital to replace that forlorn sign, featuring 48 beds at a cost of $230 million. His plan was rejected by the State Health Facilities Council six months ago over concerns about its price tag and after other local hospitals questioned the need for it.
Gunasekaran believes a new presentation will address those concerns, making it clear that UIHC is trying to expand services for the most complex patients, not duplicate the work of its peers.
“We’ve had various different ideas for what to do with this land, but only when we really thought through this recent iteration did we really identify a solid purpose for it,” he said. “This is something we’ve put a lot of thought and planning into.”
At the last hearing for the UIHC project in February, which lasted nearly seven hours, Gunasekaran found his project faced steep opposition and hours of scrutiny from the governor-appointed State Health Facilities Council. At the conclusion of that ordeal, the council voted 3-2 to deny UIHC’s certificate of need application.
Why is UIHC trying to build a $230 million facility?
UIHC and Gunasekaran are making a second appeal to the State Health Facilities Council, with a presentation that will lay out that the project’s purpose is to:
- Expand capabilities to provide long-term, or “tertiary,” specialized care to patients’
- Add to its education and research programs;
- And grow UIHC’s biomedical research programs.
The 300,000-square-foot facility includes 48 beds. While part of the building carries the in-patient units, surgery services, emergency department, labs, pharmacy and space for research and education, another wing would include space for clinics, faculty offices and research.
But why build this in Johnson County, when UIHC’s campus sits about six miles away?
Gunasekaran said North Liberty provides a more convenient location for patients of UIHC and is close enough to the main campus for its doctors and clinicians to staff the building, since they already live in the area. He argued that since this facility is meant to be an extension of UIHC’s services, having it nearby is advantageous.
Gunasekaran said the North Liberty location would help UIHC accept thousands of patients who attempt to transfer from other Iowa hospitals that they have had to turn away in previous years. He noted that UIHC gets patients from all over Iowa due to the type of specialized care only it can provide.
When the proposed facility was rejected in February by the council, UIHC’s proposal didn’t look much different, but the argument for it did.
Then, Gunasekaran pitched the new campus as a means of “decanting” some of the pressure on the hospital system’s existing beds, eliminating the limitations to expand at the main campus, which sits under the “shadow of Kinnick.”
Iowa code grants the council the authority to issue a certificate only if the following four factors exist:
- “Less costly, more efficient” alternatives to the service are not available.
- Existing facilities providing institutional health services similar to those proposed are being used appropriately.
- Modernization or sharing arrangements have been considered and have been implemented.
- Patients will experience serious problems in obtaining care.
Besides taking issue with the cost of the project presented in February, the five-member council found that existing hospitals and ambulatory surgery centers in the Iowa City area were already providing health services similar to what UIHC was proposing. The council also argued that services provided at the new hospital would be offered to patients needing more standard care who could be seen in a community-based facility, rather than to patients requiring specialized care.
The council also found that other hospital and ambulatory services in Johnson County were operating at low capacity and the burden that UIHC said they were under could be filled by collaborating, not competing.
Gunasekaran admitted that UIHC did not do a good enough job in its February presentation stressing why the new facility is needed and what makes the care it will provide unique from other services in the county. He said the council’s feedback was taken into consideration and will be reflected in a more focused presentation Tuesday.
“They pretty clearly stated that they didn’t feel as though we clearly explained why this new facility was needed. That was just the heart of the question,” he said.
Gunasekaran said the new proposal makes it clear that the new North Liberty location will be an extension of UIHC’s current operations at 200 Hawkins Drive in Iowa City even though they won’t be physically next to each other.
He said the new facility will be covered under UIHC’s existing hospital license; will only employ university faculty, residents, medical students and nursing students; and will be governed by the same clinical programs to handle complex patients. He said it would not be designed to extend care to those who would normally go to community hospitals in the area.
“This can be an opportunity for us to expand workforce. If we’re able to offer another site, it benefits all Iowa hospitals because now there are more locations for more students to train,” Gunasekaran said, adding that recruitment would come primarily from an out-of-state workforce and recently graduated professionals.
Gunasekaran said the size, scope and cost of the project remains the same, besides additional shell space set aside for future expansion. UIHC will argue that the project is the least costly, most timely and most practical way to accomplish its goal of addressing Iowa’s needs for specialized health care.
In February, the State Health Facilities Council called the new hospital plan “one of the most expensive proposed projects in council history.” That was when the cost of the project was estimated at $230 million for a 36-bed facility, or more than $6 million per bed. Now with 48 beds, the project costs just under $4.8 million per bed. UIHC argues that is consistent with other projects in the United States in terms of the cost per square foot.
Area hospitals and leaders divided on support for project
The UIHC proposal has received 68 letters of support and 84 in opposition as of Friday. Among those opposing are local physicians, clinics and hospital systems — many associated with MercyOne facilities or their affiliates in Iowa City and Cedar Rapids. UnityPoint Health based in West Des Moines and Wellmark Blue Cross Blue Shield are also against the new hospital.
A common complaint by opponents is that the new hospital would put UIHC in direct competition with other community providers that focus on primary and secondary care.
MercyOne CEO Robert Ritz argued in his letter of opposition that, while the new proposal uses different wording to emphasize tertiary care, there was a tight turnaround between the March 17 denial given to the last proposal and the new letter of intent for the project submitted afterward.
“It does not seem possible that UIHC could have meaningfully considered and attempted to address the myriad issues raised in the Council’s March 17 decision,” he said.
Ritz questioned whether building a facility so close to UIHC’s main campus would be a good decision and went on to criticize UIHC for trying to expand beyond tertiary care and compete with private health-care providers across the state.
Iowa City Ambulatory Surgery Center Executive Director Kelly Durian also wrote in opposition, arguing that, even with the change of tone and optics for the proposed facility in comparison to the presentation in February, UIHC still fails to make a compelling case for construction of the new hospital.
“UIHC seems to now believe that if it simply does not mention the provision of these services that are already provided at much lower cost, with equal or higher quality outcomes, and significantly higher patient satisfaction by community providers with substantial existing excess capacity, the proposed hospital somehow will not negatively impact those providers nor reduce patient choice,” she wrote.
Durian said, while she doesn’t doubt UIHC struggles with transfer requests from other community hospitals, she doesn’t believe adding a new facility solves that issue without hurting the other community hospitals and adding to UIHC’s “$2.5 billion and growing balance sheet.”
Gunasekaran said he thinks many of the concerns addressed about the proposal came from a lack of clarity in the UIHC application. He said there was a misconception that UIHC was going to open a community hospital in North Liberty.
“This is going to be a university hospital, very much in an academic model focused on the complex patients that we always see,” he said.
Gunasekaran said he hopes to show in the presentation that the services provided at UIHC are not the same offered at community hospitals, and actually depend on those facilities to do what they are doing.
“Just because we were moving off campus, I think that was the red flag for everyone who thought we were trying to do something different,” he said. “The thing that we’re doing different is we’re moving off-campus, not changing our services.”
Among those supporting the proposed facility are North Liberty Mayor Terry Donahue and Coralville Mayor John Lundell; Nick Westergaard with the Iowa City Area Business Partnership; Chuck Long, former Hawkeye and NFL football player; Mary Ferentz, wife of Hawkeye football coach Kirk Ferentz; multiple state legislators; hospitals and clinics around Iowa; and former and current patients of UIHC.
Donahue, in his letter, said the new facility will help address a shortage of physicians in Iowa and reduce heavy medical burdens in both urban and rural areas of the state.
“By building out, the hospital will be able to not only sustain their services but increase more immediate treatment needs from the public,” he said, adding that delaying services is occurring at an unacceptable rate.
State Sen. Kevin Kinney, a Democrat from Oxford, said Iowa is facing unmet demand in access to highly specialized, coordinated care that is only expected to increase. He said he has received complaints from constituents frustrated there are not beds available for specialized care.