State puts hold on second UIHC application for new North Liberty hospital

Updated: May. 26, 2021 at 9:02 PM CDT
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NORTH LIBERTY, Iowa (KCRG) - The University of Iowa Hospitals and Clinics announced it will submit a new application to build a hospital in North Liberty. But, the Iowa Department of Public Health said on Wednesday it will place the application on hold.

The hospital system is required to submit an application to receive a “certificate of need” to build a new 48-bed hospital. The State Health Facilities Council, which approves or denies those applications, voted down the hospital proposal in a close 2-3 vote back in February. However, a resignation has the potential to reverse the previous decision.

Carol Earnhardt resigned from the State Facilities Council on Monday. She voted against the project and her replacement will be determined by Governor Kim Reynolds. Therefore the Governor has the ability to appoint someone to decide if the project should move forward. TV9 reached out to the Governor’s Office about whom they plan to appoint, but it didn’t immediately respond.

A spokesperson for UIHC said they were not aware of the resignation or their application being placed on hold. Suresh Gunasekaran, who is the chief executive officer for UIHC, said their new application emphasizes the need to increase capacity to care for transferred patients coming from other hospitals.

“Particularly, patient populations that other hospitals around the state are trying to transfer to us,” he said. “So I think there were a lot more specifics around what patient populations were serving, where those patients are coming from, and what type of capabilities this will give us to deliver care to them.”

The application is around 300 pages long and contains many similarities to its original application that was denied.

Three different eastern Iowa hospitals originally expressed their frustrations with UIHC’s original plan, arguing the new hospital duplicated services and stood to hurt existing operations. Those hospitals included UnityPoint Health-St. Lukes, Mercy Medical Center-Cedar Rapids and Mercy Iowa City.

A spokesperson for UnityPoint Health-St. Lukes said in a statement the hospital still opposes the new hospital development in New Liberty, saying UIHC did not make significant enough revisions to its application.

A spokesperson for Mercy Medical Center-Cedar Rapids said in an email it couldn’t provide a comment on Wednesday because it is reviewing and studying the proposal.

Aaron Scheinblum, who is a spokesperson for Mercy Iowa City, said the hospital system still doesn’t support the idea to create a new hospital.

“It is highly offensive to the State Health Facilities Council, as well as to Mercy Iowa City, all health care providers in the region and Iowa taxpayers, that the University of Iowa Hospitals and Clinics (UIHC) has re-submitted their application for a more expensive hospital in Johnson County,” he said.

Scheinblum also said the hospital system believes the concerns of the State Health Facilities Council remain unanswered, including the duplication of services.

Mercy Iowa City expressed its concern to TV9 earlier in February. Sean Williams, who is the president of Mercy Iowa City, said in February there was no need for more beds in the area.

“Capacity that exists in the corridor now between Iowa City and Cedar Rapids is more than ample to meet, not only the current need but the growing need over the next several years,” he said.

35 States have laws that require hospitals to receive a certificate of need before adding some medical services. Iowa is one of those states but declined fewer than 10% of applications over the last four years.

In 2017, a Cedar Rapids ophthalmologist filed a federal lawsuit over the requirements. Dr. Lee Birchansky of Fox Eye in Cedar Rapids tried to get his certificate of need approved 5 times before the Council granted it and he was able to open his outpatient surgery center.

Joshua House, who is an attorney for the Institute for Justice worked with Dr. Birchansky on his case, said in March these laws are obstacles to competition.

“We’re not letting kind of innovation take place, we’re not letting people coming up with better more efficient ways to deliver these services because they have to get permission from the kind of the old stalwarts before they’re allowed into the market,” he said.

The State Health Facilities Council will provide notice of the new hearing date as expeditiously as possible, with a possible meeting date in August or September depending on appointment status.

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