Mercy Iowa City Hospital in recent months had to retain a “strategic and operational performance improvement” consultant after breaching debt coverage obligations, according to a disclosure the Municipal Securities Rulemaking Board posted Tuesday.
The 194-bed Iowa City hospital — one of 23 affiliated with the MercyOne network — retained Insight Health Partners to meet a “consultant requirement” because “income available for debt services of the obligated group is less than 110 percent of the maximum annual debt service requirement.”
Mercy Iowa City officials told The Gazette on Wednesday the hospital engaged Insight Health over the summer “to help Mercy Iowa City complete an assessment of financial and strategic operations, and their work was completed months ago.”
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Officials didn’t disclose details about what the consultant found or changes the assessment compelled for Mercy Iowa City and its subsidiaries — which includes Mercy Services Iowa City, Mercy Outreach Iowa City, and the Mercy Hospital Foundation.
But the hospital portion of Mercy’s business enterprise ended December with a quarterly operating loss of $5.5 million, which — when combined with non-operating losses and deficiencies — totaled $8.2 million, according to new financial documents published by the rulemaking board last week.
That loss dropped Mercy’s net assets from $42.7 million at the start of the quarter to $34.5 million by Dec. 31. When compared to a year earlier, Mercy’s net assets are down $60.3 million or 64 percent from $94.9 million in December 2021.
Including Mercy Iowa City’s subsidiaries, net assets have fallen from $8.2 million in December 2021 to $71.5 million in the red.
Although cash and cash equivalents for the Mercy hospital portion fell from $22.1 million in the 2021 budget year to $5.8 million at the end of the 2022 budget year in June, its cash on hand has ticked up since that time to $5.9 million.
But the hospital’s total assets are down to $179.1 million from $209.9 million in June thanks, in part, to big investment losses — with that line item tumbling from $22.1 million in June to $7.2 million in December.
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Regarding its operations, Mercy in December reported an uptick in admissions for the three months prior — compared with the same period in 2021. But its “patient days” are down, its average length of stay is down, and its surgeries have decreased from 1,858 over the last three months of 2021 to 1,742 in the final quarter of 2022, according to documents filed with the rulemaking board.
Mercy’s occupancy percentage has dropped from 31 percent in 2021, to 27 percent for the period that ended in December.
Meanwhile, two miles west, the sprawling University of Iowa Hospitals and Clinics campus is overrun with patients, averaging 96 percent occupancy of its 620-plus staffed adult inpatient beds in the 2022 calendar year.
That occupancy rate has stayed mostly static over the last five years — although UIHC’s staffed-bed average has increased from 586 in 2018 to 627 in 2022.
The increasing acuity — or severity — of patients occupying those beds has upped the average length of stay, aggravating congestion in the UIHC emergency room — where patients needing admission can wait many hours, if not longer.
UIHC interim CEO Kim Hunter in February told the Board of Regents the number of people waiting in the emergency room can reach 70, with up to 30 at a time waiting for an inpatient bed — essentially boarding there.
“That means they've seen a physician, they’ve received some treatment to stabilize them, and then a decision has been made to admit them to a hospital inpatient bed,” Hunter said. “And when that bed is not immediately available, they wait in the emergency department and receive care from physicians and nurses during that time.”
The number of hours patients spent boarding in the UIHC emergency department jumped 40 percent over five years from around 100,000 to about 140,000 in 2022.
“That is really linked to our capacity constraints of not having beds available that are empty,” Hunter said.
UIHC has cited those constraints in announcing more than $1 billion in construction planned for the coming years, including a new inpatient tower on the main campus; an expanded emergency room; and a new $525.6 million hospital campus in North Liberty, which will include an emergency room.
A range of community health care providers — including Mercy Iowa City — fought UIHC’s application to build just east of Interstate 80 in North Liberty, citing harm it could do to their business.
“When a state funded academic and medical institution crosses the line into providing the same primary and secondary care services which are provided by community hospitals, it threatens the continued existence of other providers; it reduces patient choice and access to care; and it creates an atmosphere or an environment of distrust among possible collaborators,” Sister Helen Marie Burns, a Mercy Iowa City board member, told the State Health Facilities Council in August 2021 during a hearing to consider UIHC’s proposal to build in North Liberty.
After UIHC received the state permission and Mercy Iowa City embarked on finding a new managing partner or owner — in its quest to cut ties with MercyOne — UIHC offered a $605 million sum to take ownership of the community hospital and make it the “centerpiece” of a new UIHC “community division.”
https://www.thegazette.com/higher-e...-retained-performance-improvement-consultant/
That deal never materialized, according to reporting and documents obtained by The Gazette.
The 194-bed Iowa City hospital — one of 23 affiliated with the MercyOne network — retained Insight Health Partners to meet a “consultant requirement” because “income available for debt services of the obligated group is less than 110 percent of the maximum annual debt service requirement.”
Mercy Iowa City officials told The Gazette on Wednesday the hospital engaged Insight Health over the summer “to help Mercy Iowa City complete an assessment of financial and strategic operations, and their work was completed months ago.”
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Officials didn’t disclose details about what the consultant found or changes the assessment compelled for Mercy Iowa City and its subsidiaries — which includes Mercy Services Iowa City, Mercy Outreach Iowa City, and the Mercy Hospital Foundation.
But the hospital portion of Mercy’s business enterprise ended December with a quarterly operating loss of $5.5 million, which — when combined with non-operating losses and deficiencies — totaled $8.2 million, according to new financial documents published by the rulemaking board last week.
That loss dropped Mercy’s net assets from $42.7 million at the start of the quarter to $34.5 million by Dec. 31. When compared to a year earlier, Mercy’s net assets are down $60.3 million or 64 percent from $94.9 million in December 2021.
Including Mercy Iowa City’s subsidiaries, net assets have fallen from $8.2 million in December 2021 to $71.5 million in the red.
Although cash and cash equivalents for the Mercy hospital portion fell from $22.1 million in the 2021 budget year to $5.8 million at the end of the 2022 budget year in June, its cash on hand has ticked up since that time to $5.9 million.
But the hospital’s total assets are down to $179.1 million from $209.9 million in June thanks, in part, to big investment losses — with that line item tumbling from $22.1 million in June to $7.2 million in December.
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Regarding its operations, Mercy in December reported an uptick in admissions for the three months prior — compared with the same period in 2021. But its “patient days” are down, its average length of stay is down, and its surgeries have decreased from 1,858 over the last three months of 2021 to 1,742 in the final quarter of 2022, according to documents filed with the rulemaking board.
Mercy’s occupancy percentage has dropped from 31 percent in 2021, to 27 percent for the period that ended in December.
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Meanwhile, two miles west, the sprawling University of Iowa Hospitals and Clinics campus is overrun with patients, averaging 96 percent occupancy of its 620-plus staffed adult inpatient beds in the 2022 calendar year.
That occupancy rate has stayed mostly static over the last five years — although UIHC’s staffed-bed average has increased from 586 in 2018 to 627 in 2022.
The increasing acuity — or severity — of patients occupying those beds has upped the average length of stay, aggravating congestion in the UIHC emergency room — where patients needing admission can wait many hours, if not longer.
UIHC interim CEO Kim Hunter in February told the Board of Regents the number of people waiting in the emergency room can reach 70, with up to 30 at a time waiting for an inpatient bed — essentially boarding there.
“That means they've seen a physician, they’ve received some treatment to stabilize them, and then a decision has been made to admit them to a hospital inpatient bed,” Hunter said. “And when that bed is not immediately available, they wait in the emergency department and receive care from physicians and nurses during that time.”
The number of hours patients spent boarding in the UIHC emergency department jumped 40 percent over five years from around 100,000 to about 140,000 in 2022.
“That is really linked to our capacity constraints of not having beds available that are empty,” Hunter said.
UIHC has cited those constraints in announcing more than $1 billion in construction planned for the coming years, including a new inpatient tower on the main campus; an expanded emergency room; and a new $525.6 million hospital campus in North Liberty, which will include an emergency room.
A range of community health care providers — including Mercy Iowa City — fought UIHC’s application to build just east of Interstate 80 in North Liberty, citing harm it could do to their business.
“When a state funded academic and medical institution crosses the line into providing the same primary and secondary care services which are provided by community hospitals, it threatens the continued existence of other providers; it reduces patient choice and access to care; and it creates an atmosphere or an environment of distrust among possible collaborators,” Sister Helen Marie Burns, a Mercy Iowa City board member, told the State Health Facilities Council in August 2021 during a hearing to consider UIHC’s proposal to build in North Liberty.
After UIHC received the state permission and Mercy Iowa City embarked on finding a new managing partner or owner — in its quest to cut ties with MercyOne — UIHC offered a $605 million sum to take ownership of the community hospital and make it the “centerpiece” of a new UIHC “community division.”
https://www.thegazette.com/higher-e...-retained-performance-improvement-consultant/
That deal never materialized, according to reporting and documents obtained by The Gazette.
