Orthopedic group advocates for hospital sale, says delay is harming community


Iowa City, Iowa-based Steindler Orthopedics has filed a motion in court requesting that a judge force Mercy Hospital Iowa City to move forward with a $29 million asset sale following its bankruptcy announcement, alleging that Mercy's delay of the sale is harming hospital operations and scaring away patients and providers, according to an Oct. 26 report from The Gazette.

"As the manager of the ortho service line, Steindler surgeons and professionals are on-site at the hospital daily," Steindler's statement reads. "Accordingly, Steindler is acutely aware of the negative impact that the delay in bringing the sale process to a timely conclusion has had on the ongoing hospital operations. Steindler is also experiencing a negative impact because Steindler patients have canceled or postponed surgeries scheduled at Mercy." 

Mercy Hospital's purchaser, Preston Hollow, has asked the U.S. Bankruptcy Court to compel Mercy to comply with the auction results, reporting an impasse. Preston Hollow has also accused Mercy of trying to use resources from its nonprofit foundation to cover attorney fees instead of its operational losses.

Steindler Orthopedics has noted five areas being harmed as a result of the sale delay: 

1. Mercy is struggling to retain staff and providers. "Several health care professionals, including physicians, nurses, and (operating room) staff, are choosing to leave Mercy and pursue more stable employment opportunities due to the perceived uncertainty as to the future of the sole community hospital in Iowa City," the court document reads. 

2. Uncertainty around the hospital's sale and provider departures is disrupting patient care. 

3. The longer the sale takes, the more confidence wanes among existing staff. 

4. The delay in selling is causing a delay in transferring the practice to new management. 

5. The impasse is costing money. 

Steindler's president and CEO, Patrick Magallanes, told The Gazette that 18 cancellations, referrals elsewhere and postponements have occurred pending the sale outcome. 

"There have been a number of resignations over the past 30 days, and excellent, caring folks are leaving. This is alarming to our team and should be to those hoping to see a new nonprofit hospital open," Mr. Magallanes told The Gazette.

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