This story is a part of the CBJ’s Newsmakers edition. This year-end wrap-up from the staff of the Corridor Business Journal is a compilation of the year’s most noteworthy articles and projects, as told through stories that appeared in the bi-weekly issues of the CBJ.
This story was originally published in May 2023.
Plans for Steindler Orthopedic Clinic’s new ambulatory surgery center and clinic facility in North Liberty are continuing to move ahead, with construction now expected to begin in June.
Steindler officials are also pursuing several medical options outside Johnson County, including the possibility of opening a new Cedar Rapids orthopedic clinic and performing surgical procedures at Cedar Rapids’ two primary hospitals.
Steindler president and CEO Patrick Magallanes said that while the overall size of the ASC and clinic facility has been slightly reduced, it will far exceed the capacity of the current Steindler building in Iowa City.
The new Steindler facilities will be built on a 36-acre land parcel at the intersection of Kansas Avenue and Forevergreen Road, just east of the Forevergreen-Interstate 380 interchange. The overall square footage of the ASC and clinic has been dropped from just over 103,000 square feet to just under 83,000 square feet.
Mr. Magallenes explained that the plan submitted in the original Certificate of Need application, approved by the State’s Health Facilities Council in March 2022, was designed with space for future expansion. The new plan doesn’t include that extra space, but it will meet Steindler’s current needs and will still include an ambulatory surgery center with six operating rooms.
“We’ve just decided to scale down both the ASC and the clinic to not construct today for future expansion,” he said. “If we want to expand in the future, we’ll just take it as a (fresh) project. We have plenty of land out there to do other things. But it’s still a roughly 80,000-square-foot project. To put that in perspective, our building right now is 33,000 square feet.”
The clinic’s exam rooms will incorporate an “on-stage, off-stage,” design, wherein the patient will enter an exam room from a door on one side of the room, and the physician will enter from a central pod on the other side.
“It’s going to allow for a lot more security and PHI (Protected Health Information) privacy within the pods,” Mr. Magallanes said. “It’s going to be a very different experience from what our patients are familiar with at Steindler today.”
The project’s construction firm has created a full-scale cardboard rendering of the new exam room concept. “It’s actually really cool,” Mr. Magallanes said. “It’s the first time we’ve seen something like this.”
The current Steindler development, including a detention pond for runoff control, will cover about 10 acres. Again, for comparison purposes, Mercy Iowa City’s current hospital facility sits on about five acres, Mr. Magallanes said.
Construction on the new clinic was slightly delayed by a few factors, Mr. Magallanes said. Clinic officials appeared before the State Health Facilities Council in February to request an increase in the project’s budget estimate from $19.2 million to $29.3 million due to factors such as rising inflation, supply chain issues and labor costs.
The request was approved, along with a request to extend the projected completion date. Mr. Magallanes said the clinic is now projected to be completed by late 2024 or early 2025.
Mr. Magallanes, however, said he expects the project could be finished for much less than $29.3 million, which is set as a “guaranteed maximum price” because the project is being built under “construction manager at risk” guidelines.
“Just because we got approval for that cost increase, that doesn’t mean (we) want to make the project cost 35% more,” he said. “We want to get it done as thoughtfully, efficiently and economically as possible, but still provide an outstanding patient experience.”
Some site work for the project has already been done. Contractors have gathered boring samples on the site to test soil compaction and determine the best location for construction. “We did have to do a little more preliminary work than we anticipated because of the quality of the soil out there,” Mr. Magallanes said.
As construction gets underway, Mr. Magallanes said Steindler continues to pursue “partners” to further develop the 36-acre property as a medical campus, with facilities owned and operated by private practice physicians. Negotiations have been conducted with private entities for an inpatient hospital, a multi-specialty ambulatory surgery center, a heart catherization lab, a stand-alone emergency room facility, and a medical office building.
No agreements have yet been finalized, but the private facilities would provide services that Steindler doesn’t offer, such as an inpatient facility for complex procedures like joint revisions and spinal surgeries, plus an ASC for non-orthopedic procedures.
“We have said that we would sell land to somebody that wants to do a multi-specialty ASC out there, as long as it excludes orthopedics,” Mr. Magallanes said.
Private practice facilities in the Steindler development would offer a competitive, viable alternative to the University of Iowa Hospitals & Clinics, which is in the midst of building a new $500 million-plus hospital in North Liberty, Mr. Magallanes said.
Steindler announced in April 2022 that it had closed on the $11 million sale of its current clinic at 2751 Northgate Drive in Iowa City. That building has housed Steindler Orthopedic Clinic since it was constructed 22 years ago.
Newsmakers update
Project eyes 2025 completion
The bankruptcy of Mercy Iowa City Hospital won’t directly affect Steindler Orthopedic Clinic’s new ambulatory surgery center and clinic in North Liberty.
“It doesn’t really affect our plans,” said Steindler president and CEO Patrick Magallanes. “The one unknown is what’s the opportunity for other health care providers to join us. We’ll have to see what the new ownership (of Mercy) wants to do.”
Contractors began work in June on Steindler’s new ambulatory surgery center and clinic at Kansas Avenue and Forevergreen Road just east of the Forevergreen-Interstate 380 interchange. Mercy Iowa City, where Steindler physicians performed procedures, filed for bankruptcy protection in August. In early November, UIHC’s purchase of Mercy was approved by bankruptcy court. Steindler’s 36-acre site includes space for potential partners to build their own satellite facilities.
“The new location allows for some growth to meet the needs of the marketplace,” Mr. Magallanes said.
Steindler’s new 83,000-square-foot facility will include an ambulatory surgery center with six operating rooms built around an “on-stage, off-stage” floor plan. Patients will enter an exam room from one side of the room, with their physician entering from a central work area on the other side.
“We wanted a clinic design that’s going to be more patient-centric,” Mr. Magallanes said. “It’s going to be a really efficient patient process.”
The project, which carries a $29.3 million maximum price tag, is set for completion by early 2025. It will replace Steindler’s Iowa City building, which it sold in 2022 for $11 million.
“We’ve been in the building for 23 years, and we’ve outgrown it,” Mr. Magallanes said.
Steindler has added six staff physicians over the past four years, for a total of 18, and plans to add two more in 2024, Mr. Magallanes said.
— Steve Gravelle
