Regents approve $20 million UI-Mercy acquisition

The Board of Regents moved to accept University of Iowa’ s request to purchase Mercy Iowa City for $20 million Aug. 8, after Mercy filed for Chapter 11 reorganization in U.S. Bankruptcy Court in Iowa’s Northern District.

“We as the University of Iowa remain committed to our mission of care for all citizens of the state and in many ways, this particular move is part of that commitment,” said University of Iowa President Barbara Wilson.

Joseph Clamon, University of Iowa Hospitals & Clinics associate vice president for legal affairs, said Mercy Iowa City will continue to operate as usual and will maintain a commitment to stakeholders while addressing financial challenges.

Certain bid protections were proposed to honor and and protect the interests of the State of Iowa and University of Iowa, and included:

  • A motion to preserve both institutions’ commitment to charity care
  • Maintain an open medical staff at Mercy Iowa City
  • Establish an advisory board to obtain independent community member input into its operations
  • Have an operational leader oversee its operations
  • Make routine and capital investments into Mercy Iowa City consistent with both its goals and the University of Iowa goals

Mr. Clamon stated that while the timeline is ultimately set by the bankruptcy judge, Mercy and the University will be requesting an “aggressive” timeline, believing it to be in the best interest of the patients and employees at the institution. UIHC’s ideal auction date would be the end of September, with the entire matter being resolved by October or November after regulatory filings are made at the behest of Mercy IC.

The motion to accept the proposal was almost unanimous, with two regents being absent during proceedings.

“Mercy Iowa City believes this plan is the best path forward to preserve our hospital operations,” said Tom Clancy, chairman of the board and CEO of Mercy Iowa City, in an Aug. 7 news release announcing the proposed acquisition. “As we implement this plan, our dedicated Mercy Iowa City staff remain steadfast in their commitment to provide compassionate care to our community, just as we have since 1873.”

Previous story:

BREAKING: University of Iowa to acquire Mercy Iowa City hospital and clinics