Mercy Iowa City will transition to the University of Iowa Health Care on Jan. 31, according to an Iowa Board of Regents meeting on Wednesday morning.

Mercy and UIHC will still operate as separate hospitals, each maintaining different sets of staff.

Joseph Clamon, UIHC associate vice president for legal affairs, said Wednesday that staff at UIHC will need to have a faculty appointment with the Carver College of Medicine, while Mercy will not require a faculty appointment.

Denise Jamieson, vice president for medical affairs and the dean of the Carver College of Medicine, said Wednesday that the hospitals will operate separately, where staff are not required to have faculty appointments.

“Whether you are employed by UIHC or a physician-independent position in the community, you will have the opportunity to be on the medical staff and practice medicine at UIHC,” Jamieson said.

Clamon said the Clinical Systems committee, appointed by the regents, is and will continue to be responsible for all clinical operations at both locations.

Each separate medical staff will have its own set of medical staff bylaws, Clamon said.

“The proposed bylaws contain only those changes necessary to align the two medical staffs so that they can share information and have some in common processes,” Clamon said.

The proposed bylaws will maintain the four existing departments, including maternal and child health, family medicine, emergency medicine, and surgery.

“The goal here is to minimize disruption to the medical staff so that we minimize disruption day one patient care,” Clamon said.

Though the medical staff will operate separately with their own set of bylaws, Clamon said UI Health Care intends to work in the future with medical staff from both hospitals to align the bylaws, as they are very similar.

“The action requested is so the hospital license currently known as medical Mercy Hospital can continue to successfully operate going into the future,” Clamon said.

The proposed bylaws were unanimously approved on Wednesday by the Iowa Board of Regents, barring the absence of regent JC Risewick.

The start date will be accompanied by a celebration, which Jamieson said would involve things such as food and swag.

UIHC to take over Mercy IC 

The Jan. 31 full take-over comes after a months-long process from the UI to acquire the hospital. It started last summer when Mercy was involved in a court proceeding in which some of its creditors and investors asked the courts to place the hospital in a receivership.

The plaintiffs wrote that Mercy was going through a period of negative cash flow, with Mercy’s liquidity having gone down to $42 million at the time of the receivership request. 

The hospital filed a motion to dismiss the request, doing so a second time in August, before then filing for bankruptcy on Aug. 7. The same day, the UI announced its intention to buy the hospital, with both parties signing a letter of intent.

Both sides then filed an agreement with the U.S. Bankruptcy Court in the Northern District of Iowa with the intention of completing the deal by November. If approved, the UI would receive all of Mercy’s assets: real estate, equipment and supplies, employees, and active business operations.

In September, the UI submitted its “stalking horse bid” which set the floor price of bids, and would be the de facto winning bid if no others were made by Oct. 2. But on the day of the deadline, a second bid was submitted, taking the hospital’s acquisition to auction.

At the auction, the UI’s competitor was revealed to be Preston Hollow Community Capital, one of Mercy’s bondholders involved in the initial receivership request, and was named the auction’s winner on Oct. 10.

But that result would be changed on Oct. 27 when it was announced that the UI had been selected as the auction winner. 

Court filings detail a disagreement between Preston Hollow and Mercy after Preston Hollow said it would not take on the hospital’s debt.

With the auction settled, the UI and Mercy would have to wait until Nov. 6 to learn if a bankruptcy judge would approve the sale, which it was.

A statement shortly thereafter outlined the next steps in the acquisition process, including announcing that the two entities would officially merge in 2024.