Dale Ingle could feel rumbles in his house as excavators and tractors turned over black earth, laying the foundation for a new colossal structure that now peaks through the rolling hills of North Liberty.

“We have a night light when they turn on all the lights, or when the sun goes down, then it pretty well lights up that half of the house,” Ingle said.

That “night light” in his backyard is a building University of Iowa Health Care has touted as their solution to what they’ve called a strained health care system the state has been feeling for years.

With seemingly endless lines of windows, white splashes of paint, and a prominent Tigerhawk logo, the UIHC North Liberty, or the North Liberty Hospital, is poised to soften the escalating demand for orthopedics in Iowa with a price tag surpassing a half-billion dollars.

Encompassing 469,000 square feet on 60 acres of a former cornfield, the project has been under construction since 2021. Yesterday, UIHC announced the white-paneled, L-shaped hospital is expected to open on April 28.

But there have been bumps along the way.

Project managers have reportedly faced communication issues, market inflation, and physician shortages on their journey toward completion.

During the project, Senior Vice President for Finance and Operations Rod Lehnertz had oversight of UI Design and Construction, the department directly managing the project in conjunction with UIHC.  He said the amount budgeted for the project was $526.6 million and noted they are ahead of schedule and under budget by approximately $20 million.

Lehnertz said up to now, the lack of facility space and equipment has been a problem. The growing demand for health care in general, he said, has led the main hospital to turn away more than 3,000 transfer patients from other facilities on an annual basis.

“When we look ahead for this next 10 years, the thrust of our work is related to health care, and that’s out of necessity,” Lehnertz said. “To put it simply and bluntly, our [main campus] hospital is at nearly 100 percent capacity, nearly 100 percent of the time.”

Now, the North Liberty Hospital is in its final stages — and it’s right in Iowa City’s backyard.

Addressing the patient problem

Orthopedics is a medical field focusing on bone, joint, muscles, ligaments, tendons, and nerve health. UIHC is designated as having a “high-performing” orthopedics department by U.S. News and World Report in 2024, meaning it’s among the top 10 percent of orthopedic departments in the country, and the demand for orthopedic care is booming.

That demand is pushing orthopedics providers across the country to either double their caseload or increase the number of surgeons by 10 percent every year to keep up with incoming patients for orthopedic-focused surgeries, which becomes more common as people age.

In Iowa City, roughly 12 percent of the population is over the age of 65, according to the U.S. Census Bureau. Iowa is ranked 20th for the oldest population in the U.S. The increasing age of thousands of Iowans, coupled with increased demand, compelled UIHC to reconsider the location of their orthopedic clinic at the main hospital.

“We have a nationally recognized orthopedic department,” Amy O’Deen, chief administrative officer of the North Liberty Hospital said in an interview with The Daily Iowan. “[The department] currently is in the lower level of our main hospital…So, navigating the massive complex of the UIHC and the parking and ramps and all those kinds of things makes it especially challenging for this patient population.”

In 2016, UIHC proposed expanding their Iowa River Landing Clinic to increase patient capacity. While the idea was abandoned in 2020 due to UIHC wanting a larger expansion, in its place was the project to build an entirely new hospital, seen today in North Liberty.

Ultimately, a completed North Liberty Hospital will allow the entire orthopedics department currently housed in Iowa City to relocate to the facility, freeing up a space at the main campus including:

• Over 100,000 square feet of space
• 107 in-patient rooms
• 81 exam rooms
• 11 operating rooms

How to specifically utilize those rooms once the orthopedics team has left is still up for discussion with the Iowa Board of Regents.

UIHC submitted a request to the State Health Facilities Council in February 2021 for permission to build the hospital. The council denied UIHC’s request in a 3-2 vote. The Associated Press reported representatives from Mercy Iowa City — then a private Catholic hospital, but now UIHC’s Medical Center Downtown, after a 2024 purchase — argued at the council’s meeting a new hospital would harm Mercy and other community-based hospitals’ business.

RELATED: UIHC North Liberty hospital construction halfway complete

Despite opposition, UIHC would get approval for the project from the state board six months later and began building within just a couple months, albeit under entirely different circumstances than any other UIHC project.

Unlike previous UIHC projects, the North Liberty Hospital’s contract for construction does not involve UIHC, though technically UIHC owns the hospital. Rather, the actual contract is written between UI Design and Construction and the project contractor JE Dunn, a national company with offices in Des Moines.

Lehnertz said the management change happened when the Iowa Board of Regents was disappointed with how the $392.7 million Stead Family Children’s Hospital project ended in 2019, as a multi-million dollarlawsuit with one of the contractors forced delays.

“The Board of Regents, rightfully so, said ‘How can you do things differently so that we can make sure we [have] a best project delivery university?’” Lehnertz said. “Since that time, we have shifted all project management, hospital or main [campus], to our Design and Construction and Facilities Management, which reports to me.”

Like the children’s hospital, the regents sought to avoid budget increases with the new project, but this hope would be challenged come 2022.

A ballooning budget

In July 2022, amid record high inflation, foreign wars, and a country recovering from the COVID-19 pandemic, UIHC officials returned to the regents asking to increase their project budget of $395 million by $130 million.

The national average for constructing nonresidential building inflation at that time was 3.7 percent. But those numbers increased dramatically in 2022, rising to 12 percent — the highest inflationary period since 1981. Adding to the costs was a significant national labor shortage with 50 million workers quitting their jobs, up three million from 2021. In Iowa, the job market was the tightest it had been in recent years.

Due to these challenging economic conditions, many hospitals under construction around the country faced considerable budget increases. The $123 million Tradewinds HCA Hospital in Florida increased its budget by 29 percent. A $619 million University Health System Women and Children’s Hospital Tower in San Antonio experienced a 32 percent increase.

However, some hospitals were able to manage the inflationary increases. The Mayo Clinic Health System’s new hospital project in La Crosse, Wisconsin, was able to wrap up with an increase of just $20 million, bringing the total to $215 million for the 287,000 square-foot facility that opened in August 2024.

The La Crosse hospital features a six-story space with accommodations for 96 beds, surgical procedural floors, endoscopy suites, cardiac catheterization labs, interventional radiology, medical-surgical units, an ICU, a family birthing center, and more.

The North Liberty facility, by comparison, has a  three-story hospital connected to a five-story medical office building. A separate building supports a 36,000 square foot central utility plant designed to be expanded as time goes on.

Additionally, the North Liberty Hospital has a variety of features including:

• Emergency department
• 24/7 pharmacy
• Areas for imaging
• A physical therapy gym
• Education area for students entering the health care industry
• 84 clinic exam rooms
• 12 operating rooms
• Two procedure rooms
• 14 emergency care rooms
• 36 inpatient beds

These amenities were implemented using nearly double the amount of space as La Crosse.

UIHC officials ultimately presented their 33 percent budget increase — taking the total to $525.6 million — to the Iowa Board of Regents as the maximum amount of money they would need to complete the project. Funding is solely driven by the hospital’s revenue bonds, private gifts, and building usage funds, as opposed to state money, according to Regent documents.

The budget increase request was approved, with the regents deciding delaying the North Liberty Hospital’s completion could hinder the time frame of future health care projects such as a new inpatient tower on the main campus, the construction of which is slated to begin this year.

In November 2023, questions surfaced from the regents regarding whether all of the budget increases came from just inflation.

The board hired national management consultant company Baker Tilly to complete an audit of the hospital project. The final report suggested communications mishaps between organizing parties and possible design changes later in the project could have contributed to the increased budget.

Baker Tilly identified kinks within the new managerial arrangement  between UI Design and Construction and UIHC, with some parties reportedly unclear in regard to their respective responsibilities, particularly when it came to communicating with JE Dunn, the private general contractor.

“We found that ownership of responsibilities, across the various stakeholders on the project, whether that be on the hospital side or design and construction side, and how they interacted with JE Dunn and other stakeholders, at times, those responsibilities could’ve been better communicated and better understood,” Heath Whitaker, senior manager at Baker Tilly, reported to the regents in 2023.

Whitaker also said there were some issues with the process of purchasing items, specifically from JE Dunn.

“We received word from JE Dunn that there were some items on the procurement list that they were not fully aware of their arrival and didn’t have complete oversight and insight into when those would be arriving,” Whitaker said.

He said more transparency between different teams would help avoid any late design changes.

“There could be increased visibility between the different project teams just to ensure the correct approvals are being performed to alleviate late design changes,” Whitaker said.

When questioned by the regents on whether Baker Tilly found late design changes contributed to budget increases, Whitaker said they were unable to say for certain.

Despite the auditor’s report, both O’Deen and Lehnertz said communication worked well for the new project, as their partnership worked to keep the project ahead of schedule. Lehnertz anticipates the project will come in approximately $20 million under budget.

“It really did take a focused effort among all these different teams coming together in a very coordinated way to ensure that everything remained on track,” O’Deen said. “We’re really proud that we’ll be completing the project on schedule within approved budgets, and I think it will have an outstanding outcome.”

Cornering the competition

In combination with the acquisition of Mercy Iowa City, the North Liberty Hospital’s emergency department, and the main campus ER, UIHC is positioned as the only hospital system for emergency visits in Johnson County. In fiscal 2024, UIHC saw more than 54,000 emergency room visits.

Lehnertz said the centralization of emergency rooms will be beneficial for the county as a whole because it allows the main campus to decompress their patient load to the other two hospitals.

“This fits perfectly — really ideally into what we would hope in serving the community from an emergency basis,” Lehnertz said. “Prior to all of this, there were two options: University of Iowa, which is the main [campus] right behind the field house, the main emergency room, and the Mercy Hospital emergency room.”

“Their’s [Mercy’s] was a quiet emergency room,” he continued. “Ours was an hours-of-wait emergency room, and a challenge for everybody, simply not because people weren’t cared for, but because it was overworked.”

What makes the new system great, Lehnertz said, is that each emergency room can handle whatever emergency comes up, but they also each have their own specialties in regards to specific ailments.

“If one isn’t feeling well, the downtown [campus] is a great place quick in, quick out,” Lehnertz said. “The orthopedics [hospital], if you break an ankle, break a wrist, injure an appendage, is a great first stop because that’s where the orthopedics experts are.”

However, Lehnertz said the expertise at the main campus can handle the most serious issues.

That advice is especially important in life-and-death situations with the North Liberty Hospital having the lowest-level trauma center rating of the three locations.

The North Liberty Hospital has a level-four trauma center which, according to UIHC, provides advanced trauma care and life support, but it is typically in preparation for transfer to a facility, such as the main campus ER, which provides a higher level of specialized care with a “broader scope of surgical, specialty, and subspecialty services.”

When asked whether the emergency department will have rooms equipped with OB-GYNs and equipment used for birth, UIHC Communications Specialist Taylor Vessel wrote in an email to the DI that staff will care for patients in such conditions.

“Our North Liberty emergency care is equipped to treat and triage a vast array of emergent health issues,” Vessel wrote. “Most patients expecting a child will have a predetermined plan that they’ve worked out with the support of their OB-GYN, which would include where to go for needed services. If a patient in active labor comes to any of our emergency departments, staff will support them with the care they need and coordinate to get them where they need to go.”

Where they need to go, though, could be as far as 10 miles to the main campus location, which is a level-one trauma center: the highest possible designation. All ground transportation between the three hospitals will be handled by the Johnson County Ambulance Service, run by the county, not UIHC. But both Lehnertz and O’Deen said they have a great relationship with the service, and that will not change.

For patients who might come to the hospital experiencing a heart condition. Vessel wrote they will go through patient priority processes.

“For patients in need of cardiac catheterization lab services, staff at our North Liberty medical campus will utilize existing triage processes (through UI Health Care’s admission and transfer center) and transfer the patient to the most appropriate facility for care,” Vessel wrote.

Bradley Haws, chief executive officer of UI Health Care, told the Board of Regents on Feb. 27 the main difference between the level of trauma centers was their ability to do general surgery.

“The difference between threes and fours is that they would have general surgery available consistently in that center, and so we are not planning on having general surgery, at least at the opening in North Liberty, but they do have general surgery coverage in the downtown campus,” he said.

General surgery encompasses some of the most common surgeries, which might include a skin graft, breast biopsy, or appendix removal.

Haws also said they are exploring different options beyond just relying on the Johnson County Ambulance Service for people who may go to the wrong emergency department.

“We are partnering very closely with the emergency transport services,” Haws said. “I won’t sit here today and say that that’s going to be a fail safe methodology. We are preparing in case somebody goes to North Liberty, as an example, because they live close.”

While orthopedics is the North Liberty Hospital’s primary focus, according to UIHC, the facility is in a phased development. That means the hospital will continue to expand through phases and is specifically designed for extensions. In an interview with the DI, Associate Chief Nursing Officer at UIHC Emily Ward emphasized that ability to expand.

“What we’re achieving here, it’s not only allowing us to grow services, specifically in orthopedics and rehabilitation services, but it’s also freeing up space at the university campus,” Ward said. “It’s allowing us to expand services back there for other service lines and patient populations.”

As UIHC’s services expand, Steindler Orthopedics — a private practice with headquarters in Iowa City that had associated with then-Mercy Hospital — is also opening a new clinic for $30 million this year just down the road from the North Liberty Hospital. It will offer  many of the same services. The new building broke ground in 2023 and is positioned to offer an alternative for orthopedic care in the area.

“The new facility will allow our team to expand the care we can provide for our patients, give the community choice in where they receive care, and will be conveniently located right off of I-380,” the clinic’s website states.

Alec Salter, marketing specialist at Steindler Orthopedics, said while it’s much smaller than the North Liberty Hospital location, the new clinic is in a location that can compete with UIHC.

“We do similar things. It’s a competing market,” he said. “It’s not something we’re all really concerned about, though, just because of our past performance compared to the university. We’re pretty confident.”

Money maker

The orthopedics industry is one of the highest revenue-generating medical fields, and while it’s still not exactly clear how much revenue the new hospital will generate, it will undoubtedly rake in hundreds of millions of dollars.

The national industry surrounding orthopedic devices alone is worth $16 billion with estimates of it growing to $19 billion by 2029. What makes orthopedics one of the most profitable medical industries is its growing demand.

According to data from HealthCare Appraisers, orthopedic-based surgeries like knee and hip replacements that rely on orthopedic devices, are expected to double from 2014 to 2030.

“These procedures are expected to increase dramatically in the coming years, with growth driven by an aging and more active population, improvements in implants and related technology, and the prevalence of obesity,” the Healthcare Appraiser website states.

Further adding to profitability, orthopedics has many subfields including radiology, physical therapy, durable medical equipment, and orthopedic-focused urgent care that can generate their own revenue streams — all of which are features of the North Liberty Hospital.

Despite the cost of building a new hospital over the past four years, UIHC has maintained a strong financial position. Their total equity is $3.2 billion, increasing by $508 million over the last fiscal year, according to international auditing firm KPMG.

But the new hospital comes amid some cutbacks, including the inpatient eating disorder program in 2022. While the outpatient eating disorder program continues to operate, UIHC announced three years ago the inpatient program closure allowed the redistribution of resources to focus on patients with “acute mental health care needs.”

Next door neighbors

A half-billion dollar hospital, though, has had an economic impact in the surrounding area already. Dale Ingle, who lives right next to the hospital, said he’s seen apartment buildings go up in the last year. The development of what was once rows of cornfields is something he thinks was inevitable.

“It’s just continually shrunk to the point where I think it was going to do something,” Ingle said. “There were some wild turkeys and things that, of course, aren’t there anymore. I think it’s an inevitable type of arrangement where the two cities are going to meet.”

Ingle has lived in his house, now right next door to the hospital, for 31 years. He’s raised two children and has two grandkids who played on swing sets in his backyard during the COVID-19 pandemic. Ultimately, Ingle said he expects the hospital will spur economic growth in the area.

“To the businesses around here, it should be a big boom of bringing in all the people and everything else,” Ingle said. “So, I think economically, I think it’ll do a lot of good for the area right around here.”

Ingle said, however, he wasn’t sure they needed such a large hospital, and having the North Liberty Hospital with Steindler down the road
seemed excessive.

“Having two hospitals close by, because Steindler’s out here too, that is probably a little bit of overkill,” he said. “So, I’m not sure that we need a hospital quite this big.”

Just six doors down from Ingle lives Marvin Feigenspan, a man who’s worked as a tank mechanic in Europe during the Vietnam war, founded his own church, started a nonprofit, and has lived on the same street for more than 20 years.

Feigenspan said he sees the new hospital as adding value to his neighborhood. He said some in the community may be apprehensive about the dominance of UIHC, but he doesn’t see that as an issue.

“I haven’t heard anything toward the hospital in a negative way. Other than now, the university is the only major medical provider in this whole community,” he said.

Feigenspan said his biggest concern is the traffic that fills up his road, which is a single lane two way street. He said the morning and evening hours get especially congested, and he expects the road will eventually need to be expanded. But he thinks the hospital will promote economic growth in the area.

“It just brings it up to a level of, not only people who live here, but of specialties of other companies coming in, of an additional focus in our community, to train and equip other doctors,” Feigenspan said. “I just think it’s a plus all around.”

Next steps

With construction completed in December 2024, the next steps for the hospital include hiring staff, installing equipment, and moving furniture into the new space.  Both equipment and furniture is budgeted at more than $92 million.

Hiring will be a challenge. Physicians are in short supply, and the demand for them keeps getting higher, posing potential challenges for hospitals across the country and UIHC. In 2021, the Association of American Medical Colleges reported there was a shortage of about 46,000 doctors in the U.S. with numbers expected to reach 124,000 by 2034.

Ward said the hospital will have 700 staff members, which will be composed of new hires and transfers from other UIHC locations.  The current number of people they need to hire for the North Liberty Hospital is a moving target. She said the type and number of staff they are hiring is fluctuating as they near completion of the hospital.

UIHC is hiring a variety of positions beyond just orthopedics. Positions in the emergency department, imaging, pharmacy, advanced-practice providers and more are
also open.

She said the cutting-edge nature of the hospital will help attract the workforce they need for the hospital.

“[The hospital] has amenities that I think will allow our staff to flourish and be successful in their jobs there, and we hope it’s an environment that will attract additional workforce for us,” Ward said.

O’Deen said as they enter the final stages of the project, she is excited to see the facility advance orthopedic care in the state as well as the country.

“This is really going to be a premier center of excellence for orthopedic care,” O’Deen said. “We’ve visited a lot of other places across the country, and I think it’s going to be second to none.”