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Mercy Iowa City's sale delay harming community, orthopedic group says

Stalling by Mercy Iowa City hospital authorities over the facility's sale is causing employees to leave and patients to cancel procedures, according to the orthopedic group operating at the bankrupt hospital in an Oct. 25 report from The Gazette.

The uncertainty over the finalization of the sale of the 234-bed hospital to bondholder Preston Hollow Community Capital, which has placed a winning auction bid of $29 million, is wasting time and money, Iowa City, Iowa-based Steindler Orthopedic Clinic said in a court document asking a judge to enforce Mercy City's compliance with the auction results.

"As the manager of the ortho service line, Steindler surgeons and professionals are on-site at the hospital daily," according to the filed statement. "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."

Steindler President and CEO Patrick Magallanes told The Gazette 18 patient cancellations, referrals elsewhere and postponements have been reported in recent days, in addition to departures by employees.

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

A hearing is scheduled Oct. 30 to clarify procedures over how to fund ongoing operating losses at the hospital.

Becker's has reached out to Mercy Iowa City for comment.

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