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U of Iowa Health Care offered $605M to buy Mercy Iowa City

Mercy Iowa City was offered $605 million by University of Iowa Health Care last year for ownership of the hospital, The Gazette reported Aug. 5. 

Mercy Iowa City began seeking a partner last year and received four proposals, including Iowa City-based University of Iowa Health Care. If the hospital had accepted, it would have ended a 137-year separation of the two organizations. However, none of the four proposals were determined to be a good long-term fit, according to an email Mercy officials sent to employees at the end of July, The Gazette reported. The hospital will remain an affiliate of MercyOne. 

"We believe that UI Health Care is the ideal partner for Mercy Iowa City," the university health system's proposal obtained by The Gazette read. "Our goal is to combine the resources of UI Health Care’s comprehensive, integrated delivery network with the unique local strengths of Mercy Iowa City to expand the scope of care and improve access."

The proposal continued that the hospital would be at the center of the health system's plans to create a community hospital division. 

Funds for the proposal would also be broken up over a decade, according to the publication, with "$250 million for 'primary and specialty care growth to supplement existing strengths in orthopedics and obstetrics,' $150 million to improve Mercy’s financial performance … through bond refinancing, $95 million for facilities, equipment and technology infrastructure investment, $85 million to satisfy Mercy’s unfunded pension liability and address staff retention, training and development and $25 million to rebuild and expand Mercy's medical staff, including compensating affiliated but independent providers and recruiting new ones."

Further commitments from UIHC included retention of current physician groups, focus on efficiency of patient transfer, reopening the hospital's gastroenterology center and reestablishing community access to neurological care. 

However, the deal between UIHC and Mercy Iowa City did not materialize, and neither organization offered further comment, according to the publication.

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