Regents approve University of Iowa's request to submit $20 million bid to acquire Mercy Hospital

The Iowa State Board of Regents unanimously approved the University of Iowa’s request to submit a bid to acquire Mercy Hospital during a special session Tuesday morning.

The University will submit a bid proposal of $20 million to the State of Iowa bankruptcy to purchase Mercy’s 14 buildings across its campuses in Iowa City, North Liberty, Kalona, Tipton and Williamsburg. The proposal will also include all of Mercy's business operations.

The Regents’ approval does not signify an official acquisition but only allows the university to bid in the bankruptcy auction. A bankruptcy court will determine the most suitable buyer once the auction for Mercy’s business rights and facilities begins. The first of Mercy’s bankruptcy hearings was held Tuesday morning.

Mercy Hospital voluntarily filed a bankruptcy petition Monday morning. The University of Iowa announced its intentions to acquire the facility the same day in a release.

More: University of Iowa plans to acquire Mercy Hospital for $20M as facility files for bankruptcy

Mercy Hospital wants to keep ownership in Iowa City

University of Iowa President Barbara Wilson said Mercy Hospital approached the university and asked the institution to submit an acquisition bid.

“We recognize the outcome is in the hands of the court, but we share a goal to preserve the ability to offer health care access to a wide variety of individuals in the community and beyond,” Wilson said during Tuesday's Regents meeting.

The university president said the potential acquisition aligns with the school’s vision for the future.

“This is one way to continue to meet the needs of this community and around the state,” Wilson said. “Our goal is to continue to provide health care, make sure we are serving the needs of the state.”

University of Iowa remains committed to health care

The university, home to the prestigious University of Iowa Hospitals and Clinics and the Stead Family Children’s Hospital, is one of the top health care programs in the state. Wilson believes acquiring Mercy helps continue that tradition by providing greater access to residents around the area.

“The health care system is increasingly stressed and we have an aging population,” Wilson said. “We have more and more complex needs among our patients and have a shortage of physicians.”

The university acknowledged the complexity of bankruptcy proceedings, which means a final resolution may take some time and admitting officials have many “unanswered questions.”

UI legal team asks bankruptcy court to move quickly on Mercy Iowa City deal

The University of Iowa’s legal team will propose an agreement to the bankruptcy court with certain bid protections “that honor and protect the interests of all involved.”

The university will agree to retain and maintain medical staff while they pledge to establish an advisory board and hire an operational leader. The UI said they will also make routine and strategic capital investments into Mercy.

The UI's legal team said they will urge the court to complete the auction by the end of September, hoping to complete the process by November.

Mercy Hospital confirmed during Tuesday’s Regents meeting that it will continue to see patients as the bankruptcy hearings unfold.

Brandon Hurley is the editor of the Iowa City Press-Citizen and the Ames Tribune. He can be reached at bhurley@gannett.com.

This article originally appeared on Ames Tribune: Regents approve University of Iowa's request to bid on Mercy Hospital