IU Health expands the size and price of new downtown Indy hospital it's building

After weathering two-plus pandemic years, Indiana University Health officials said Monday that they have expanded the scope of their new downtown hospital just south of IU Health Methodist, now planning a $2.31 billion facility with 864 beds.

The pandemic also pushed back to the end of 2027 the new facility’s estimated completion date. Supply and labor shortages combined to slow work on the health campus.

Previously, the hospital had put a $1.6 billion price tag on the project and had estimated that the new facility would include 672 beds.

Unprecedented patient populations during the COVID-19 surges of the past two years, however, persuaded hospital officials to revise the number to better prepare for the future, said Nick Wojciechowski, vice president of project planning and operations.

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“The guiding principle of this building will be flexibility,” he said. “We learned during the pandemic that the Adult Academic Health Center became the hospital of last resort.”

All rooms in the trio of nine-story inpatient towers will be private rooms. The rooms will be large enough to transform into critical care rooms should there be more patient demand for that type of care than medical-surgical care, for which rooms can be smaller.

The current total number of beds equals the number of patient beds in IU Health Methodist and IU Health University combined. Pre-pandemic, hospital officials anticipated needing fewer inpatient beds in the future.

Nor could hospital officials foresee the increase in costs for building materials, which has helped drive up the total cost of the project, said Jim Mladucky, vice president of design and construction.

Typically the industry sees about 2.5% to 3% increases in costs year over year. However, 2021 saw 14% inflation. Even though inflation on construction costs was half as high in 2022, it was still higher than anticipated.

The downtown hospital is just one of many projects IU Health has underway, including doubling the size of its Fishers hospital. In the coming years, IU Health will invest close to $5 billion in construction, Mladucky said.

The Medical District

IU Health officials are calling the area where the new hospital will be built the Medical District.

The front door of the hospital building will be on Senate Avenue, and the building will stretch from that street to Capitol Avenue to the east. Across Capitol Avenue will be an outpatient medical building, called Capitol View.

The first seven floors of the hospital building will focus on ambulatory services, such as imaging and other outpatient procedures. Consolidating two hospitals into one, the new facility will have about 50 operating rooms, more than IU Health Methodist and University Hospitals combined, Wojciechowski said.

The IU School of Medicine will move from the IUPUI campus to a building that will be built in the area just south of the IU Health’s Neuroscience Center. Both this building and Capitol View are scheduled to open in 2025.

Not just health care

Retail space, which could include food and coffee shops, will be available streetside. “Our goal really is to look at what does the neighborhood need?” Mladucky said.

Initial plans had called for a grocery store, and that may still happen, but if it does, it’s likely to be a smaller store, Mladucky said. Now, IU Health officials say they’re exploring the idea of a grocery store a little bit to the north of the campus.

Other possible tenants include fitness or day care centers, two services from which IU Health could benefit, Wojciechowski said.

Some in the community have expressed concerns about whether building a multibillion-dollar facility will lead to gentrification in the area.

IU Health has been partnering with developers in the area to bring more affordable housing to the neighborhood to ensure that people who currently live there and could potentially be pushed out are not left without a home, Wojciechowski said.

“We’re very conscious about that and we’re working diligently to make sure that doesn’t happen,” he said.

Future undetermined for some buildings

Meanwhile, the future remains uncertain for many current IU Health buildings, including most of the buildings that comprise the current Methodist Hospital.

University Hospital will be turned over to IUPUI, Mladucky said. The Simon Cancer Center, which has been housed for more than a decade in a modern addition to University Hospital, will move north to the new hospital facility.

Discussions are also underway about what to do with the lighthouse, which has sat atop Methodist Hospital since 1933. The new hospital will feature a light beacon on the south tower that’s “a modern interpretation” of the structure, Wojciechowski said.

Contact IndyStar reporter Shari Rudavsky at shari.rudavsky@indystar.com. Follow her on Twitter @srudavsky.

This article originally appeared on Indianapolis Star: IU Health expands size of new downtown Indianapolis hospital