Indiana University Health said Monday that the cost of its new downtown hospital complex will now exceed $4 billion, a 60% increase from previous estimates, reflecting higher construction costs and a significant increase in the number of patient rooms is due.
The new estimated price of $4.29 billion would likely make it one of the most expensive capital projects in Indiana’s recent history, in the same league as such large projects as the BP refinery expansion in northwest Indiana and the new Duke Energy Corp’s Edwardsport Power Plant in Southwest Indiana.
The health system said it plans to increase the number of private patient rooms in the new hospital by 29% to 864 from a previously planned 672. The three patient towers will have 16 stories, the top tier of the city-approved plan design.
“IU Health’s Board of Directors believes that the increased capacity is necessary to meet projected inpatient needs, including for a growing caseload of sicker patients,” the Indianapolis-based health system said in a written statement. “The COVID-19 pandemic has also demonstrated how much the state relies on IU Health, Indiana’s largest hospital system, to provide the acute care capacity to respond to major medical emergencies.”
IU Health’s announcement ends months of speculation about the downtown hospital project since the health system last summer reassessed the size, cost and schedule of the medical campus, a project that has been in the works for seven years.
The new hospital complex, which has been under construction for more than a year, will be located on 44 acres south of the health system’s century-old Methodist Hospital near 16 and Capitol Avenueth Street.
The planned opening of the hospital has been pushed back to the fourth quarter of 2027, about a year after the previously announced opening date of December 2026.
“The new date reflects the longer timeline needed to construct the larger building amid a skills shortage,” IU Health’s statement said.
The new hospital will consolidate much of the existing Methodist Hospital and University Hospital located approximately 1.5 miles southwest on the IUPUI campus. The eight-block expansion will expand IU Health’s presence from 16th South Street to 12th Street and from Capitol Avenue West to Interstate 65.
The complex will include a utility facility, a medical office building and an annex building with parking, loading docks and retail space.
It will also house the classrooms of Indiana University School of Medicine, which will be relocated from the IUPUI campus in a separate project costing $230 million.
Just last year, IU Health estimated the cost of the project at $2.68 billion, including $1.6 billion for the new hospital and $1.08 billion for supporting buildings and infrastructure.
The new price tag reflects higher construction costs and the scale of the project. IU Health now estimates the cost of the hospital at $2.31 billion and the supporting buildings and infrastructure at $1.08 billion.
The new cost estimate does not include the cost of demolishing or renovating any portion of Methodist Hospital. The hospital is a hodgepodge of buildings and wings sewn together over the decades, with mismatched floor panels, uneven ceilings, and a conglomerate of electrical, mechanical, and plumbing systems.
The total cost of the new hospital complex, which has yet to be named, exceeds several other recent major projects in Indiana. The expansion of BP’s Northwest Indiana refinery cost about $4.2 billion. Duke Energy’s massive power plant in Edwardsport cost more than $3.3 billion.
IU Health said that despite the higher price, the new hospital will save $50 million annually in operating costs by consolidating two large acute care hospitals and eliminating duplication of work across many services.
The architect for the hospital is Indianapolis-based Curis Design, a collaboration of BSA Life Structures, RATIO Design and CSO Architects. HOK acts as executive architect.
The construction manager is a joint venture between local companies Wilhelm Construction and Gilbane Building Co. of Providence, Rhode Island.