IU Health upsizes downtown hospital project to better serve Indiana

March 25, 2024
INDIANAPOLIS – Construction is in full swing on Indiana University Health’s new downtown hospital and expanded medical campus, which will bring a next-generation acute-care adult hospital to Indiana. The significant project at 16th Street and Capitol Avenue will combine operations of IU Health Methodist and University hospitals upon its opening and expand investments in community health initiatives and neighborhood development.

As construction on the new hospital and expanded downtown medical campus moves forward, IU Health’s board of directors has updated the scope and cost of the project.

The hospital has been upsized, to 864 private patient beds from a previously planned 672 beds, with the height of the hospital’s three bed towers set at 16 stories, the upper range in the city-approved design plan. IU Health’s board believes the larger capacity is needed to meet forecasted inpatient demand, including for a growing caseload of sicker patients. The COVID-19 pandemic also has shown how deeply the state relies on IU Health, as Indiana’s largest hospital system, to supply the acute-care capacity to respond to large-scale medical emergencies.
The construction cost of the new hospital is now budgeted by the board at $2.31 billion. This reflects rising construction costs of over 20 percent since the project was first budgeted, as well as IU Health’s commitment to upsize the hospital to best serve Indiana’s needs. IU Health is working closely with its construction partners to contain costs and achieve efficiencies during the building process. Upon completion the new hospital will save $50 million a year in operating costs by consolidating two large acute-care hospitals, eliminating duplication of many services.
The cost of support buildings, infrastructure and other expenditures on the expanded 44-acre campus and neighboring properties is projected at an additional $1.98 billion. Support buildings include medical offices, parking garages and logistics space.
The opening of the new hospital for inpatients has been moved to the fourth quarter of 2027. The new date reflects the longer timetable needed to construct the larger building in the midst of a skilled labor shortage.

IU Health remains committed to its supplier diversity program that increases business opportunities for veteran, women, minority (XBE) and locally owned businesses. For the downtown hospital project, the goal is 30 percent XBE participation on design and construction work with a minimum of 50 percent Indiana-based business participation.

The new hospital and surrounding support buildings will be developed as an environmentally sustainable campus to manage pollution and minimize runoff. IU Health improved site conditions by removing soil contaminated from previous commercial uses. Buildings will be U.S. Green Building Council LEED Silver-certified and U.S. EPA Energy Star rated for energy efficiency and a healthy indoor climate.