IU Health updates scope of $2.3B hospital project

Indianapolis-based Indiana University Health's board of directors has approved the proposal to increase the size of its downtown hospital and expanded medical campus project. 

The hospital now calls for 864 private patients beds, up from the previously planned 672, according to a Jan. 9 news release from the health system. The board said the larger capacity is needed to meet projected inpatient demand, including for a growing caseload of sicker patients. 

 The budgeted construction cost of the new hospital is now $2.31 billion, according to the release. The updated budget reflects a more than 20 percent rise in construction costs since the project was first budgeted as well as the health system's commitment to expand the hospital to serve the state's needs. 

 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, according to the release. Support buildings include medical offices, parking garages and logistics space.

 The hospital is now expected to open in the fourth quarter of 2027, according to the release. The new date reflects the longer timetable needed to construct the larger building in the midst of a skilled labor shortage. 

 The project will combine the operations of IU Methodist and University hospitals upon its opening, according to the release. The new hospital is estimated to save $50 million a year in operating costs through consolidating the two large acute-care hospitals eliminating many duplicate services. 

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