Indianapolis-based Indiana University Health’s downtown hospital is about 80% complete, with the exterior finished and crews at work on the interior to meet a planned December 2027 opening.
The $2.49 billion hospital, IU Health Medical Center, is part of a $4.74 billion academic medical campus, which includes a medical office building, central utility plant, the Medical Research Education building and south support building. The campus total has increased from a projected $4.3 billion in July 2024.
In the second quarter of 2026, IU Health reported an operating income of $51.2 million (1.9% margin), down from $132.7 million (5.4% margin) during the same quarter last year. Operating revenue was $2.7 billion and operating expenses were $2.7 billion.
Jenni Alvey, senior vice president and CFO of IU Health, told Becker’s in September that the system is running “about where expected” regarding its finances amid major investments. Along with the hospital campus, IU Health is investing in a systemwide Epic implementation with a go-live day of May 1, 2027; and a new Fort Wayne, Ind., hospital opening that same day.
“I’ll say maybe more so than just Q2 — in 2025, ’26 and ’27, we have intentionally been in a period in which we are spending a lot of money on one-time costs,” Ms. Alvey said.
At IU Health Medical Center, the new campus will consolidate high-acuity adult care from the system’s Methodist and University hospitals in downtown Indianapolis into a 2.56 million-square-foot, three 16-story tower facility. It will have 860 private inpatient rooms, 110 emergency care spaces, 50 operating rooms and 380 outpatient exam rooms. Infrastructure is also in place for a fourth tower.
Designed to serve for 75 to 100 years, the hospital is estimated to save IU Health about $50 million annually in facility costs to reinvest into patient care.
“We are making investments for the future,” Jim Mladucky, vice president of of design and construction, IU Health, told Becker’s. “One of the things that a mentor of mine talked to me about is how healthcare has a fast metabolism that changes quickly, where construction has a very slow metabolism. It takes a long time to design, to build things.”
Mr. Mladucky said the campus vision started around 2015 and construction will be substantially complete at the end of September 2027. He said as technology changes over time, the campus is well equipped to absorb changes in medical equipment and AI.
Rising costs also forced the system to rethink some of its plans. Initially, the plan was to put parking underground, but the cost was “way more” than expected, Mr. Mladucky said. Parking will now be in the south support building, where patients and visitors will walk across an enclosed pedestrian bridge into the hospital, something he called a better patient experience than being “underground in a dark cavern.”
Erin Pattee, vice president of project planning and operations at IU Health, said they have also worked closely with the finance team to make decisions on what supports effective patient care and what makes sense for the system in the long term.
“We start with that question of what problem are we solving,” she said. “We consider whether that change is essential to care delivery, whether it helps our team work more effectively or if it can prevent a larger expense later. We weigh those benefits against the cost, timing and alternative, and certainly with the schedule, but we’re really looking for that least expensive option … but not every good idea is necessarily best.”
Ms. Pattee said their team is focused on operational readiness like new workflows and efficiencies, and new optimization of processes.
IU Health has had nearly 800 team members take part in operational planning, and the system is launching a change readiness workstream to prepare leaders as staff from Methodist and University merge into one hospital. In 2027, the workstream will include “an immense amount” of simulation, training and orientation to ensure staff are ready to run the new facility.
“Opening day is certainly a really big milestone for us, but really the ultimate goal is we have to be ready to care for patients,” Ms. Pattee said.
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