IU Health puts Methodist expansion plans on hold

Indiana University Health has pressed pause on its plans to build a bed tower at Methodist Hospital that could have cost as much as $500 million.

The tower, scheduled to open in mid-2015, would have added as many as 250 inpatient beds to Methodist. The additional capacity would have allowed Methodist to make all its patient rooms completely private.

IBJ broke the news of the latest effort to build the Methodist bed tower in April 2010.

But, in a letter sent last week, Jim Terwilliger, president of IU Health Methodist Hospital, said the slow economic recovery and the 2010 federal health reform law had prompted IU Health officials to take a “cautious approach.”

“We believed the project would have started by now, but because of several external factors, we have delayed the construction until we can fully ensure the design of the new critical care bed tower will align with the future health care environment,” Terwilliger wrote.

Among those uncertainties is that IU Health has signed up with the federal Medicare program to operate as an accountable care organization. Under that arrangement, future increases in its reimbursement will hinge on its ability to keep patients healthy, or out of the hospital.

Terwilliger’s letter addressed, but did not rule out, the possibility that the tower would be canceled altogether. He said IU Health is performing long-range planning for all three of its downtown Indianapolis hospitals—Methodist, University and Riley Hospital for Children.

“I don’t know what the recommendation will be, but I assure you that our commitment to ensuring IU Health Methodist Hospital continues to serve as a world-renowned critical care hospital for future generations remains strong,” Terwilliger wrote. “At the same time, we understand the difficulties of delivering pre-eminent patient care in an aging facility such as Methodist Hospital."

A $100 million fundraising campaign staged by Methodist Health Foundation will keep the funds it has raised set aside for the Methodist bed tower and for establishing fellowships to attract physicians and nurses. IU Health representatives did not immediately respond to a request asking how much the foundation has raised toward the project.

The bed tower project at Methodist has been discussed since the 1980s and has been formally palnned since 2000, but it has been delayed before because of its high cost.

The project would have also moved 100 psychiatric beds to a different part of Methodist and performed streetscape improvements at the intersection of Capitol Avenue and 18th Street.