Wishard Health Services has announced that as much as $703 million in low-interest public bonds is needed to build a new $754 million Wishard Hospital campus in Indianapolis, Ind.
The project will replace failing buildings that can't be renovated at the Indianapolis-based healthcare provider.
Each of Wishard’s three funding plan scenarios shows the project can be funded with current revenues and will not require any tax increase. Wishard officials have announced the system has saved more than $150 million to put toward the project.
“Wishard has developed most probable-, best- and worst-case scenarios on the cost of a new Wishard,” said Matthew R. Gutwein, president and CEO of Health and Hospital Corporation (HHC) of Marion County, Ind. “Even under the highly unlikely worst-case scenario, Wishard has adequate revenue to meet all bond obligations with no property tax increase.”
Hospital officials say the most-probable scenario would result in $612.9 million in bonds. Under the best-case scenario, Wishard would lower bonding needed to $604.3 million using Build America Bonds (included in the federal economic stimulus plan) which are intended to encourage construction projects. The worst-possible case, which has Wishard unable to raise any money through philanthropy and paying a full 100 basis points over the current bond rate, still leaves Wishard $6.7 million more than is needed to cover bond payments with no tax increase.
The new hospital is planned for a site currently owned by Indiana University on IUPUI’s campus and is ideally situated for patients, doctors, caregivers and students who practice on the IU Medical Center campus, the RL Roudebush VA Medical Center and Wishard.
The current hospital would be repurposed for the university’s expansion plans.
Architectural and engineering studies determined the current Wishard Hospital can't be renovated, and experts say the mechanical and electrical systems are in danger of failing.
“Wishard does not have the option to stay in its current facilities,” said Gutwein. “Although the buildings' problems can be fixed with a bandage today, soon they will require a tourniquet. Wishard’s aging facilities are the single largest long-term economic challenge facing the health system in the next 20 years.”
The new campus will include a 303-bed hospital, outpatient clinic building, power plant, parking garage and facilities for medical education and research.
Wishard receives $24.9 million annually from local property taxes to help offset the cost of care to the indigent and underserved. Other funding resources for the project include federal revenue and reimbursements and philanthropy advanced by the Wishard Foundation.
“We are grateful for the property tax support we receive from the residents of Marion County,” said Lisa E. Harris, CEO and medical director of Wishard Health Services. “Careful stewardship has always been a primary focus for us, and as we plan a new Wishard, this means meeting our community’s needs without increasing our level of support from property taxes.”
Property taxes comprise 5.4 percent of Wishard’s $486.4 million budget. In the past five years, HHC has reduced the percent of property taxes that contribute to Wishard’s budget to nearly one-third of what they were in 2004.
“Wishard is worth much more to central Indiana than it costs,” Gutwein noted. “Each year, Wishard contributes more than $1.2 billion in economic impact – including $719 million in wages generated by Wishard and HHC activities. Local taxpayers receive a return on their $24.9 million that would thrill any investor.”
The hospital is one of the five largest safety-net healthcare systems in the country, with more than 1.2 million outpatient visits per year. It provides 64 percent of all the indigent inpatient care in Marion County – more than all the other hospitals in the county combined.
Independent studies have concluded that a new Wishard will reduce the total space by nearly one third from 1.7 million square feet to 1.2 million square feet, serve more patients and save 45 percent in utility costs.