Beacon Health System announced a $232 million expansion of Memorial Hospital in South Bend. (rendering courtesy: Beacon Health)

The president of Memorial Hospital in South Bend says the planned $232 million expansion serves as a signal of parent Beacon Health System’s commitment to the city and its residents. Larry Tracy says when Beacon initiated a master facility plan process in 2019, one option was to build a new hospital in the suburb of Granger in eastern St. Joseph County. In recent years, the health system has built its corporate headquarters, a smaller eight-bed hospital, and a health and fitness center in that community.

In an interview with Inside INdiana Business, Tracy said even though there was available space near those properties, relocating away from the urban center was not an option.

“It was the wrong thing to do for the city of South Bend. It was the wrong thing to do for our mission,” said Tracy.

Tracy further explained why Beacon Health decided not to build new on available land (what he calls greenfield) even though it was available.

Memorial has been in South Bend for 129 years. In 2009, Memorial’s competitor, Saint Joseph Regional Medical Center opened its new hospital in neighboring Mishawaka, leaving underserved populations with just one option in South Bend.

“We take care of some of the most vulnerable populations in our region. And access to care is extremely important for them,” said Tracy. “Once we did that analysis, it renewed our commitment to make this investment right here in South Bend.

Beacon Health System says the project includes construction of a 10-story tower. It will also add several new floors on top of a portion of its existing footprint. The project will result in more than 50 new patient beds on top of its current 250 adult bed capacity.

Tracy says expanding, instead of constructing new, also presents cost-savings.

“This investment gets us a bed tower. What it doesn’t get us is a new kitchen and a new Children’s Hospital and all these things,” said Tracy. “We have a lot of infrastructure here, that it would have exponentially driven that cost up. And quite frankly, we didn’t think that was a prudent use of dollars.”

Larry Tracy is president of Memorial Hospital in South Bend. (photo courtesy: Beacon Health)

Beacon says the expansion will create 500 new jobs, including clinical and general staff positions once the project is complete.

Analysis conducted by the South Bend Regional Chamber indicates the Memorial project will have a more than $400 million economic impact on the community when factoring in construction, local employment gains and increased economic activity.

South Bend Regional Chamber President and Chief Executive Officer Jeff Rea told Inside INdiana Business the $400 million estimate is probably conservative since some of the research was conducted prior to the pandemic. Since then, construction and labor costs have increased.

Rea says the Beacon project is one of the largest private investments the community has seen in decades.

“We are fortunate to have a top-notch healthcare system. This investment continues to show its commitment to the region,” said Rea.

Tracy says the pandemic allowed the health system to re-think this project, which begin in the spring of 2019.

At the time, the system was analyzing projected patient volumes, an aging population, and the types of patients it might serve in the years ahead.

“Then we got a year into the work and, ‘voila, we have a pandemic.’ And, and while it slowed us down, because obviously the emergent nature of dealing with the pandemic, it also gave us a laboratory to understand how this facility could be even better to meet the needs 5,10, 20 plus years,” said Tracy.

Part of the project is already underway. Construction crews must first renovate existing patient rooms on the 6th floor patient and mechanical system infrastructure.

Construction on the new tower is scheduled to begin in March 2023 with completion of the entire project in February 2026. Click here to learn more about the project.