Health hot spot rises in Brownsburg

September 17, 2007

If Dr. David Schwartz's dreams come true, a sprawling hotel, hospital and medical office complex will rise on 83 acres just east of Brownsburg.

The former urologist from Virginia envisions a physician-owned facility that would serve Hendricks County's burgeoning population and draw patients from the entire metro area.

Schwartz's is the grandest--but by no means the only--plan to bring new health care facilities to Brownsburg, one of Hendricks County's fast-growing towns.

Some familiar local names, such as OrthoIndy, St. Vincent Health and Clarian Health Partners, all have claims to land in the Brownsburg area. And Danville-based Hendricks Regional Health, which already has a facility there, says it's always looking for more opportunities.

"It's the old monkey see, monkey do. Everybody who's got a hospital or health facility in Hendricks County seems to be successful," said Duane Sobecki, principal of Focused Results, a health care and banking consultancy.

Clarian Health opened a for-profit hospital in Avon in December 2004. St. Francis Hospital & Health Centers opened a medical office in Plainfield in early 2006. They joined Hendricks Regional, which has satellite facilities in Avon, Plainfield, Brownsburg and Lizton and recently expanded its hospital in Danville.

The new interest in Brownsburg promises to make Hendricks County as much of a health care battleground as Hamilton and Johnson counties, where fast-growing populations have drawn Indianapolis' four major hospital systems, including Community Health Network, into spirited competition.

Brownsburg and Hendricks County are attractive for a simple reason: growth. According to market research Hendricks Regional uses, the populations of Avon, Brownsburg and Plainfield each are projected to grow 10 percent to 12 percent in the next five years.

And it's the kind of growth health providers want: middle-class workers with employer-sponsored health insurance. The entire west side of Indianapolis has benefited from a boom in the logistics industry, which has dotted Hendricks County with warehouses and led to an expansion of the nearby Indianapolis International Airport.

"Brownsburg is a very important market for us," said Kevin Speer, chief strategy officer at St. Vincent Health. "If you look at the growth you're having there, it's probably not as fast as Fishers, but it's probably second-fastest [in central Indiana]. We want to make sure we're there."

St. Vincent already has set up shop, locating a family practice office and a physical therapy center in Brownsburg. But earlier this year, St. Vincent acquired options on another eight acres along Northfield Drive, with the help of BremnerDuke.

Speer said St. Vincent is weighing what to build there. Most likely, he said, it will open some kind of outpatient facility.

St. Vincent's acreage is just a few blocks from 7-1/2 acres purchased by Clarian less than two years ago. However, Clarian spokesman Jon Mills said the state's largest hospital system has no immediate plans for that site.

OrthoIndy is furthest along with its plans, winning county approval in August to build a 40,500-square-foot surgery center south of Brownsburg. Scheduled to open in September 2008, the center will replace offices OrthoIndy now maintains in Danville and on Indianapolis' west side.

"It's all about efficiency," said John Martin, CEO of OrthoIndy, which boasts nearly 50 orthopedic surgeons. "We also view this new expansion as an opportunity to expand our market [even beyond Hendricks County]."

But the most ambitious project comes from out of state. Schwartz, who is president of Virginia-based Metropolitan Medical Care Inc., intends to sign on area physicians to invest in a 317,000-square-foot hotel and hospital. He is still negotiating to buy land from Clermont Golf Course just off Interstate 74 and near the soon-to-come Ronald Reagan Parkway.

Schwartz thinks he can cut expenses by a third over typical hospitals by using part of the hotel as patient recovery rooms instead of using hospital beds.

Recovering patients would technically be discharged from the hospital when they are moved to the hotel, but hospital personnel could still monitor them using electronic sensors and wireless networks.

The hotel rooms would cost less because they would not have to adhere to the numerous regulations that apply--and add cost--to a typical hospital recovery room.

"You've got a lot less administration costs and support," Schwartz said, estimating that regulatory expenses account for 25 cents to 30 cents of every dollar spent in health care.

Schwartz figures that instead of spending at least $100 million for a 100-bed hospital, Metropolitan Medical can build a 20-bed hospital and as many as 175 hotel rooms for $60 million, plus the cost of medical office space.

Initially, Metropolitan Medical would use half the hotel for business and leisure travelers. But if the hospital services grow, it could take over the entire hotel.

The hospital would provide all typical services, Schwartz said, including surgery, radiology, a 24-hour emergency room and "virtually all" specialties. It also would require its doctors to serve uninsured patients in exchange for the hospital's paying to build out their offices and fill them with the necessary equipment.

"If we integrate with a commercial hotel, then we can provide health care, essentially hospital services, at two-thirds of the cost," Schwartz said. "All you're doing is putting your investment, your hospital, into those things that are cash-flow-positive."

If the hospital takes off, Schwartz also dreams of starting a hospital-based health insurance organization. He also plans to develop three more buildings--or nearly 900,000 square feet--for medical offices or health facilities, like a sports club.

Schwartz said Metropolitan Medical has an institutional investor who has agreed to fund the Brownsburg project, as well as others Schwartz is pursuing in Colorado and Virginia. He declined to name the investor.

Metropolitan Medical opened its first project, a medical office building on Shadeland Avenue in Indianapolis, last year. The firm still plans to build a hotel next to it.

Sobecki is skeptical of Schwartz's Brownsburg project. The key question, he said, is, "What kind of physician support does this new hospital have?"

Right now, not much. But Schwartz is undaunted. He said he got a lot of doctors interested two years ago, when he first envisioned this facility at Intech Park on Indianapolis' northwest side, so he's confident he can sign up doctors in Brownsburg.

"Basically, it's a win-win," he said.

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