Hoosier Firm Plants Midwest Values,
Spurs Building Boom

by Craig Barner

Visiting Methodist Hospital in Indianapolis is like taking a snapshot of Midwestern values: Attentiveness, strong principles and professionalism are evident throughout.

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Well-groomed lawns embrace the main entrance of the 775-bed facility on the city's Near North Side. Inside, directions are clearly marked so visitors know where they are going or where to find help. Physicians and nurses in white gowns confer animatedly as they circulate.

The qualities of hard work, dedication and excellence emerge with lucidity in the executive suite of Clarian Health Partners Inc., the parent organization of Methodist, Indiana University Hospital and Riley Hospital for Children, three hospitals that merged in 1997 to create Clarian.

Daniel Evans Jr., 57, president and CEO of Clarian, has the dulcet tones and thoughtfulness that mark him as a native Hoosier reared in the Midwest.

Complementing him is the enthusiasm of fellow Midwesterner Douglas Morris, 52, vice president of operations and facilities. Their combined attention to detail and energy has seemingly filtered throughout the organization.

Their vision of development to improve patient health, provide clinical and research excellence and help serve the community have helped made Clarian a good doctor.

The organization has emerged as a major developer in Indianapolis and throughout the rest of the Hoosier state since the partnership of hospitals formed nine years ago.

Overall, Evans said Clarian has built at least $750 million worth of construction projects since forming.

In its original formation, Clarian had just the three flagship facilities. Today, it comprises 17 hospitals and health-care centers.

Previously, the organization's facilities were only in the city of Indianapolis. It has since constructed two major suburban hospitals, the approximately $258 million Clarian North Medical Center in Carmel and the $170 million Clarian West Medical Center in Avon.

Smaller, less-celebrated projects included a child-care center, hemodialysis facility and pulmonary sleep laboratory. The organization also has expanded to other parts of the state, including LaPorte, Bedford and Tipton.

Most important, the organization is helping drive further economic activity by playing a leadership role in research, health care and Indianapolis' vast life-sciences sector.

David Johnson, president and CEO of BioCrossroads, a coordinating organization of life-science organizations in Indianapolis, said the metropolitan area is likely among the top-10 in terms of economic activity in the life sciences nationwide. He points to the unnamed, six-acre research and biotech park in the old canal area just north of downtown at 10th and Meridian streets that is being developed jointly by Clarian, the Indiana University School of Medicine, Purdue University and others.

"Clarian has really been single-handedly responsible for taking the vision of having a life-sciences research, residential and business incubator all in proximity and putting up significant buildings," Johnson said. "And, they're projects attract other life sciences development."

Clarian has a board position on BioCrossroads and contributes an undisclosed amount of funding, Johnson said.

In its January report, the New York-based Standard & Poor's Rating Services cited Clarian's name as part of its recently raised credit rating on Indiana-issuer debt to "AA+" from "AA." (Standard & Poor's and Midwest Construction are both properties of the McGraw-Hill Cos.) Clarian was cited as an example of Indiana's growing service sector for "lead(ing) the way" in development for research, medical practice and life sciences.

For these and other reasons that Midwest Construction has named Clarian its 2006 owner and developer of the year, the magazine's eighth ever. Clarian is the first Indiana-organization to receive the honor.

Young Clarian, Old History

Clarian is a relatively young organization, but its predecessors have a long history in Indianapolis. Methodist Hospital opened in 1908, and IU Hospital and Reilly followed not long after.

The hospitals merged in part to take advantage of the resources of the large urban setting in Indianapolis for educating doctors, providing care and inspiring research.

Clarian saw the opportunity because many hospitals in the city previously followed their customers during the rapid suburbanization of the 1950s and 1960s.

The consolidation of Clarian also enhanced the hospitals' creditworthiness and economic sway to expand operations.

"Our ability to expand was enhanced by the merger," Evans said. "IU [Hospital] could not have done that by itself, and Methodist Hospital could not have done it by itself."

The merger has enhanced Clarian's reputation for clinical excellence. Lance Armstrong, the seven-time Tour de France winner and sports hero, was treated at IU Hospital in 1996 for testicular cancer prior to his championship run.

In 2005, Clarian had more than $2 billion in billings, a doubling from only five years previous due in part to its expansion. It has 1,580 beds in its core downtown Indianapolis and suburban hospitals and employs more than 11,000 people.

Evans has brought a wealth of business, legal and political experience with him to the leadership position.

A lawyer by training, he previously worked for Baker & Daniels LLP, a law firm in Indianapolis. In the early 1990s, he was chairman of Federal Home Loan Bank Corp. in Indianapolis, a wholesale institution that provides funding for home mortgages issued by member banks in Indiana and Michigan.

His political work includes serving as the chairman of the Indiana Board of Corrections in the 1970s and 1980s and working as the campaign manager of former Gov. Otis Bowen, a Republican who served from 1973 to 1981.

Evans cherishes his heritage. He is the fifth generation of his family to serve as a trustee of Clarian or its predecessor.

"I sit 30 ft. from where I was born," he added.

Morris is an architect who started his career with Archonics Inc., a design firm in Fort Wayne where his work included designing health-care facilities. About 20 years ago, he moved to the hospital owner's side by working in clinical engineering and maintenance with Parkview Hospital, also in Fort Wayne. He started with Methodist in 1992.

Not content to sit, Clarian has multiple projects under way, including the approximately $235 million Riley Phase V Bed Tower expansion, $150 million IU Cancer Center and the $44 million Education and Resource Center at the Canal.

Patient-Centered Design

As part of its expansion, Clarian has a definitive approach to architecture: evidence-based design.

The design philosophy seeks to improve patients' health in part because of studies showing a link between patient health and the way a hospital is designed.

"You've got to prove the design feature has a beneficial effect for the purpose the building was designed," Evans said. "Your opinion is no good to us: You've got to present evidence."

According to the Concord, Calif.-based research organization Center for Health Design, evidence-based elements could include providing patients with single rooms that can be adjusted to meet medical needs; improving indoor air quality with well-designed ventilation systems; and using sound-absorbing ceiling tiles and carpeting.

Clarian placed patient stations near patient rooms in the Cardiac Critical Care Unit at Methodist, Morris said. The idea worked because patient falls went down 75 percent.

Clarian officials prod designers to think about key things patients experience during their stay, such as lighting levels, layout of rooms and noise levels.

"They are an involved and interested owner who is looking to do architecture that is interesting and functional for their needs," said Bill Browne Jr., president of Indianapolis-based Ratio Architects Inc., a firm that has done four projects with Clarian.

A curative design was the overall theme at Clarian West, said Ben Wilhelm, vice president of Indianapolis-based Shiel Sexton Co. Inc., a partner of in the Shiel Sexton/GM Construction Joint Venture that served as the general contractor.

It included gardens, water fountains, greenscape and walking paths.

"In the lobby area, it feels like a ski lodge," Wilhelm said. "It's tranquil and serene."

SIDEBAR One

Enhancing Research, Patient Care

A vision that includes using development in part to improve patient outcomes and drive research has driven the expansion of Clarian Health Partners Inc. in Indianapolis.

"We are not building buildings just to own buildings," said Douglas Morris, vice president of operations and facilities. "We've got a mission or purpose for health care, and that sometimes results in a building and sometimes doesn't."

Take, for instance, the $65 million clinical laboratory on Canal Street. It will consolidate in one location the expertise and equipment for the eight million tests Clarian performs each year on patients.

The 320,000-sq.-ft., six-level laboratory is located on Clarian's People Mover monorail, and blood samples will zip in from hospitals up to a mile away via pneumatic tubes attached to the People Mover line.

Only five to seven minutes are needed to get the sample from the patient floor to the lab, Morris said.

"We're going to return test information to the physicians faster than we ever could before and more efficiently because the labs are consolidated in one place," he added.

They arrive with a barcode and go to the appropriate area for testing. After the test is performed, the results are stored in a computer, and caregivers in the remote hospital location can access the results. Meantime, the sample is put in storage in case further tests are needed.

In addition its normal testing function, the lab will also be used as an education and conference space for educating medical students and as office space for pathologists who oversee the facility.

Located in the unnamed six-acre biotech park at the head of the canal just north of downtown Indianapolis, the facility will also house the School of Medical Technology.
James Garrard, the recently appointed director of economic development for the city of Indianapolis, said Clarian's development is driving quality jobs into the city.

"Those are good-paying jobs, and those are a boon for our economy," he said.
Indeed, Clarian has provided "hundreds of millions" of dollars for research as part of its health-care mission, and its research focus is increasingly generating return benefits, said Dan Evans Jr., Clarian CEO and president.

"We help fund the attraction and retention of world-class scientists," he added.

"Clarian has partnered with the IU School of Medicine, which means the facilities have to be first rate in every respect."

Indianapolis' Eli Lilly Foundation announced in May that it is giving a gift of $7.5 million to help fund the approximately $150 million IU Cancer Center - a collaborative project between the IU School of Medicine and Clarian - that recently started. The grant is Lilly's largest, one-time donation.

Clarian has a board position on BioCrossroads, a coordinating organization of life-science organizations in Indianapolis, and contributes an undisclosed amount of funding.

"It's a pretty selective board of industry leaders," said David Johnson, president and CEO of BioCrossroads.

SIDEBAR Two

Clarian's Community

Community responsiveness is a key attribute of the development plans of Clarian Health Partners Inc.

Clarian North Medical Center was constructed in suburban Carmel in part because Hamilton County is among the nation's top-25 fastest-growing counties. Carmel itself saw 49 percent population growth during the 1990s and has added another 14 percent since then.

Similarly, Clarian West was started in suburban Avon because Hendricks County is believed to be among the top-100 fastest-growing nationwide.

But the People Mover monorail downtown might be the most visible example of community attentiveness. The system conveys Clarian employees and the general public among its different facilities over a 1.5-mi. elevated route.

The U.S. Environmental Protection Agency at one time cited Indianapolis for nonattainment of emissions goals, something that drew the attention of Clarian officials in part because of the health implications.

The People Mover opened in 2003 and provides, on average, 38,000 rides a month, said Daniel Evans Jr., president and CEO of Clarian.

"So that's eliminated 20,000 [car] rides a month," he added. "That's an incredible number of engines not starting up."

Ironically, Clarian employees greeted the idea with skepticism when it was originally announced because of the perceived simplicity of jumping in a car, but "now, it is almost essential that the People Mover is running," said Douglas Morris, Clarian vice president of operations and facilities. "If it goes down, the people are irate."

Clarian is inventive in its community involvement in other ways.

Like a lot of major organizations, Clarian supports diversity in contracting with goals of 15 percent minority-business-enterprise and 5 percent women-business-enterprise participation in part because economic success affects health. But it was dissatisfied with the impact of diversity goals on the community.

As a result, Clarian has taken a look at data on the promotion of minorities and women in majority companies and those companies' support for mentoring programs, apprenticeships and scholarships for minorities and women, in addition to requiring that diversity goals continue being met, Morris said.

"A lot of contractors say they can't increase [MBE and WBE] participation because capacity has been eaten up," he added. "In a lot of cases it has, but we want to know what else those owners are doing instead of just walking away."

The company also invests in the community.

Jon Mills, Clarian's public affairs manager, said the organization invested $380 million in 2005 for various projects, such as charitable care and funds to assist community groups like the Near North Development Corp. and Habitat for Humanity.

"Those are things you don't associate with health care, but the fact is they're inextricably tied - health care, education and wellness," he added.

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