Micro-Hospital, Big Opportunity

Micro-Hospitals are sweeping the U.S. in major cities like Chicago, Cleveland and Las Vegas, and could easily span world-wide as well.

A CT scan machine at the St. Vincent micro-hospital in Noblesville, Indiana. Photo by: Jenna Watson/IndyStar.

Small in scale, big in impact

“In an evolving healthcare landscape, it's no surprise healthcare providers are being forced to rethink their delivery models and reevaluate outdated economies of scale."

Today, many providers are considering plans to build or convert their facilities into micro-hospitals. It’s a US trend that is sweeping nationwide in major cities like Chicago, Cleveland and Las Vegas, and a trend that could easily span world-wide as well. In markets where demand might not be able to support a full-scale hospital, these small-scale hospitals are becoming a very viable, cost-effective option.

Rethinking current delivery models

It’s no surprise that healthcare providers have been forced to rethink their delivery models and reevaluate outdated economies of scale because healthcare delivery systems are evolving rapidly. At one point, using volume-based strategies to design hospitals made a lot of sense. But now, there are different factors to consider.

For one, there is an increased utilization of outpatient care, including ambulatory surgery, and so healthcare providers are thinking more about what services their communities really need.

Typically, micro-hospitals are 20,000-square-foot, single or 2-story buildings, which have 10 to 12 inpatient beds and core services including emergency care, diagnostic radiology, labs, pharmacies, nutrition and of course, outpatient services. They are efficient, lower acuity hospitals, smaller in overall size, design and complexity. Compared to a traditional hospital of say, 350 beds that would cost between $350 and $500 million to build and equip, according to the advanced Power and Energy Program at the University of California, Irvine, micro-hospitals may only cost between $15 and $20 million.

The lower initial capital outlay is obviously a very attractive part of the micro-hospital concept. By matching clinical services with acuity, micro-hospitals require less investment in high priced capital-intensive equipment. It reminds me of a US trend in the 1980’s, when Community Health Centers were cropping up all over the map. But micro-hospitals differ from these centers and healthcare clinics, because they offer in-patient care and overnight observation beds, they will typically fall under requirements for hospital licensure. Micro-hospitals are also useful in the treatment of chronic disease when an overnight hospitalization is necessary.

Micro-hospitals have less highly-sophisticated equipment and use flexible concepts like combined procedure/operating rooms. While these combined rooms may require a higher standard of construction, there is greater utilization and it is still less expensive than building two rooms. Likewise, modular design concepts are often used for flexibility. This offers a high standard of care by improving local access to physicians and inpatient services simultaneously.

Certainly, major hospitals and academic health centers are here to stay. There will always be patients who require specialty or intensive care because they have multiple diseases or complications.

While medical planners still need to assess community needs and build medical facilities that are appropriate to the population being served, micro-hospitals can give healthcare providers a way to proportionately deliver high-quality care in a small community setting. It is an effective way to introduce good practice care in a manner that is appropriate for local health-care needs. And being a smaller facility, closer to home, it will increase patient satisfaction.

Micro-hospitals are finding their place between community health clinics, free-standing surgical centers and full-scale hospitals. Chances are this trend will continue.