5 common questions about micro-hospitals, answered

Micro-hospitals are popping up around the country, but many providers still lack a solid understanding of what a micro-hospital is and how it can help satisfy emerging needs in their markets. 

"The definition of what is and what isn't a micro-hospital has also expanded significantly," said Vic Schmerbeck, executive vice president of strategy and business development at Emerus, a leading micro-hospital operator, during a March 30 webinar hosted by Becker's Hospital Review.

For Emerus, which focuses solely on joint-venture partnerships with health systems to launch micro-hospitals, this trend isn't new. The company has 10 joint ventures and 21 micro-hospitals in operation around the country.

In the webinar, Mr. Schmerbeck answered the most common questions healthcare executives have about micro-hospitals.

1. What is a micro-hospital?
Microhospitals are independently licensed facilities with acuity comparable to a community hospital, but at a fraction of the size. Though the term has grown to include $100 million-plus projects with up to 50 beds, Mr. Schmerbeck noted that Emerus still defines them as much smaller facilities — with only about eight to 15 beds.

The buildings range in size from about 30,000 to 60,000 square feet because they often function as a "healthplex" and include ancillary service lines and physician offices. The idea is "to deliver a lot of the pre-acute care in a given neighborhood in a place where people work, live and play, and to bring a higher level of service than what you would find with just a retail clinic or urgent care," Mr. Schmerbeck said. 

2. Why choose a micro-hospital over similar facilities, such as freestanding EDs or urgent care centers?
Many health systems choose micro-hospitals because they can provide more services to the community than a freestanding emergency room, and their activity levels are much broader than your average urgent care center.

"We really feel like the core of the micro-hospital is creating that ambulatory pavilion along the continuum of care," Mr. Schmerbeck said.

The acuity level of a micro-hospital is slightly lower than that of a community hospital, but it serves a significantly different patient population than an urgent care center. The value proposition of the micro-hospital manifests when it is considered as part of an overall delivery system — it is uniquely positioned to deliver care in a more cost- and operationally efficient manner. The result is a branded healthcare destination that facilitates continuous patient engagement.

3. What type of markets work best for micro-hospitals?
"We often hear from health systems as we look at a particular market, 'It's a growing area,' or, 'It's a replacement facility; don't we need to build something bigger?'" Mr. Schmerbeck said. In short, the answer is not really. He tells clients to identify the market need today, and then fill that need, plus a little more — period. If demand outpaces the supply, then he suggests building another capital- and operationally efficient facility, because the whole idea is to stay small within a particular community or neighborhood.

This idea of staying small is what makes micro-hospitals so versatile. While every market has unique circumstances that must be considered before deploying the model, micro-hospitals can thrive in urban, suburban and rural areas. The key is to carefully assess market dynamics across the continuum of care so fixed assets are not replicated and to understand what patient populations seek most in that particular setting.

4. What are the benefits for the patient?
Micro-hospitals are healthcare's small batch product — meaning the patient is getting a premium experience. "It's a very compassionate and patient-friendly care model," Mr. Schmerbeck said. The small format helps drive high-quality care and higher patient satisfaction by allowing providers to focus on fewer patients and produce better outcomes. Microhospitals also offer faster discharge times, shorter length of stay and reduced wait times, and can operate as a one-stop shop, with both primary and secondary care onsite. They help patients feel more taken care of and can help build the patient relationship with a hospital brand — which ultimately reduces leakage. "The idea is we want to capture that patient in the system, align them with a medical home, preferably our partner system, so they can be treated at the right place and right time for their future needs," Mr. Schmerbeck said.

5. What common challenges are associated with deploying a micro-hospital?
Several challenges accompany the adjustment to a smaller format hospital. The first is what Mr. Schmerbeck calls "scope creep." He cautions healthcare leaders to be diligent about sticking to the results of a needs analysis. Micro-hospital projects have the tendency to grow over time and suddenly become 100,000 square feet and 25 beds, eliminating a lot of the cost benefits of a smaller facility.

The second challenge is in marketing — leaders must remember the concept is new to patients too. Providers need to consciously design marketing campaigns to help patients understand the value of the facility. Another challenge providers often face is in staffing and culture. It's best to identify employees who will succeed in a small format, because that is not the case for everyone, Mr. Schmerbeck said. Lastly, he advised providers to consider the operational challenges associated with microhospitals. They require unique workflows, operational strategies and even EMR design to maximize efficiency.


To view a copy of the webinar slides, click here.
To view a recording of the webinar, click here.


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