The rise of the 'microhospital': 7 things to know

To grow their presence in certain markets, health systems are thinking small and opening so-called "microhospitals." Here are seven things to know about this care model and its newfound popularity.


1. Definition. While no microhospital is identical to another, most microhospitals are acute care hospitals that meet all federal and state licensing and regulatory requirements. They focus on treating low-acuity patients and providing ambulatory and emergency services, leaving more complex surgeries and service lines for their larger counterparts. They also have fewer beds, usually around eight to 12, and don't take up much space — according to the Advisory Board, they typically are only 15,000 to 50,000 square feet.

2. Common locations. Microhospitals are similar to community hospitals and small, rural hospitals, but location is what sets microhospitals apart. Health systems are placing microhospitals in larger metro areas in communities where patients may not have easy access to acute or emergency care. The microhospital, in theory, seeks to fill that care gap and provide better access to care, says Peggy Sanborn, vice president of partner integration and strategic growth for San Francisco-based Dignity Health.

Dignity Health opened one microhospital in Phoenix and plans to open one more in Phoenix and four the Las Vegas area. Broomfield, Colo.-based SCL Health has two microhospitals in the Denver metro area, and Dallas-based Baylor Scott & White Health has microhospitals sprinkled throughout Texas, according to Kaiser Health News.

4. Byproduct of value-based care. Many health systems are pursuing the microhospital model now because of the industry's increased focus on providing care at the right time in the appropriate setting. For SCL Health, the model allows the system to "deliver hospital services closer to home, and in a way that is more appropriately sized for the population compared to larger, more complex facilities," a system spokesperson told KHN.

5. Upgrade from a freestanding ED. Microhospitals and freestanding emergency departments are similar in that they both provide emergency care; however, microhospitals can also admit and guide patients to other appropriate care settings. Ms. Sanborn says Dignity chose to build microhospitals instead of bed-less EDs because microhospitals are designed to provide access to comprehensive care as part of a broader network, more so than a bed-less ED. Additionally, a microhospital can be seen as an extension of the freestanding ED model, she says, since most freestanding EDs need to be tied to a fully licensed hospital facility anyway.

5. Faster, cheaper. Another reason microhospitals are exploding in popularity is because they are less of a financial burden for health systems than a traditional hospital — the Advisory Board estimates building a microhospital can cost anywhere from $7 million to $30 million. Additionally, microhospitals have a shorter build time, allowing the health system to bring healthcare services to patients in the community faster, Ms. Sanborn says.

6. External partners. According to the Advisory Board, many systems — including SCL Health, Baylor Scott & White and Dignity — all chose to work with Emerus Holdings as external partner to open their microhospitals. As of April, Emerus operated 16 facilities and had more than 20 under development.

However, other established systems, such as Christus Health in Irving, Texas, are choosing to go it alone.

7. Long-term survivability. Microhospitals have the potential to be stalwarts in the industry if they're done right, according to Ms. Sanborn — meaning they complement a larger care footprint and can connect patients with different levels of care when they need it.

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