The 4 Things You Need to Know Before Developing a Microhospital

In healthcare, small is the new big. While some hospital systems have been busy expanding their services and extending their campuses by adding new buildings, in other places, some systems are offering healthcare on a smaller scale.

Termed ‘microhospitals,’ these facilities are often associated with and developed by larger healthcare systems. Microhospitals frequently provide services to people who live far from large hospitals. These smaller-scale facilities allow healthcare systems to care for these patients without investing in new, full-scale hospitals. They also make for great commercial real estate investments if you have a knowledgable medical office broker.

What do Microhospitals Offer?

On the surface, these healthcare facilities may sound like urgent care facilities, but they offer more than walk-in care. Although they are small, microhospitals offer full-service care — primary care services, emergency care, and even outpatient surgery. Many facilities also offer lab, imaging, and diagnostic services.

All microhospitals are different, but they all have some things in common:

  • Microhospitals meet all the licensing and regulatory requirements mandated by the federal and state governments for regular hospitals.
  • They have a much smaller footprint than regular hospitals (usually anywhere from 15,000 to 50,000 square feet).
  • They have fewer beds than a normal hospital — usually from eight to 15.developing a microhospital
  • Although these facilities mostly treat ‘low-acuity’ patients, some facilities offer basic surgeries and procedures (patients must seek care at larger hospitals for more complex services).

Gauging The Feasibility Of A Microhospital Project

When deciding whether a microhospital is suitable for a certain community, there are several things to consider. For those who work in commercial real estate, here are 4 basic guidelines for gauging the feasibility of a microhospital project.

1. An Area Analysis

First, a developer must investigate how a microhospital would fit into an existing community. Knowing the local demographics helps determine current patient volume. This lets the developer and investors know whether the community can support a microhospital. Also, potential patient volume dictates the size and capacity of the facility. Most of this research comes from healthcare market analysts.

developing a microhospital

2. A Space Program

Key insights from step 1 (area analysis) directly inform the design of the proposed microhospital. Based on the area analysis, planners look at issues like patient care areas, storage capacity, imaging departments, and functional support spaces to determine what is needed.

Some spaces could function as multi-use areas which would lower the total square footage and keep costs down. At the same time, a space plan should also take into account the facility’s future capacity as well.

3. A Test Fit

With steps 1 and 2 completed, developers can then determine where the facility should be located along with its actual size. Certain questions need to be addressed such as, will the facility be freestanding or attached to another building? Also, how will the local community view a microhospital?

In order for a microhospital to succeed, locals should perceive it positively. In addition, many decisions about the operations and functioning of the facility are dictated by existing codes and guidelines.

4. Moving Forward

Once the first three steps are completed, a developer will then know whether the community or area is a good fit for a microhospital. If the facility fits the community, the project can move forward.

Following the Steps to Move Forward with Investing in Medical Real Estate

Following this 4-step process allows developers, investors, or commercial real estate brokers to gauge a microhospital’s viability in a certain area. The first three steps must be followed consecutively before moving forward with the project.

Throughout the process, costs must be at the forefront of the discussion to be sure the project remains within the budget. If the project passes the first three steps and moves to the development stage, the community will then benefit from high-quality hospital care without needing to visit a full-size hospital.

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