More microhospitals are popping up nationwide as health systems try to increase access to care without pouring money into large-scale projects.
Hospital operators have touted the model as cheaper to build and requiring less capital to operate than a traditional hospital, while still providing critical services to patients in areas with care gaps. Services can also be customized based on what a market needs, operators say.
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"It doesn’t require us to build out all the modalities that you would need in a full-scale level 1 trauma center," said Keith Noll, senior vice president of corporate shared services at WellSpan Health.
Here's a look at which systems are investing in microhospitals and why the model made sense for them.
What is a microhospital?
A microhospital is a fully licensed, small-scale hospital that operates 24/7 and typically houses eight to 15 inpatient beds, in addition to emergency bays. There is no standard size for microhospitals, but they tend to be less than 50,000 square feet.
What types of services do microhospitals provide?
Microhospitals, also called neighborhood hospitals, can provide acute care, emergency services, surgeries, imaging and lab work to treat less complex conditions, such as broken bones or heart attacks. Higher-acuity trauma patients would be sent to a larger facility.
Services at microhospitals fall between urgent care or ambulatory surgery centers and full-size traditional hospitals, said Joe Kight, head of healthcare for U.S. Bank’s institutional client group. The facilities are generally reimbursed for services at the same rate as a regular hospital.
Who is investing in microhospitals?
Many health systems, including Baylor Scott & White, Intermountain Health and CommonSpirit Health, have invested in microhospitals.
Health systems often partner with a third party to help build and manage the facilities. Emerus, for example, has joint venture agreements with various systems nationwide and helps operate more than 40 microhospitals. Nutex Health, which operates microhospitals and other facilities in 11 states, is another key player.
Are new microhospitals coming online soon?
Several health systems are planning to open microhospitals in the next year or two.
Wilmington, Delaware-based ChristianaCare is on track to open one microhospital this summer and two others across southeastern Pennsylvania in 2026 in partnership with Emerus. Each microhospital will coincide with a new health center offering related services such as primary care, behavioral health, women's health and other specialties, Chief Strategy Officer Jennifer Schwartz said.
York, Pennsylvania-based WellSpan Health, which is also partnering with Emerus, plans to open three microhospitals in southern Pennsylvania in early 2026.
“We are not afraid to partner with organizations that might do something in a different way than we do,” WellSpan's Noll said.
An Emerus spokesperson said the company has more than 20 projects coming online over the next three years with systems including CommonSpirit's Dignity Health and Baptist Health System. Nutex also has several projects in development, though a spokesperson did not say how many were specifically microhospitals.
Where do microhospitals make sense?
Microhospitals could work in urban, suburban and rural areas, depending on market dynamics. They are typically placed in markets that lack acute care services but do not have the patient population to support a full-size facility. Payer mix and nearby competitors are other factors to consider.
ChristianaCare developed its strategy based on care gaps throughout southeastern Pennsylvania, Schwartz said. The health system already had a small presence in the region, but saw an opportunity to provide more comprehensive care with emergency services and affiliated health centers, she said.
Highmark Health-owned Allegheny Health Network, another Emerus partner, opened four microhospitals in the Pittsburgh region in 2020 to supplement the larger hospitals already in its footprint. Allegheny Health opened medical office buildings in tandem with the microhospitals to consolidate services that were dispersed throughout the area, Chief Financial Officer Brian Devine said.
Devine said microhospitals also create opportunities to funnel patients to other facilities throughout Allegheny Health Network.
Why build microhospitals rather than other facilities?
Hospital operators say the smaller facilities are a way to expand access to care without the financial burden of supporting dozens of inpatient beds. The facilities are much cheaper to build, staff and operate, and patients’ length of stay tends to be lower.
“Building a large hospital infrastructure, at this point, we do not feel is what’s needed by that community,” ChristianaCare’s Schwartz said. “The cost structure around that just can’t be supported by our current system of reimbursement for healthcare.”
Schwartz estimated each of the system's microhospitals costs $10 million to $15 million.
Efficiency is another big selling point. Emerus, for example, typically opens multiple microhospitals around the same time in a market. David Hall, chief growth officer at Emerus, called it the cluster approach. He said the company can create economies of scale with overlapping leadership and staffing between the microhospitals.
Operators say the ramp-up to profitability varies depending on how quickly a patient base grows, and can range from several months to a few years.
