Here’s how micro-hospitals are shaking up the healthcare industry


The rural town of Cave Creek, located about 10 miles north of Phoenix, has long attracted motorcycle enthusiasts, true cowboys, and people who love to live off the dirt. But this difficult lifestyle comes with dangers, and until recently, when residents suffered fractures, snakebites, or other serious injuries, they had to be transported to Scottsdale or Phoenix for treatment.

In July, Cave Creek welcomed its first full-service medical facility – and, while the city prides itself on its yesteryear appeal, entered a new era of healthcare: the rise of the micro-hospital.

According to a report by the Sol Price School of Public Policy at the University of Southern California, micro-hospitals are small-scale inpatient facilities, typically between 20,000 and 50,000 square feet and with three to 25 beds. , in small communities.


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“A micro-hospital is what we like to call a neighborhood hospital,” says Naman Mahajan, CEO of Abrazo Scottsdale Campus and its new Cave Creek facility, Abrazo Cave Creek Hospital. “It has an emergency department, an operating room and hospital beds. It is licensed as a full service hospital, but on a smaller scale. Typically, it partners with a larger, full-service acute care hospital.

Abrazo Cave Creek Hospital offers eight inpatient beds, a 13-bed emergency department, operating room, pharmacy, laboratory, and a full range of imaging services. “Just about anything you would go to an acute care hospital for, we offer at our Cave Creek location,” says Mahajan. “If a patient needs a more advanced level of care, such as stroke or cardiac catheterization, we can medically stabilize them in their community and transport them safely to one of our larger ones. suburban hospitals for specialized treatment. “

Community growth

Micro hospitals are a recent addition to the Greater Phoenix. The first installation of this type in the region, Dignity Health Arizona General Hospital opened in Laveen in 2015. Part of the Southwestern Dignity Health System, the 39,000 square foot hospital has 16 inpatient beds and 10 emergency beds, two operating rooms and much more.

Phoenix ER & Medical Hospital, debuted in Chandler in March 2019. The state-of-the-art 14,000 square foot independent facility (developed by Texas-based Nutex Health is not part of any Valley Health System) offers three private inpatient rooms and one full-service emergency department.

Abrazo quickly followed up with his first micro-hospital in Mesa in October 2019, and he opened the Abrazo Surprise hospital a year later, in October 2020.

“Micro-hospitals are often part of larger health systems, but not always,” notes Jane Hanson, president and CEO of Dignity Health Arizona General Hospital. “Either way, the main thing about them is that they can quickly get up in underserved rural areas that need health services.

In addition to the shorter construction times, the financial investment required to develop a micro-hospital is much smaller than what is required to build a large-scale facility. “It takes a lot of time and a lot of money for health systems to open hospitals with 400, 500, 600 beds. It’s a big test, ”says Hanson.

Many health systems are adopting what Hanson calls the “modular construction” of micro-hospitals. “You start with an emergency department with maybe eight beds attached to it,” she explains. “But you are building the facility with the ability to add operating rooms, additional floors, or more inpatient beds as the needs of the community increase.”

Mahajan notes that the three micro-hospitals in Abrazo are similar in size and functioning. “It’s intentional,” he says. “Our model starts with a good footprint, but it gives us the opportunity, in each of our facilities, to grow as the community grows, whether on the emergency side or on the patient side, or even adding a professional or medical office building. “

Trisha Talbot, senior manager of Doc Properties, a real estate consultancy specializing in healthcare facilities, notes that most micro-hospitals, independent and owned by the system, own the land on which they are built, as well as the structure. real. himself.

“It doesn’t make economic sense for a micro-hospital to rent space. The cost of just leasehold improvements to meet such specialized requirements would be too high, ”she said. “Depending on the size of the hospital, they want about 3-5 acres to build on, and it works here because we have such an urban sprawl.”

Lighten the burden

In the first few months since it opened, Abrazo Cave Creek Hospital has treated more than 2,500 patient cases. Of these, 90% would have had to go to one of the largest urban establishments if the micro-hospital had not been available.

“We are already struggling to cope with the number of people entering our acute care hospitals due to the COVID-19 pandemic,” Mahajan said. “If patients can stay in their communities and receive emergency and hospital care, it allows our larger facilities to focus on patients in their own communities, and it eases the burden on our emergency rooms.” already taxed. “

Talbot agrees. “In general, hospitals need to focus on trauma and acute care,” she says. “Micro-hospitals pride themselves on providing help quickly and being transparent in their prices. If a patient does not need specialized treatment, it makes sense for the health care system and the patient to have a cheaper option of care.

As the Greater Phoenix continues to grow in size and population, the development of micro-hospitals will continue. Nutex is hinting at a new facility to be announced later this year, and Abrazo and Dignity Health continue to seek future opportunities as our borders expand further west and north.

“Micro hospitals are demand driven and mission critical,” says Talbot. “This is one facet of the commercial real estate industry that will remain strong. ”


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