Just when you think we couldn’t have another level in the health care continuum, a new one pops up. This time – the micro-hospital.
What is a micro-hospital? In general, micro-hospitals are licensed facilities that offer emergency medical care, inpatient care, surgery, laboratory, and radiology services, but at a much smaller scale than a larger hospital (see ‘Micro-hospitals’ offer alternative to urgent care model and Sometimes Tiny Is Just The Right Size: ‘Microhospitals’ Filling Some ER Needs). According to Becker’s Hospital Review’s Heather Punke:
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 (see The rise of the ‘microhospital’: 7 things to know).
In her blog post, Health Systems Find Large Opportunity in Microhospitals, Lisa DiSanto further defined the concept:
Microhospitals are fully licensed, semi-acute facilities that co-locate inpatient and/or outpatient observation beds and other ambulatory services, including emergency services. They are considered “micro” because they do not provide the full complement of acute inpatient services, however the care provided is more substantial than that of outpatient or emergency care. While microhospitals can accommodate an overnight stay, they were developed to rapidly assess and treat lower-acuity conditions in a more efficient, cost-effective setting.
While less expensive than a full-scale operation, the facilities aren’t “cheap,” costing between $7 million and $30 million (see To grow your hospital, think micro). And even though they offer more services than your standard urgent care center, they don’t offer the wider variety of services for a wider range of conditions necessary to fill the market niche as “all inclusive.”
I must have been sleeping the past couple years because recent coverage of the micro-hospital has been the first I’ve heard of the concept. But, a little investigation reveals a lot of activity – with both recently opened hospitals and plans for future facilities in 2016. Emerus Holdings Inc., which styles itself as “the nation’s first and largest operator of micro-hospitals,” announced in April that they have 16 facilities in operation, 20 more under development, and have surpassed 500,000 consumers served (see Nation’s first and largest operator of micro-hospitals surpasses 500,000 patients treated milestone). A recent example of Emerus’ work includes a partnership with SCL Health, a non-profit health care organization opening four micro-hospital locations in Colorado (see SCL Health Tries Out Microhospitals).
I think the big question for micro-hospitals (and any addition to the care continuum) is, what does the value equation look like? (For more on value equations in marketing, see The (Inescapable) New Value Equation In Health & Human Services: Why It Will Determine Who Succeeds and The Business Model Transition To Value-Based Care.) Does the new level of care – in this case the micro-hospital – reduce consumer health expenditures while improving their health status?
The rationale is straight forward. Micro-hospitals are more efficient than full-service hospitals and can provide “a consumer-friendly access point” to acute care. And, micro-hospitals are being positioned as a lower-cost solution to geographic gaps in acute care cover. “Micro-hospitals are an effective way to serve new markets where there is an existing gap in services, or lack of convenient access to a traditional hospital….locating the micro-hospital within 18 to 20 miles of a full service hospital is a good rule of thumb” (see Micro-hospitals Emerge as an Alternative Delivery Model).
But other emerging levels of care such as urgent care centers and retail clinics, while gaining in market share, are under new scrutiny from payers who have found that the added level of care hasn’t decreased consumer costs (see Urgent care costs raise lots of questions for healthcare consumers).
So one more model of service delivery to consider in your service line planning – along with urgent care sites, embedded retail clinics, freestanding emergency departments (ED), mobile crisis response, living-room programs, specialty behavioral health EDs, crisis stabilization programs, hospital readmission prevention programs…and the list goes on. Whether micro-hospitals are a novel idea that will soon fade from health care systems – or a new model to maximize value remains to be seen. For more on the many emerging models of care, check out these resources from the OPEN MINDS Industry Library:
For more on the many emerging models of care, check out these resources from the OPEN MINDS Industry Library:
- Community-Based Providers In A Value-Based World
- Mental Health Crisis Center Set To Open In March In Hillsboro
- Banner Health Acquires 32 Urgent-Care Facilities In Phoenix, Tucson
- Driven To Diversion: The Future of Juvenile Justice
- UnitedHealth’s Optum Unit Makes Big Push Into Urgent Care In Minnesota
- Reinventing Primary Care – A Challenge For All Health Care Executives
- UnitedHealth Affiliate, Harken Health, Launches Health Plans With A New Primary Care Concept
- Dallas Children’s Health Announces Partnership With Urgent Care Startup Mend
- UPMC & SmartStory Technologies Create Mobile Videos To Educate Patients Nationally Through Pharmacies
- Cleveland Clinic To Work With CVS On MinuteClinic Telemedicine Services For Ohio
For more, join me on February 16, 2017 at The OPEN MINDS Performance Management Institute for the session, “The Challenges & Rewards Of Primary Care Service Lines: The Meridian Case Study”, featuring Hank A. Milius, President and Chief Executive Officer, and Kirk Shafer, CPA, Chief Financial Officer, Meridian Health Services.