Microhospitals Can Fill Gaps In Pennsylvania's Healthcare Systems, But Zoning Officials Have Questions

Crozer Health’s ongoing financial struggles have left gaps in emergency care in parts of Delaware County, but an innovative new hospital model growing in the Lehigh Valley could present a path forward for providers — if local officials get on board.

Temple University Health System CEO Michael Young doesn’t have high hopes for Crozer’s future even though the network may have found a buyer in Michigan-based Insight Health Systems, which is known for purchasing struggling hospitals.

“You’re going to experience a tsunami when Crozer closes,” Young told Shelly Buck, president of Main Line Health’s Delco outpost, Riddle Hospital, during Bisnow’s State of Philadelphia Healthcare event Wednesday.

Amid that backdrop, the state of Delaware’s largest healthcare provider, ChristianaCare, is planning to expand into the county with two new microhospitals. The first is slated to open in Aston sometime in the first half of 2026. ChristianaCare is building out a similar facility at the former Jennersville Hospital in Chester County.

Lehigh Valley Health Network, which recently merged with Jefferson Health, has already opened two 10-bed microhospitals and has plans for three more.

These smaller-footprint medical centers let hospital systems expand access for underserved communities in a cost-effective manner, LVHN Vice President of Real Estate Dallas Pulliam said.

“In the rural market in the Lehigh Valley, we’ve become a little more flexible with our delivery care model,” he said at the event, held at Crystal Tea Room in The Wanamaker Building. “These microhospitals are only about 22K SF. We can fit a microhospital on about 5 acres of land, which gives us flexibility with where they go in the market.”

He told Bisnow the microhospitals are meant to “decompress” the health system’s larger facilities and “cut down travel time” for distant patients.

Because these facilities are such a new concept, Pulliam said LVHN has faced some setbacks with municipal governments.

“There is no microhospital zoning,” he said. “It does press our time a little bit. ... They need to understand what it is that we’re going to be building.”

The situation came to a head in one Lehigh Valley municipality after LVHN began anonymously consolidating land for a microhospital.

“You put together five parcels. If the first three parcels know it’s a hospital, the last two parcel prices just went up 50%,” Pulliam said, explaining why the health system wanted to remain anonymous.

The smaller-footprint medical centers cost between $20M and $30M to build, Pulliam said. Budgets for full hospital build-outs in Pennsylvania can easily run over $1B in some cases.

The two existing LVHN microhospitals are in Macungie, a southwestern suburb of Allentown, and Gilbertsville, a rural locale about 15 miles south of there.

The system also plans to open microhospitals in rural Bartonsville, another Allentown suburb called Hellertown and an undisclosed location in the Lehigh Valley.

“There’s a fifth one where we’re still making sure the township is good with it,” Pulliam said.

When LVHN approached local officials, they weren’t receptive.

“Their response was, ‘What’s a microhospital? I don’t think we’re going to approve it,’” Pulliam said.

Connecting with officials earlier on may have prevented this hiccup, he said, adding that “the more they’re in the loop, the more they can kind of walk hand in hand with you.”