This is a theoretical paper presenting the concept of Micro-hospitals for service delivery innovation in hospitals. Micro-Hospital is in news for the past few years; however, it lacks the empirical evidence with regard to their economic feasibility, patient satisfaction or the role of information communication technology. This research will take a holistic view on, what factors drive service delivery innovation in health services provided by Micro-hospitals and how developed and emerging nations are dealing with the health services issues and how ICT innovations act as an enabler for health services’ provision. This specific paper makes a case for Micro-hospitals as a service delivery innovation, strategy in an emerging country.