When mortally / severely wounded, Townsfolk will automatically visit the hospital to slowly heal back to Healthy status. If there is a bed in the hospital, the injured Townsfolk will use it and they will heal back to healthy much sooner.
The Hospital requires at least a 3x3 tiled zone. Beds and Medicine Cabinets can be added to increase healing speed. Having the Hospital above-ground and surrounded by walls may further augment the speed.