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What are the benefits of building a hospital?
Quote from manual:
Although the medical science in Gondor has not developed much, hospitals improve the health of your city a little bit. This decreases the upkeep of the troops in that settlement and increases the growth of your population in that settlement slightly. The biggest effect though is that your Hero cures considerably faster if he is hurt. Having a hospital not too far from your frontlines will ensure your Hero is rushed there as soon as he is hurt.