The College has a well-equipped hospital with more than 200 beds, providing essential undergraduate and postgraduate training facilities. The hospital is supported by Central and State Government funds and Arya Vaidya Sala, Kottakkal.

Outpatient units are handled by experienced teaching faculties in various specialties. Medicines are provided free of cost during OP hours (8:00 AM – 1:00 PM). A casualty unit functions from 1:00 PM to 8:00 PM.

The hospital features General, Pay, and Deluxe wards for both male and female patients, along with dedicated wards for staff and students. It houses a Pathology Lab, X-ray Unit, Physiotherapy Unit, Minor OT, Pharmacy, and Hospital Canteen.

Every year, around 1 lakh patients visit the OPD, and about 2,500 inpatients are admitted and treated.

During the Navathi celebrations of Vaidyaratnam P.S. Varier Ayurveda College, the vision of a 500-bed hospital named “Dhanwanthari Bhawan” was conceptualized by Padma Bhushan Dr. P.K. Warrier.

Construction began in 2012–2013, and by 2017–2018, three floors and a cellar floor were completed. The first phase was inaugurated by the Hon’ble Chief Minister Sri. Pinarayi Vijayan on 5th May 2018, in a ceremony presided over by the Hon’ble Minister for Health and Social Justice, Smt. K.K. Shailaja Teacher.

The hospital currently functions partially on a no profit, no loss basis, with further developments underway.