The difference between issuing passports and building a large-scale hospital is that only in the latter case is a large amount of money risked. It would be tricky to find a source of funding for a hospital that may not be able to operate due to a dispute over health law applicability.

From the perspective of anyone considering funding such a hospital, better to just locate in a nearby country, such as the hospital mentioned in the article that is being built in the Cayman Islands.