The rapid integration of metaverse technology into healthcare is transforming medical services by establishing digital hospitals, enhancing telemedicine, and introducing immersive virtual reality-driven treatments. By incorporating unconventional technologies like VR, AR, AI, and Blockchain, digital hospitals reshape patient care delivery, medical training, and healthcare accessibility. From remote consultations to AI-assisted surgeries and blockchain secured medical records, the metaverse is enabling a paradigm shift in how healthcare professionals interact with patients, manage data, and deliver services in a virtual environment. This paper explores the vast opportunities digital hospitals present, including improved healthcare accessibility, cost-effective solutions, enhanced medical training, and AI-powered precision diagnostics. Furthermore, it critically examines the security and ethical challenges related with metaverse driven healthcare, such as patient data privacy, cybersecurity risks, digital inequality, and the AI ethics implications in medical decision-making. As digital hospitals become an integral part of the healthcare landscape, it has been crucial to evolve regulatory frameworks, ethical guidelines & technological safeguards to ensure their responsible and inclusive deployment. By analyzing real-world case studies and emerging technologies, this re-search provides an extensive summation about how the metaverse can be effectively harnessed to improve healthcare outcomes while addressing ethical dilemmas and security concerns.