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Basically, a medical play doll is a basic doll form with no face or hair or clothes or decoration or anything. [...] Her hospital needs more dolls in various shades of brown for therapy where the child decorates the doll to look like themselves (which is why you wouldn't decorate it), and then whenever the child needs to have a procedure done the Rec Therapist and the child act out the procedure on the doll first so the kid knows what to expect.
This can be knitted, crocheted or sewn.
Full details at lizcommotion's journal here.