I think it was a nightmare. I assume we are seeing Michael wake up for the first time in the hospital. If he hadn't seen the hospital before (because he was unconscious) then his dream would be of the hospital he had been in previously (when he was hit by a car). Or, because it's a dream - his subconscious could put him in any hospital it feels like putting him in. Just my opinion.

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...embrace the senile genius...
watch him reinvent the wheel...