Dazed state outside hospital block (7)
I believe the answer is:
tranche
'block' is the definition.
(I've seen this before)
'dazed state outside hospital' is the wordplay.
'dazed state' becomes 'trance' (I've seen this before).
'outside' means one lot of letters goes inside another.
'hospital' becomes 'H' (abbreviation for hospital).
'trance' enclosing 'h' is 'TRANCHE'.
(Other definitions for tranche that I've seen before include "shares in single issue" , "Chanter gives up portion of income" , "Portion of something, money perhaps" , "instalment of shares" , "A portion of something (especially money)" .)