Lots of Swiss here walk round university hospital (8)
I believe the answer is:
lausanne
'lots of swiss here' is the definition.
(Lausanne is a city in Switzerland)
'walk round university hospital' is the wordplay.
'walk' becomes 'lane' (both can mean a path).
'round' means one lot of letters goes inside another.
'university' becomes 'u' (abbreviation for university).
'hospital' becomes 'san' (short for sanatorium).
'u'+'san'='usan'
'lane' enclosing 'usan' is 'LAUSANNE'.
(Other definitions for lausanne that I've seen before include "French town" , "Swiss city on L. Geneva" , "City on Lake Geneva" , "European city" .)