I have a lady that goes to my sewing group on tuesdays that makes blankets for NICU in a hospital down in San Diego and works on them all year long and then in the springtime, her and her husband load up their fifth wheel and hand deliver them. This past year they delivered I believe she said 130.
She cuts polar fleece into 30" X 30" pieces and hand sews coordinating cotton binding onto them. This last bunch she made, her sister used a machine and embroidered little animals on one corner such as bunnies, teddy bears, ducklings etc.
This bunch that she is making now is also done with polar fleece and she is crocheting binding on to them. And OH MY GOSH are these ones adorable.
But I would contact the hospital and see if they want them a certain size. The ones my friend does, are used to cover the incubators and isolettes and then eventually when the baby goes home, so does the blanket. :))