Hospital beds are lagging behind healthcare needs, study finds

Hospitals are getting more crowded and healthcare experts are warning that has serious consequences for the quality of patient care. 

A new study published in JAMA Network projects that by 2032, national hospital occupancy rates could exceed 85%, a critical level where hospital operations may become unsafe and dysfunctional. 

This projection highlights a growing concern about the inadequate supply of hospital care to meet future demand. Although this national figure masks significant geographic and temporal variations, many areas are already experiencing a public health crisis due to hospital capacity constraints.

Historically, hospital care has been a significant portion of healthcare spending, accounting for 29% of the estimated $1 trillion spent annually in the U.S. From 1960 to 1982, spending on hospital-based care surged due to increased health insurance coverage, reduced cost-sharing, and technological advancements. 

In response, Medicare introduced the Inpatient Prospective Payment System in 1983, which aimed to control costs by reimbursing hospitals based on diagnoses and patient factors, rather than retrospective cost-based methods.

Policymakers also implemented certificate of need (CON) laws to regulate the number of acute care beds, aiming to curb unnecessary hospital spending. Despite their widespread adoption, these laws have faced criticism for being ineffective and even harmful. Efforts to optimize hospital bed productivity through lean healthcare principles and just-in-time resources have inadvertently contributed to hospital consolidation and reduced acute care capacity, the study authors say.

Pressing need for more hospital beds

As the demand for acute care continues to grow, driven by an aging and more medically complex population, the need for greater hospital bed capacity becomes more pressing. Technological advancements have improved survival rates for serious conditions, but they have also increased the demand for hospital care. 

While some policymakers have explored alternatives like hospital-at-home programs and ambulatory care, the study said these solutions have not fully addressed the challenges of inadequate hospital capacity.

The study concludes the U.S. must expand hospital bed capacity, particularly for critical and complex care services. However, the current healthcare financing environment favors the rapid expansion of urgent care centers and ambulatory care, while restricting similar growth in hospital capacity. 

This selective development is based on the assumption that lower-cost settings will improve affordability and access, but the study said evidence suggests that meaningful substitution does not occur.