Hospitals Facing High Occupancy, Could Experience Bed Shortage by 2032

February 21, 2025 ‐ HealthLeaders Media

By Jay Asser

Hospital occupancy rates may be trending in a dangerous direction as healthcare is tasked with caring for an aging population in the coming years.

The average US hospital occupancy rate is 11% higher after the pandemic and without changes to the hospitalization rate or staffed hospital bed supply, that figure could grow to the point hospitals experience a bed shortage, according to a study published in JAMA Network Open.

Researchers highlighted that the mean hospital occupancy jumped from 63.9% between 2009 and 2019 to 75.3% between May 2023 and April 2024. The rise in occupancy was mostly driven by a 16% decrease in the number of staffed hospital beds, resulting in a drop from the steady state of 802,000 beds between 2009 and 2019 to 674,000 between May 2023 and April 2024.

Unless staffed hospital bed supply increases by 10%, hospitalization rate reduces by 10%, or some combination of the two occurs, the study’s findings show that the national hospital occupancy could reach 85% as soon as 2032, with some states likely hitting that mark sooner. A national hospital occupancy of 85% would constitute a bed shortage.

As the American population gets older, more hospitalizations are expected to occur to care for adults with chronic and complex illnesses.

“I’ve been doing this for almost 40 years now and I’ve been hearing about how everybody’s going to be cared for at home and we don’t need hospital beds anymore, but I’ve got 100 people holding in my ED that tell me very differently about what their needs are and how they’re going to be cared for,” Amy Mansue, Inspira Health president and CEO, recently told HealthLeaders.

“We underestimate the level of complexity that comes from caring for people who have chronic illnesses, so while it seems like a simple pneumonia or a simple whatever, when you’ve got COPD and everything else added in that bucket, it requires a tremendous amount of care and people can’t do that on their own.”

How CEOs are strategizing

To deal with higher occupancy rates, hospital and health system leaders are utilizing M&A, particularly on the outpatient side.

By offering outpatient services, organizations can cut down on expenses, reach more patients in need of care, and free up hospital beds.

Kaufman Hall’s latest National Hospital Flash Report revealed that the increase in outpatient revenue per calendar day outpaced the rise in inpatient revenue per calendar day in 2024 versus 2023, 9% to 8%, respectively.

“Driving the cost down is very, very important and when you can treat a patient in an ambulatory setting or even through population health and public health, you can try and manage illness and well-being before it becomes an acute issue,” Ed Banos, University Health president and CEO, said in HealthLeaders’ The Winning Edge for Transforming Through M&A.

Outpatient investment alone, however, won’t solve the problem of hospitals not having enough beds. That’s why organizations are also looking at ways to expand their inpatient sites of care through expansion and integration.

“It was a little surprising for us as we were heavily for years pushing to the outpatient market as everybody’s talked about and now we’re finding that the aging population is starting to overwhelm people’s perspectives of how many beds are needed and we’re actually having to try to catch up on that,” Matthew Heywood, Aspirus Health president and CEO, said.

Jay Asser is the CEO editor for HealthLeaders.

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