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RECENT coverage of the pressures, compounded by the COVID-19 pandemic and health care workforce shortages, on public hospitals and acute care delivery across Australia has emphasised how vulnerable the Australian acute care system really is (here, here).

As hospitals represent the face of the modern health care system, and cost the most in terms of health care spending, their problems get emphasised more than other parts of the health care system (here, here). In such times, when hospital overcrowding and pressures on the clinical staff come under significant scrutiny, an often-repeated demand from various stakeholders to deal with these issues is for more hospital beds (here, here, here).

Governments, in response, make announcements of the allocation of more beds or even new hospitals (here, here, here). However, are more hospital beds and hospitals the solution to the acute care crisis? Would the provision of more hospital beds lead to sustainable solutions and align the Australian health care system to the 21st century practice of medicine?

Perhaps not.

Hospitals and hospital beds

In Australia, hospitals are a critical component of the health care system and are the foundation for the acute care system. Hospitals deliver both admitted and non-admitted services through both public and private hospitals. Even though public hospitals are owned and managed by state and territory governments, with partial funding from the Australian Government, private hospitals are owned and managed by private organisations and subsidised by the private health insurance model.

In 2020–21, there were 697 public hospitals in Australia, and as per the most recent data (2016–17), there were 657 private hospitals in Australia. In 2019–20, the recurrent expenditure on public hospitals was $66.4 billion, with state and territory governments and the Australian Government contributing to the funding (here, here). The expenditure continues to increase with spending per person, increasing by an average of 1.1% per year between 2014–15 and 2019–20.

In recent times, state and territory governments have lobbied the Australian Government to increase its share of funding, as demand for acute care, workforce costs, and pressures on public hospitals spiral.

The often-repeated demand in the call for funding is for extra hospital beds in public hospitals to meet growing acute care demand from the community.

So, what are these hospital beds? Are they mere furniture?

The Australian Institute of Health and Welfare defines an available hospital bed as “a suitably located and equipped bed chair, trolley or cot where the necessary financial and human resources are provided for admitted patient care”. There are alternative terms to “available beds”, including “active beds” and “base beds”, among others.

The number of available hospital beds per 1000 people in Australia in 2016 was 3.8. This represents a steep decrease from the year 2000 when there were 76.9 beds per 1000 people.

Although this decrease may seem alarming, this trend mirrors a decline in bed availability in almost all the developed countries. Health technology, changing models of inpatient care, and enhanced community-based services have all played a role in decreasing available beds. The trend in the face of renewed calls for more hospital beds is disconcerting but is there a cause for concern? Do we need more hospitals and hospital beds?

Less is more

Hospital overcrowding and the perception that this is caused by an inadequate number of inpatient beds often lead to demand for more inpatient beds by the community and clinicians (here, here, here). However, the reality of establishing a bed is complex, with the requirement to consider the workforce necessary to support the care associated with the bed (here, here, here). Further, the number of beds in a hospital is not a measure of success but merely an indicator of capacity. Even though adding beds increases the hospital’s capacity to service demand, it also adds to the ongoing expenditure.

In an environment of fiscal constraints, it is pertinent to consider if the costs of hosting a bed are sustainable and if the diversion of costs to the acute care system will lead to a shortfall in funding for other parts of the health care system.

No wonder the international trend in developed countries has seen a decrease in the overall number of hospital beds.

Evolving models of care and health technologies such as telehealth and virtual health care have led to the shift of aspects of hospital care to the community reducing the requirement of patients to stay longer than necessary in hospitals.

The COVID-19 pandemic has acutely taught us that health care systems are comprised of many interconnected points of care and that hospitals do not function in isolation. Therefore, a unidimensional approach of increasing hospital beds or building new hospitals to alleviate health care demand from the community is an inefficient and unsustainable approach (here, here, here). A multipronged approach with initiatives within and outside the hospitals is required to improve capacity to meet the increasing health care demand from the community.

Undoubtedly, one of the main contributors to emergency department overcrowding and access block is inadequate capacity within the hospital to admit patients. However, the first order solution is not always the increase in the number of hospital beds. It would be reviewing operational processes internal to the hospital, such as discharge processes (here, here).

By streamlining and expediting inpatient discharge, considerable capacity can be added to the hospital. Generally, far fewer patients are discharged on weekends, and many patients do not need to be cared for within the hospital. By reviewing these factors and discharging patients who can be cared for at home or in a subacute or community setting, bed space can be added to the hospital. Also, unused specialised beds can be converted for general or multipurpose use, adding further to the hospital’s capacity. Further, same-day discharge policies can be adapted for specific surgical procedures.

There is compelling evidence that well monitored, at-home care can be safer and more effective for eligible patients, including those at risk of hospital-acquired infections. Outside the hospital, programs such as “Hospital in the Home” (HITH), which enable patients to receive hospital-level care in their home or similar settings, have helped take pressure off hospitals and free up much-needed bed space. In Victoria, 49 HITH sites and approximately 6% of all bed days are provided through this program. Recent research has indicated that HITH patients were less likely to be readmitted and have lower mortality figures than inpatients. HITH care can be extended to many clinical areas.

From a more extensive policy context, the demand for hospital beds can be reduced by enhancing the population’s health. This can be achieved in the short term by preventing admissions and facilitating early discharge (here, here). Inappropriate emergency admissions can be avoided through medical observation units to direct patients to more appropriate settings, and non-urgent admissions can be prevented by shifting diagnoses from inpatient to outpatient settings. To enable early discharge, alternatives to hospital care, including nursing homes and subacute care, must be expanded.

In the longer term, upstream investments in preventive health programs will reduce the population’s disease burden and consequently demand acute care. Furthermore, the more effective management of many patients with chronic and complex diseases in primary care, assisted by a revised funding model to proactively manage care, will help significantly dampen demand for more hospital beds.


Reducing demand on hospitals and finding solutions to the current pressures on the acute care system is, admittedly, a complex process. However, to alleviate the pressure on hospitals, falling back on unsustainable and inefficient options, such as adding hospital beds, needs to be questioned.

With programs such as HITH and emerging health technologies, some aspects of currently delivered acute care can be delivered outside hospitals. Also, better managing demand and streamlining discharge processes ensuring efficient use of hospital space can increase hospital capacity without recourse to additional hospital beds. Therefore, these measures must be deliberated carefully before adding more beds to the acute care system.

Associate Professor Sandeep Reddy is the Director of the MBA (Healthcare Management) program at Deakin University. In addition to a medical degree, he has qualifications in medical informatics, management, and public health. He has managed various health service projects and formulated high level policy in Australia, New Zealand, and Europe.

Professor Grant Phelps is a gastroenterologist and acute physician in public and private practice in regional Victoria. He is a Professor with Deakin’s Medical School where he has taught into the MBA program. He is President and Chair of Hepatitis Australia.

Affiliate Associate Professor John Rasa is Unit Chair Healthcare Financing in the Faculty of Health at Deakin University.



The statements or opinions expressed in this article reflect the views of the authors and do not necessarily represent the official policy of the AMA, the MJA or InSight+ unless so stated.

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