Toward a better understanding of hospital occupancy rates

This article starts out with the premise that a “uniform occupancy rate” for hospitals is not a meaningful concept because the ability of individual hospitals to maintain a certain occupancy rate consistent with a specified “protection level” depends upon several factors. These factors include hospital size, the number of nonsubstitutable patient facilities, the percent of nonurgent (elective) beds, the number of hospitals serving an area, and the relative variation (fluctuation) in the demand for services faced by the hospital. A regression analysis with observed, overall occupancy rate as the dependent variable, and measures that attempt to represent the factors just mentioned as independent variables, tends to substantiate this line of reasoning. However, inasmuch as the status of the independent variables (that is, whether or not they can be regarded as justifiable or uncontrollable) depends largely on the circumstances of each case, the regression model cannot be used as a standard-setting tool. Nonetheless, it offers valuable guidelines for hospital management, planners, and regulators in such areas of decisionmaking as the location and size of hospitals, and acceptable occupancy standards.