To the average person, it might seem logical for any commercial venture to consider a 100% occupancy rate the most profitable.
We all know that airlines often overbook their flights so that every seat is full. And sports venues and concert arenas are typically delighted to have a sold out event.
Believe it not, 100% occupancy isn’t necessarily the most profitable. Every industry is different, but for hospitals, it is not more profitable to have every bed full. Let’s take a closer look at why this is true.
What is the Ideal Hospital Occupancy Rate: How Beds Increase Profit
The size and amount of hospital beds in your hospital can actually determine your profitability among other factors to be considered. Keep reading to learn what the ideal rate is so that your hospital can rank at the top.
When Occupancy is Too Low or Too High
This should seem like a given, but when hospital bed occupancy is too low, you will have staff sitting around without any work to do, and this will cost you money.
On the other hand, if hospital bed occupancy is too high, the system won’t run as efficiently. Your staff will get overworked, often causing longer shifts, missed days off, and a lowering of morale.
Also, there is the potential for having to turn away patients, which can negatively impact the hospital’s reputation.
The Importance of the Time of Day
Hospitals generally base their occupancy rate on the number of beds occupied at midnight, often known as the “midnight census“.
But the midnight census is not terribly accurate as a marker for the number of beds occupied over a 24-hour period. This is because midnight is the time when the fewest number of patients actually occupy beds.
The Day of the Week
The day of the week also impacts the occupancy rate. Monday through Friday is the window of time during which elective surgeries occur, thus the number of post-op patients drops significantly during the weekend. Because of this, peak occupancy typically tends to occur on Wednesday.
Location in the Hospital
The final variable for determining hospital bed occupancy is the location of each bed within the hospital. The status of departments like ICU and the ER can have a dramatic impact on the rest of the hospital.
When occupancy is too high in any given area, this taxes the nursing staff and other resources, and the quality of care can decline in all areas.
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The Occupancy Sweet Spot
So, what is the ideal occupancy rate? It depends.
If you have a midnight census rate of 85%, this gives you a 15% buffer. Though on Thursdays and Fridays, a midnight census of 80% would probably be preferable. On the weekends, 75% is better because surgical floors are lighter and thus nursing staff can be reduced.
Managing hospital occupancy rate is no simple matter. While everyone wants to maximize profits, this does not always translate to more patients in beds. It requires a delicate balance of staff, resources, and patient care.
The inpatient bed occupancy rate has a huge impact on a hospital’s profits, and the better you’re able to manage the many variables to keep the midnight census higher enough but not too high, the better your bottom line will look.
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