When Hospital Capacity Becomes a Constraint:
The Economics of Operational Flexibility
October 2026
High hospital utilization is not always a sign of efficiency.
Some reserve capacity may have economic value because it preserves
operational flexibility, reduces congestion, and protects timely access
when demand fluctuates.
The Question
When does high utilization stop representing efficiency and begin
to reduce a hospital’s ability to respond?
The Economic Perspective
Operational flexibility can create option value by allowing hospitals
to respond to uncertainty when demand and pressure increase.
The Decision Lens
What level and configuration of capacity minimizes the combined cost
of resources, waiting, congestion, disruption, and lost responsiveness?
Read the Research Insight
https://ichepi.org/wp-content/uploads/2026/10/ichepi_research_insights_ri-2026-01-2.pdf
Suggested citation:
ICHEPI. When Hospital Capacity Becomes a Constraint:
The Economics of Operational Flexibility.
ICHEPI Research Insights. RI-2026-01. October 2026.
ICHEPI
Interdisciplinary Center for Healthcare Economics, Policy and Innovation
Better Evidence. Better Decisions. Better Health Systems.
