Abstract
After many years of concern about excess hospital capacity, a growing perception exists that the capacity of some hospitals now seems constrained. This article explores the reasons behind this changing perception, looking at the longitudinal data and in-depth interviews for hospitals in four study sites monitored by the Community Tracking Study of the Center for Studying Health System Change. Notwithstanding the differences for individual hospitals, we observed that adjustments to the supply of hospital services tend to be slow and out of sync with changes in the demand for hospital services. Those hospitals reporting capacity problems are often teaching hospitals, located near previously closed facilities or in population growth areas. These findings suggest therefore that approaches to dealing with capacity problems might best focus on better matching individual hospitals' supply and demand adjustments.