Following implementation of Taiwan's National Health Insurance (NHI) some hospitals have reported a shortage of acute beds as a result of long hospital stays by some patients. To study this situation, we analyzed inpatient data (n=930,751) in acute hospitals covered by NHI from July December, 1995. Overstay was defined as a hospital stay of over 30 days. The overstay rate was 4.0%. The days of care taken by overstay patients accounted for 24.4% of all days of care in the hospital. Thus, if overstay co uld be prevented, NHI could conserve 10.1% of total hospital beds and 13.1% of inpatient expenditures. Overstay has different effects in public and private hospitals; the overstay rate in public hospitals exceeded that in private hospitals (7.5% vs. 2.7%). The days of care for overstay patients in public and private hospitals were 35.1% and 18.2% of all days of care, respectively. Differences were also found by rating level of accredited hospitals those with higher ratings had higher overstay rates. Ove rstay in medical centers also differed by the nature of the center; the overstay rate for public and private medical centers was 8.9% and 5.6%, respectively. For days of care for overstay patients, again, public outweighs private at 39.6% vs. 27.9% of all days of care. Although the occupancy rate of acute beds for patients in internal medicine is significantly lower than rehabilitation medicine (10.4% vs. 32.9%), the number of occupied acute beds is higher because there are more patients in internal medic ine. We recommend that in order to effectuate discharge planning, the government and hospitals develop a long term care delivery system and raise inpatient co-payments.