Hospital Intelligence Brief
How to Investigate Underutilized Hospital Equipment
Expensive equipment that sits idle ties up capital, space and staff. Finding out why comes before deciding what to do about it.
Short answer
To investigate underutilized hospital equipment, measure actual use against available time, find the cause of idle capacity (scheduling, referral volume, staffing, downtime or access), and compare the cost of keeping the equipment with options to redeploy, share or retire it. Slot occupancy, a standard scheduling measure, is a good starting metric.[1]
Why does equipment utilization matter?
Equipment is often the most visible capital a hospital owns: scanners, operating room systems, lab analyzers, endoscopy towers. It carries purchase or lease cost, service contracts, space and trained staff. When it sits idle for a large share of its available time, those costs are spread over fewer procedures, which raises the cost of each one. Conversely, equipment that is overused may cause delays, overtime and lost patients.
Utilization also matters in the context of constrained capital. The American Hospital Association reports that the average age of plant, a measure of how old hospital infrastructure is, rose by more than 10 percent over two years, according to industry benchmark data, suggesting that many hospitals are delaying reinvestment.[3] When capital is tight, a hospital needs to know which assets are earning their keep and which are not.
How should utilization be measured?
Start with a clear definition. Utilization is use divided by available capacity, but “available” can be 24 hours a day, a staffed shift or scheduled slots. The Healthcare Financial Management Association’s MAP Keys offer a model: percentage of patient schedule occupied is the number of patient slots occupied divided by the number of slots available, where slots are consistent in size and defined by the user and slots blocked for non-patient activities are excluded.[1] Applying the same logic to equipment gives a fair measure of how much of the usable time is used.
Break the measure down by hour, day and week to find patterns. An MRI scanner that is full on weekday mornings and empty on weekends tells a different story from one that is half-full all day. Also measure no-shows and cancellations, and the time between cases.
Compare with context. MedPAC reported that hospitals’ inpatient occupancy averaged about 71 percent in FY 2024, with 5 percent of hospitals below 13 percent and another 5 percent above 90 percent.[2] That figure concerns beds, not equipment, but it shows how widely utilization varies across hospitals.
What causes low utilization?
Common causes include too few referrals, scheduling rules that leave gaps, staffing shortages that limit hours, long turnaround time between cases, equipment downtime, patient access barriers such as prior authorization, and competition from other sites. Each has a different remedy. If referrals are low, the answer is outreach, not scheduling. If staffing limits hours, the answer is recruitment or cross-training. If downtime is high, the answer is maintenance or replacement.
An invented example: a hospital’s second CT scanner runs 28 percent of available hours. Investigation shows that 60 percent of unused time is evenings and weekends when no technologist is scheduled, 25 percent is gaps between scheduled studies, and 15 percent is downtime. The remedy is a staffing and scheduling change, not a decision about the equipment itself.
What are the options once the cause is known?
Options include increasing volume through referral development or extended hours, redeploying the equipment to another site or service, sharing it with a partner, shifting volume to a single machine and retiring the other, or replacing it with a lower-cost option. For each, estimate the cost avoided or revenue gained, one-time costs and risks.
Include the clinical dimension. Some equipment is justified by access and safety even at low utilization, for example backup capacity for critical services. Document that reasoning so that the analysis does not recommend removing something the hospital needs.
What should leaders watch for?
Beware of measuring only the busy periods or only averages. Beware of treating the lowest-utilization asset as the one to remove without testing causes. And beware of waiting too long: equipment with low utilization and high service contract cost can drain money quietly for years. Review utilization quarterly for the major assets and set thresholds that trigger a review.
The interactive example below uses invented figures to show how utilization and fixed cost per procedure interact.
Frequently asked questions
How do you measure equipment utilization?
Divide actual use by available capacity, defining available time carefully, for example scheduled slots excluding blocked non-patient time as in HFMA’s MAP Key PA-1.[1]
What is a good utilization rate for hospital equipment?
There is no universal standard; it depends on equipment type, staffing and purpose. Compare with your own history and peers.
What causes low equipment utilization?
Low referrals, scheduling gaps, staffing limits, long turnaround, downtime and access barriers.
Is hospital capacity usually full?
No. MedPAC found average occupancy of about 71 percent in FY 2024, with wide variation.[2]
Should underused equipment always be sold?
No. Some equipment supports access or safety. Investigate the cause and compare redeploying, sharing or retiring it.
What to do next
- Choose the five most expensive assets and define available capacity for each.
- Measure use by hour and day, plus no-shows and downtime.
- Identify the main cause of idle time.
- Model redeploy, share, grow or retire options.
Optional · interactive example
See it in an interactive example.
Service-Line Decision Lab: a service-line dashboard with capacity use, decision paths, a scenario simulator, evidence-linked answers from APIS, and a sample executive brief, all on synthetic data.
The experience below is built on a synthetic hospital, “Demo Regional Medical Center,” with six service lines and two fiscal years of data. Nothing in it is real, so you can explore freely.
- Select General Surgery and Obstetrics in the service-line table. Compare their capacity use trend with their volume change.
- Open the “Improve” decision path for a line. What data would it need?
- Ask APIS what additional information is needed before deciding on any line.
Explore Your Hospital’s Opportunities
Two Pillars can help hospital leadership investigate market, financial, operational and strategic questions using relevant organizational data, public information and a structured assessment process. A good first step is a service-line review that compares demand, capacity and contribution for the lines you are considering growing, restructuring or closing.
Sources
- Healthcare Financial Management Association, MAP Keys: Industry-standard revenue cycle KPIs. Accessed October 2026.
- Medicare Payment Advisory Commission (MedPAC), Report to the Congress, March 2026, Chapter 3: Hospital inpatient and outpatient services. Accessed October 2026.
- American Hospital Association, The Cost of Caring: Challenges Facing America’s Hospitals in 2025. Accessed October 2026.
Sources checked October 2026. This guide is general information for healthcare leaders and is not legal, financial, clinical or compliance advice. Figures and rules are cited to the sources below and may have changed since they were accessed, so confirm anything you rely on against the current source. Two Pillars & Co is independent of the organizations cited. See our editorial policy.