Previous studies of hospital utilization have not taken into account the use of acute care beds for subacute care. The authors determined the proportion of patients who required acute, subacute and nonacute care on admission and during their hospital stay in general hospitals in Ontario. From this analysis, areas were identified where the efficiency of care delivery might be improved. Ninety-eight of 189 acute care hospitals in Ontario, at 105 sites, participated in a review that used explicit criteria for rating acuity developed by Inter-Qual Inc., Marlborough, Mass. The records of 13,242 patients who were discharged over a 9-month period in 1995 after hospital care for 1 of 8 high-volume, high-variability diagnoses or procedures were randomly selected for review. Patients were categorized on the basis of the level of care (acute, subacute or nonacute) they required on admission and during subsequent days of hospital care. Of all admissions, 62.2% were acute, 19.7% subacute and 18.1% nonacute. The patients most likely to require acute care on admission were those with acute myocardial infarction (96.2% of 1826 patients) or cerebrovascular accident (84.0% of 1596 patients) and those admitted for elective surgery on the day of their procedure (73.4% of 3993 patients). However, 41.1% of patients awaiting hip or knee replacement were admitted the day before surgery so did not require acute care on admission. The proportion of patients who required acute care on admission and during the subsequent hospital stay declined with age; the proportion of patients needing nonacute care did not vary with age. After admission, acute care was needed on 27.5% of subsequent days, subacute care on 40.2% and nonacute care on 32.3%. The need for acute care on admission was a predictor of need for acute care during subsequent hospital stay among patients with medical conditions. The proportion of patients requiring subacute care during the subsequent hospital stay increased with age, decreased with the number of inpatient beds in each hospital and was highest among patients with congestive heart failure, chronic obstructive pulmonary disease and pneumonia. In 1995, inpatients requiring subacute care accounted for a substantial proportion of nonacute care days in Ontario's general hospitals. These findings suggest a need to evaluate the efficiencies that might be achieved by introducing a subacute category of care into the Canadian health care system. Generally, efforts are needed to reduce the proportion of admissions for nonacute care and of in-hospital days for other than acute care.