Low numbers of hospital-based psychiatric beds create problems for people with severe mental illness (SMI), when they face extended emergency department (ED) waits, higher thresholds for admission to an acute bed, and short revolving-door stays with high rates of rehospitalisation. Limited access to inpatient treatment has been associated with higher suicide risk, premature mortality, homelessness, violent crime and incarceration. Ultimately, people with SMI can be transinstitutionalised to the criminal justice system. In the USA, for example, prisons have replaced mental hospitals as the largest institutions housing people with SMI. There is no international consensus on the safe minimum numbers of acute, forensic and rehabilitation beds needed to reduce these risks. As a consequence, Organisation for Economic Cooperation and Development (OECD) countries have wide variations in the mix of hospital beds with an average of 71 beds per 100 000 population. Policymakers face difficult choices with few studies to guide decisions on supplying beds. The UK Royal College of Psychiatrists offered a policy framework, which was adapted for Australia. The government of the State of South Australia increased the supplies of crisis, acute and forensic beds to meet a mandatory target to safely reduce mental health boarding in the EDs.