Hospital bed occupancy rates in the English National Health Service have risen to levels considered clinically unsafe. This study assesses the association of increased bed occupancy with changes in the percentage of overnight patients discharged from hospital on a given day, and their subsequent 30-day readmission rate. Longitudinal panel data methods are used to analyse secondary care records (n = 4,193,590) for 136 non-specialist Trusts between April 2014 and February 2016. The average bed occupancy rate across the study period was 90.4%. A 1% increase in bed occupancy was associated with a 0.49% rise in the discharge rate, and a 0.011% increase in the 30-day readmission rate for discharged patients. These associations became more pronounced once bed occupancy exceeded 95%. When bed occupancy rates were high, hospitals discharged a greater proportion of their patients. Those were mostly younger and less clinically complex, suggesting that hospitals are successfully prioritising early discharge amongst least vulnerable patients. However, while increased bed occupancy was not associated with a substantial increase in overall 30-day readmission rates, the relationship was more pronounced in older and sicker patients, indicating possible links with short-fallings in discharge processes.