This paper provides evidence of the symptom of the so-called 'supplier-induced demand effect' on the average length of stay of inpatients in the Belgian hospital sector. Using an endogenous regime switching model, the estimates are consistent with the idea that hospitals in excess-capacity increase the length of stay of their inpatients, above what should have been if one considers only the 'patients' casemix of the hospitals. The model also includes the possibility of spatial spillovers which should appear as a consequence of these disequilibrium regimes: those spillovers not only provide a better explanation of the patients dispersion among hospitals, they also tend to decrease the 'supplier-induced demand' effect on length of stay by reducing the original extent of the excess-supply situation. Further, consistent with the model, it is found that hospital sectors in predominant excess-demand (resp., excess-supply) are generally those where the net emigration balance is positive, (resp., negative)