Health care is uncertain, dynamic, and fast growing. With digital technologies set to revolutionise the industry, hospital capacity optimisation and planning have never been more relevant. The purposes of this article are threefold. The first is to identify the current state of the art, to summarise/analyse the key achievements, and to identify gaps in the body of research. The second is to synthesise and evaluate that literature to create a holistic framework for understanding hospital capacity planning and optimisation, in terms of physical elements, process, and governance. Third, avenues for future research are sought to inform researchers and practitioners where they should best concentrate their efforts. In conclusion, we find that prior research has typically focussed on individual parts, but the hospital is one body that is made up of many interdependent parts. It is also evident that past attempts considering entire hospitals fail to incorporate all the detail that is necessary to provide solutions that can be implemented in the real world, across strategic, tactical and operational planning horizons. A holistic approach is needed that includes ancillary services, equipment medicines, utilities, instrument trays, supply chain and inventory considerations.