Abstract Background We aimed to get better insight into the development of the variation in length of stay (LOS) between and within hospitals over time, in order to assess the room for efficiency improvement in hospital care. Methods Using Dutch national individual patient-level hospital admission data, we studied LOS for patients in nine groups of diagnoses and procedures between 1995 and 2010. We fitted linear mixed effects models to the log-transformed LOS to disentangle within and between hospital variation and to evaluate trends, adjusted for case-mix. Results We found substantial differences between diagnoses and procedures in LOS variation and development over time, supporting our disease-specific approach. For none of the diagnoses, relative variance decreased on the log scale, suggesting room for further LOS reduction. Except for two procedures in the same specialty, LOS of individual hospitals did not correlate between diagnoses/procedures, indicating the absence of a hospital wide policy. We found ...