Objective To evaluate the length of stay difference and its economic implications between hospital patients and virtual ward patients.Design Retrospective longitudinal study.Setting Wrightington, Wigan and Leigh (WWL) Teaching Hospitals, National Health Service (NHS) Foundation Trust, a medium-sized NHS trust in the north-west of England.Participants Virtual ward patients (n=318) were matched 1:1 to 1:4, depending on matching characteristics, to all hospital patients (n=350). All patients were admitted to the hospital during the calendar year 2022.Outcome measures The primary outcome is the length of stay as defined from the date of hospital admission to the date of discharge or death (hospital patients) and from the date of hospital admission to the date of admission in a virtual ward (virtual ward patients). The secondary outcome is the cost of a hospital bed day and the equivalent value of virtual ward savings in hospital bed days. Additional measures were 6-month readmission rates and survival rates at the follow-up date of 30 April 2023.Risk factors Age, sex, comorbidities and the clinical frailty score (CFS) were used to evaluate the importance and effect of these factors on the main and secondary outcomes.Methods Statistical analyses included logistic and binomial mixed models for the length of stay in the hospital and readmission rate outcomes, as well as a Cox proportional hazard model for the survival of the patients.Results The virtual ward patients had a shorter stay in the hospital before being admitted to the virtual ward (2.89 days, 95% CI 2.1 to 3.9 days). Chronic kidney disease (CKD) and frailty were associated with a longer length of stay in the hospital (58%, 95% CI 22% to 100%) compared with patients without CKD, and 14% (95% CI 8% to 21%) compared with patients with one unit lower CFS. The frailty score was also associated with a higher rate of readmission within 6 months and lower survival. Being admitted to the virtual ward slightly improved survival, although when readmitted, survival deteriorated rapidly. The cost of a 24-hour period in a general hospital bed is £536. The cost of a day hospital saved by a virtual ward was £935.Conclusion The use of a 40-bed virtual ward was clinically effective in terms of survival for patients not needing readmission and allowed for the freeing of three hospital beds per day. However, the cost for each day freed from hospital stay was three-quarters larger than the one for a single-day hospital bed. This raises concerns about the deployment of large-scale virtual wards without the existence of policies and plans for their cost-effective management.Data are available upon reasonable request. Data are available on reasonable request from martin.farrier@wwl.nhs.uk. All data were anonymised, and data sharing followed the Trust Governance protocols and procedures. Identifiable patient-level data from this project are not available to the public.