The data, from 32 mental health trusts, shows average number of “bed days” per patient per year has fallen by 10%.
Healthwatch England says some patients are being discharged too early and without enough support.
Chairwoman Anna Bradley said the findings reflect a troubling picture where patients discharged from hospital often struggle to access crisis treatment at home.
“What is particularly problematic is when people leave institutions, they cannot access the support they need in the community. We have heard of cases where people have taken their own lives.
“Our concern is that people are being lost between hospitals and community services.”
Latest statistics show that in recent years, the number of suicides of patients being cared for at home has been double that of inpatients.
Prof Louis Appleby, chairman of the National Suicide Prevention Strategy advisory group, says the numbers represent a change in the nature of acute psychiatric care, with treatment increasingly being provided outside hospitals. While many patients prefer care at home, it can also represent a risk.
“The ideological drive towards services in the community and away from beds, can go too far. Eventually that drive crosses a line – and that line is safety.
“If you combine the ideological drive with pressure on resources, you have a toxic combination,” he said.
Graeme Price died after jumping from a multi-storey car park in July 2013.
He became ill shortly after taking on a new job and was diagnosed with depression and psychosis.
He was admitted to an assessment ward at Bedford Hospital but discharged after three weeks back to the care of the crisis resolution and home treatment team.
His wife, Linda, said: “They hadn’t done a formal care plan to decide what his treatment should be going forward. They just released him.”
Ten days after being discharged, while on a shopping trip with Linda and his daughter Emily, he jumped to his death.
The coroner said he “required treatment as an inpatient but no bed was available”.
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