I think you can drop the "often". Law must almost by definition be flexible because there are so many things in life that aren't as simple 'yes' or 'no'.
I think this violation of privacy strikes the correct balance. Hospitals (especially ERs) are already quite full on a regular basis; making every room private would do substantial physical harm to many patients who'd wait much longer for treatment or have to forgo it entirely.
(Perfect privacy would also require soundproofed rooms for phone calls, mantrap doors for patient rooms so you can't get an inadvertent peek while walking by, and probably dozens of other expensively impractical mitigations.)
HIPAA requires "reasonable safeguards" to permit this sort of balance to be struck.
> build more rooms or hospitals. It's not rocket science
The hospitals near me have been expanding as fast as they can. Absolutely constant large-scale construction. It's not rocket science, but it's not a Thanos finger snap either.