Measurement and sources of overall and input inefficiencies: Evidences and implications in hospital services

Our study has several important contributions and practical implications. First, we fine-tune previous efficiency measures on hospitals by refining input and output measures. Second, with variables on organization, management, demographics, and market competition, we identify specific factors associated with a hospital's overall operational inefficiency. More importantly, by decomposing the overall DEA operational inefficiency score into different individual input inefficiencies (including slacks), we further identify specific variables that cause individual input inefficiency. Third, significant differences are observed among factors of the overall inefficiency and individual input inefficiencies. These findings have important implications for identifying congruent factors for performance standard setting and evaluation; it also provides invaluable information for guiding effective resource allocation and better decision making for improving hospital operational efficiency.