An application of data envelopment analysis: measuring the relative performance of Florida general hospitals

Unlike conventional methods for evaluating the performance of a not-for-profit entity, a recently developed mathematical programming technique called Data Envelopment Analysis (DEA) is able to handle multiple inputs and outputs simultaneously without assigning arbitrary weights and does not require the use of homogeneous measurement units nor a prespecified functional relationship between inputs and outputs. This technique can generate a summary scalar efficiency ratio for each decision-making unit and identify the individual amount of inefficiency for each input and/or output. This paper applies DEA to the assessment of the performance of Florida general hospitals.