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Data-Driven Efficiency Benchmarking for Risk Mitigation: A Data Envelopment Analysis of U.S. Hospitals, 2018-2024
Diane Dolezel1, Suhila Sawesi2
1Health Informatics & Information Management Department, Texas State University, Round Rock, TX 78665, USA.
Healthcare (Basel, Switzerland)
|August 13, 2026
Summary
Most U.S. hospitals show inefficiency in converting resources to patient care volume and quality. Higher IT spending correlated with efficiency, while value-based purchasing quality metrics were linked to greater inefficiency.
Area of Science:
- Health Services Research
- Operations Research
- Health Economics
Background:
- Hospital efficiency is crucial for optimizing care delivery, quality, and patient safety.
- Identifying unrealized capacity within healthcare systems is essential for improvement.
- Understanding the relationship between IT investments and clinical performance is key.
Purpose of the Study:
- To evaluate the relative technical efficiency of U.S. short-term acute care hospitals from 2018-2024.
- To assess how IT operating investments translate into clinical service volume and quality performance.
- To identify factors associated with hospital efficiency.
Main Methods:
- Utilized a longitudinal panel of 8589 hospital-year observations.
- Employed output-oriented Data Envelopment Analysis (DEA) under variable returns to scale to estimate technical efficiency.
- Applied Simar-Wilson double-bootstrapped truncated regression to analyze associations with efficiency, quality, case mix, and scale.
Main Results:
- Mean technical efficiency was 0.567, with a mean output expansion potential of 102.49%.
- Hospitals operating on the efficiency frontier (7.38%) maintained higher IT operating spending.
- Higher Hospital Value-Based Purchasing quality performance was associated with greater inefficiency, while case mix complexity and scale were linked to higher efficiency.
Conclusions:
- The majority of hospitals operate below the best-practice efficiency frontier, indicating resource conversion gaps.
- Descriptive structural patterns suggest IT spending and operational scale positively influence efficiency.
- Value-based purchasing metrics may inadvertently be associated with observed inefficiencies, warranting further investigation.
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