Data-Driven Efficiency Benchmarking for Risk Mitigation: A Data Envelopment Analysis of U.S. Hospitals, 2018-2024

Objectives: Hospital efficiency provides a systems-level perspective for identifying unrealized capacity to improve care delivery, quality, and patient safety. This study evaluated relative technical efficiency among U.S. short-term acute care hospitals (2018-2024) and evaluated how structural IT operating investments are converted into clinical service volume and quality-related performance. Methods: A longitudinal panel of 8589 hospital-year observations was utilized to estimate technical efficiency with an output-oriented Data Envelopment Analysis (DEA) under variable returns to scale. A secondary Simar-Wilson double-bootstrapped truncated regression (n = 2147 complete casesexamined associations with bias-corrected efficiency, clinical quality, case mix, and operational scale. Results: Mean DEA efficiency was 0.567, with 7.38% (n = 634) operating on the annual efficiency frontier and a mean output expansion potential of 102.49%. Efficient hospitals maintained higher IT operating spending. Stage 2 regression showed that higher Hospital Value-Based Purchasing quality performance was significantly associated with greater inefficiency. Conversely, higher case mix complexity and larger operational scale were associated with higher efficiency. Conclusions: Most hospitals operated below the best-practice frontier, indicating gaps in converting resources into service volume and quality. Because core operational drivers were included in the primary DEA model, observed associations show descriptive structural patterns rather than direct cause-and-effect relationships.