The results indicated that a positive relationship between hospital efficiency and uncompensated care provision exists. That is, hospitals that are categorized as efficient are likely to provide more uncompensated care. We also found that hospitals tended to provide more uncompensated care when increased demand for these services occurred in a market. Increases in Medicare or Medicaid patient share reduced the provision of uncompensated care. In relation to hospital efficiency, the results indicated that HMO penetration and Medicaid patient share reduced hospital efficiency.