There are many different definitions that are used frequently to assess organizational efficiency, such as managerial effectiveness or managerial competency. These alternatives often focus on various strategies used to improve organizational financial performance. For this study, we defined hospital efficiency as the minimum feasible reduction of inputs while holding the amount of outputs constant. We selected this definition of efficiency because hospitals are more able to control their inputs (i.e., costs, labors, capital assets) than their outputs (i.e., outpatient visits, inpatient discharges). In addition, because uncom- pensated care represents a cost for which hospitals may not be fully reimbursed, our selected efficiency definition is closely aligned with the concern of the public and policy makers noted above, namely, that hospitals may seek to reduce indigent care when facing pressures to become more efficient.