CHURCH OWNERSHIP AND HOSPITAL EFFICIENCY

Using a sample of California hospitals, the effect of church ownership was examined as it relates to nonprofit hospital efficiency. Efficien cy scores were computed using a nonparametric method called data envel opment analysis (DEA). Controlling for hospital size, location, system membership, and type of church ownership, church-owned hospitals were found to be more frequently in the efficient category than their secu lar nonprofit counterparts. The outcomes have policy implications for reducing healthcare expenditures by focusing on increasing outputs or decreasing inputs, as appropriate, and bolstering the case for church- sponsored hospitals to retain the tax-exempt status due to their abili ty to manage their resources as efficiently as (or more efficiently th an) secular hospitals.