Cost-effectiveness and data envelopment analysis.

Data Envelopment Analysis (DEA) identifies price and technical inefficiencies among decision-making units. With controls for differences in case-mix and standardized outcomes, DEA's "best practice" frontier can be interpreted as a "cost-effectiveness" frontier. This study illustrates the key concepts, identifies the decisions required to use the technique for medical care decision making, and presents an application to a system of nine hospitals that offer obstetric services.