Testing the hospital value proposition: an empirical analysis of efficiency and quality.

Purposes: To assess the relationship between hospitals' X-inefficiency levels and overall care quality based on the National Quality Forum's 27 safe practices score and to improve the analytic strategy for assessing X-inefficiency.

Methodology: The 2005 versions of the American Hospital Association and Leapfrog Group's annual surveys were the basis of the study. Additional case mix indices and market variables were drawn from the Centers for Medicare and Medicaid Services data sources and the Area Resource File.