Abstract
This paper uses data envelopment analysis to explore how to evaluate physician and hospital clinical efficiency for coronary artery bypass surgery. First, the DEA models (measuring overall technical and scale efficiency partitioned by severity) identified many inefficient surgeons. Regardless of time period studied, relatively few surgeons were found to be on the best-practicing production frontier (DEA efficiency score = 1). The authors offer some evidence that clinical efficiency may be subject to investing in organizational capabilities that arise from operational strategies such as developing open heart surgery as a specialty, years of experience, training, and ultimately, acquiring a cadre of “efficient” surgeons. At a minimum, these findings support including some measures of “superior” organizational capabilities, strategic focus or product specialization, continuing education, and experience in future work.