Abstract
The UK government believes that substantial variations in efficiency persist in the National Health Service and has called for improvements in the cost effectiveness of service provision. As part of this general initiative, hospitals have been encouraged to participate in a project designed to compare labour costs in general surgery specialties. This paper analyses these costs, taking into account the scale of operation and mix of output, using econometric techniques and data envelopment analysis. The results produced by these methods are compared as a form of sensitivity analysis. For the majority of general surgery units no evidence is found to support the belief that there are widespread differences in cost efficiency. However, a small number of units appear to perform poorly irrespective of the measurement technique employed. These units merit further scrutiny.
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