Introduction : The recognition of economics of hospitals, as integral and costly components of health care systems, is vital for assessing their efficiency and the factors affecting them. The study through Data Envelopment Analysis (DEA) aimed to determine the efficiency of selected hospitals of Urmia University of Medical Sciences.

  Methods : This was a descriptive-analytic (cross-sectional and retrospective) study conducted in 2009. Input variables included the number of active beds, doctors and other personnel and output variables encompassed outpatients’ admission and occupied day-bed. The data were analyzed through DEA method and Deap_2.1 software with variable return to scale assumption. Slack and radial movements, the efficiency of the hospitals and the excessive use of inputs were determined.

  Results : The mean scores of technical, manageria l and scale efficiency of the hospitals were 0. 584 , 0. 782 and 0. 771 , respectively. Four hospitals enjoyed the maximum technical efficiency (1). The capacity of efficiency enhancement was about 41.5 % without any increase in costs , applying the same amount of inputs.

  Conclusion : A decrease of surplus production factor based on the results of DEA can lead to a reduction in expenditures. In hospitals with technical efficiency of less than one, the original and projected values of inputs were different and had a surplus. It is suggested that hospitals decrease their surplus from original values to achieve the expected optimal performance. The results could be applied in hospitals as a benchmark for decision making about resource allocation, controlling and improving hospital performance.