Abstract: As such the health care systems in India is very complex and having various verticals. With the emergence of corporatization of hospital the measurement of efficiency has become the initial step in the process of individual performance audit of patient care centers. The term efficiency is largely used in the field of economics and it refers to the best utilization of resources. A very common example of operational efficiency is technical efficiency which means the effective use of resources (input) in producing outputs. In the Farrell framework, a hospital is judged to be technically efficient if it is operating on the best practices of the production frontier. Mainly there are two methods which are used in measuring operational efficiency. The first is Data Envelopment Analysis (DEA) which is a linear programming method enabling the measurement of efficiency consistent with the theoretically based concept. The role of DEA is to examine the relationship between inputs to a process and the outputs of that process. The second technique for assessing efficiency that is employed is Stochastic Frontier Analysis (SFA). However the DEA is used most commonly.