Introduction & Objective: Hospitals as one of the main institutions providing health care services play an important role in the health system and allocate a high percentage of health sector's budget to them. This study aimed to answer whether social security hospitals efficiency levels are the same for all provinces in Iran? And whether any relationship exists between the human development indexes (HDI) of the provinces and technical efficiency levels of the hospitals?

Materials & Methods: Data envelopment analysis model has been used to measure technical efficiency of 65 social security hospitals, including small hospitals (working with lower than one hundred active beds) and large hospitals (working with over one hundred active beds) during the years 2007 to 2009. Further, the relationship between human development index and technical efficiency of hospitals in the provinces has been analyzed.

Results: Results show that the average technical efficiency of small and large hospitals working in low and medium HDI provinces (0.912 and 0.937) are more than the average technical efficiency of hospitals in higher HDI provinces (0.870 and 0.887).

Conclusion: It is recommended that social security organization concentrated distribute its hospital services in provinces with lower HDI and higher density of population living under the coverage of organization’s insurance. This will eventually puts its positive effects on per capita income of people, as well as more equitable distribution of income.