OBJECTIVE To review and characterize existing health care efficiency measures in order to facilitate a common understanding about the adequacy of these methods. DATA SOURCES Review of the MedLine and EconLit databases for articles published from 1990 to 2008, as well as search of the "gray" literature for additional measures developed by private organizations. STUDY DESIGN We performed a systematic review for existing efficiency measures. We classified the efficiency measures by perspective, outputs, inputs, methods used, and reporting of scientific soundness. PRINCIPAL FINDINGS We identified 265 measures in the peer-reviewed literature and eight measures in the gray literature, with little overlap between the two sets of measures. Almost all of the measures did not explicitly consider the quality of care. Thus, if quality varies substantially across groups, which is likely in some cases, the measures reflect only the costs of care, not efficiency. Evidence on the measures' scientific soundness was mostly lacking: evidence on reliability or validity was reported for six measures (2.3 percent) and sensitivity analyses were reported for 67 measures (25.3 percent). CONCLUSIONS Efficiency measures have been subjected to few rigorous evaluations of reliability and validity, and methods of accounting for quality of care in efficiency measurement are not well developed at this time. Use of these measures without greater understanding of these issues is likely to engender resistance from providers and could lead to unintended consequences.