The existence of inefficiencies in health care provision is a major health policy concern in the developing countries. Health system of Pakistan mainly constitutes public and private sectors and the private sector covers almost 70 percent of the population. Increasing role of private sector and burden of out of pocket health expenditures highlight the need to investigate the performance of hospitals of private sector. In the first chapter, this study has estimated the technical efficiency of private hospitals of Pakistan for ambulatory services and inpatients care. The data has been used from a survey conducted by Pakistan Bureau of Statistics in 2010-11. Efficiency scores are estimated using Stochastic Frontier Analysis. At second stage, we have explored whether private hospitals in Pakistan increase their efficiency in response to an enhancement in neighboring regions efficiency level. This spatial regression analysis has been done using Spatial Lag Model and Spatial Error Model. We find that efficiency scores of Pakistan’s private hospitals are quite low. Not a single hospital is found to be working on full efficiency level. Moreover, the findings of the second stage analysis showed that efficiency has a positive spillover for Outpatient care for small hospitals. Contrary to it, big hospitals have spatial dependence in inpatients care. We concluded that small hospitals compete in outpatients department with the motive of profit maximization, whereas big hospitals compete in inpatients care with the same motive. In the second chapter, this study has estimated the technical efficiency of public hospitals in Pakistan for obstetric services. The data is taken from the Health Facility Assessment Survey which was conducted by ministry of health, Pakistan in 2010-11. Efficiency scores are estimated using parametric technique Stochastic Frontier Analysis (SFA). The relationship between efficiency and quality is explored using Least Square Dummy Variables (LSDV) and Two-Stage Residual Inclusion (2SRI). The efficiency scores of Pakistan’s public hospitals in obstetric servicesii are found to be quite low. Moreover, the relationship between a hospital’s efficiency and the quality of service it provides is found to be positive and statistically significant. We concluded that risk of maternal and neonatal mortality is lower in more efficient hospitals as compared to the less efficient ones. The findings have policy implication that efficiency gains can be achieved without the loss of quality of services provided by the hospitals. An effective healthcare system can operate properly if it considers patients’ perceptions (perceived quality) and modifies itself according to the feedback. The assessment of patients’ point of view (perceptions) not only is important to identify the problems in quality assessment, but it will also provide a way forward towards improvement in the existing condition of public healthcare system. In the third chapter, this study has explored the relationship between technical efficiency of health care units (DHQs hospitals), and the patients’ perceptions about the quality of services with respect to mother and child health. The data on patient’s perceptions’ and other control variables are taken from Client Exit Interviews that was part of HFA survey. Three techniques are used to form satisfaction index such as equal weights, Principal Component Analysis and Polychoric Principal Component Analysis for robustness. Two stage residual inclusion, Ordered Logistic Regression and Least square dummy variable techniques are used to investigate the relation between technical efficiency of a hospital and patients satisfaction level. The findings of this chapter reveal negative association exists between efficiency and patients’ perceptions which indicates with the increase in hospital efficiency, the satisfaction level of the patients tends to decrease. According to the findings of disaggregated analysis, the patients’ level of satisfaction which is associated with the healthcare provider attitude is more affected by the technical efficiency. Supervisor:- Dr. Wasim Shahid Malik Co-Supervisor:- Dr. Muhammad Nasir