The paper estimates cost efficiency of 99 general hospitals in the Czech Republic during 2001-2008 using Stochastic Frontier Analysis. We estimate a baseline model and also a model accounting for various inefficiency determinants. Group-specific inefficiency is present even having taken care of a number of characteristics. We found that inefficiency increases with teaching status, more than 20,000 treated patients a year, not-for-profit status and a larger share of the elderly in the municipality. Inefficiency decreases with less than 10,000 patients treated a year, larger population, and more hospitals in the region.