Combined efficiency is the number of points a team would gain or lose in 100 possessions. Take a team's offensive efficiency and subtract the defensive efficiency.
Combined Efficiency = OE - DE
Using the same example of the 2016-17 regular season matchup between Kentucky and North Carolina, Kentucky's offensive efficiency was 130 and its defensive efficiency was 127.
Kentucky's combined efficiency is 3.
Combined Efficiency = 130 - 127 = 3
This gives a team 1 efficiency number instead of 2. It can be described as a glorified margin of victory.
Kentucky's combined efficiency is 3. It won the game by 3 points.
Remember the game didn't feature 100 possessions. Combined efficiency accounts for 100 possessions. If it did, this suggests Villanova would of won by 3 points too.
Offensive and defensive efficiency tell you how effective a team is based on the four factors. Combined efficiency leaves a lot unknowns as to why a team is good or bad.
If all you're given is a combined efficiency of 5, it's hard to know if a team is good offensively or defensively, and what factors are leading to that success.