MEASURING SERVICE QUALITY IN PRIVATE HEALTHCARE USING SERVPERF SCALE

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1 MEASURING SERVICE QUALITY IN PRIVATE HEALTHCARE USING SERVPERF SCALE Abstract Byju K.P.M, Research Scholar & Dr.Y.Srinivasulu, Associate professor Department of International Business, School of Management, Pondicherry University Measuring service quality is one of the most researched area in services marketing context. Researchers over the past three decades have developed various measurement instruments to measure service quality and its relationship with that of customer satisfaction leading to future purchase intentions. SERVQUAL and SERVPERF are the two widely used instruments across the globe by the service sector for measuring service quality. The expectations minus perception approach by Parasuraman and others has got serious critics even though it is the most adopted one till date. Many felt that expectations have multiple dimensions hence it is hard to measure. Cronin and Taylor then came up with SERVPERF as they strongly believed that performance model is more convenient in measuring service quality. Further research showcased its superiority in terms of better reliability, convergent and discriminant validity and less bias than SERVQUAL. Incorporation of SERVPERF in Indian service segment especially in healthcare is in its nascent stage only. This article intends to measure the service quality determinants in a private hospital using SERVPERF scale, both from patients and their attendant s perspective. The results show that there is no major difference in service quality perceptions between patients and their attendants. Responsiveness, Empathy and Tangibility are the three main factors associated with overall customer satisfaction. Key words: Service quality, Customer satisfaction, SERVQUAL, SERVPERF, Private hospital Introduction Service quality as described by Parasuraman, Zeithmal and Berry (1988) is a global judgment (or) attitude, relating to the superiority of the service (Urban, 2013). Managing service quality is one of the most important tool an organization needs to posses in order to have a long term satisfied customers (Cronin & Taylor, 1994). Cronin and Taylor (1992) argued that service 337

2 quality has a positive influence on customer satisfaction. Service quality is in fact an antecedent to customer satisfaction. Many researchers came to a common consensus that its service quality and customer satisfaction which will have a long term impact in customer relationship (Irfan, Ijaz, & Farooq, 2012). Customer satisfaction is a leading criterion for determining the quality that is actually delivered to the customers (Vavra, 1997). According to Shierdan (1998) companies have a competitive advantage with better service quality as they can differentiate effectively from the competition with enhanced customer service. Quality has been used to describe diverse phenomenon. Service quality is usually considered mostly as a cognitive construct while satisfaction has been considered a more complex concept that includes cognitive and affective components (Oliver,1997).The argument of taking service quality as a mere cognitive thing (or) having an emotional influence attached to it depends upon the service sector understudy (Kettinger & Lee, 1997).In the past few decades service quality has become a major area of attention to practitioners, managers and researchers awing to its strong impact on business performance, lower costs, customer satisfaction, customer loyalty and profitability.for an organization to remain competitive in the market it is necessary to grab and channelize information for the purpose of enhancing service quality (Kettinger & Lee, 1997). Service quality needs to be monitored constantly in order to gain a competitive advantage. Service quality becomes even more important in sectors like healthcare where the information regarding technical aspect of the service offered is often limited or unknown to the patient. In these circumstances the functional aspect becomes more important because the patients evaluate the entire service based on how it was provided to them. Objectives of the study 1. To analyze various models used for measuring quality of service across all service sectors. 2. To find whether there is any significant difference in mean scores of patients and attendants with respect to service quality determinants. 338

3 3. To find out the relation between the five factors of service quality and the customer satisfaction. 4. To analyze whether there is any significant difference is service quality perception with respect to gender, Income level and no of visits to the hospital. Measuring Service quality Service quality as mentioned by Parasuraman and co as an attitude (or) judgment towards a service rendered, is hard to measure because of its highly qualitative nature. Many authors came out with different methods and measured service quality using their own constructs (Carrillat, Carrillat, Jaramillo, & Muliki, 2007). Gronroos (1984) came out with three components of service quality (i.e.) 1. Technical quality 2. Functional quality and 3. Image of the organization. It is the former two qualities which impacts the latter one and the latter one having a considerable impact on perceived service quality. Gap model (Parasuraman, Zeithamal and Berry, 1985) The gap model proposed by Parasuraman et.al is a function of differences between expectation and performance along the quality dimensions. It is developed on the basis of gap analysis which includes five, stated as 1. Customer expectations minus management perceptions of those expectations. 2. Difference between management perceptions of consumer s expectations and service quality specifications. 3. Difference between service quality specifications and the actual service delivered. 4. Difference between the actual service quality and the communications to consumers about service quality. 5. Difference between consumer s expectation and perceived service quality. Performance only model (Cronin and Taylor, 1991) The authors conceptualized the measurement of service quality and its relationship with customer satisfaction and future purchase intentions. The argument put forward for performance only measurement (SERVPERF) is that service quality is a form of customer attitude and performance only measure of service quality is an enhanced means of measuring 339

4 service quality. They maintained that performance instead of performance minus expectations determines service quality. And there are many other models such as 1. Attribute and overall affect model by Dabholkar (1996) which is mainly framed for self service options. 2. PCP attribute model by Philip and Hazlett (1997) where three main classes of attributes where taken into consideration namely pivotal, core and peripheral attributes. 3. Synthesized model of service quality by Brogowicz et.al (1990), the purpose of the model is to identify the dimensions associated with service quality in planning, implementation and control process. The synthesized model of device quality considered three factors viz., company image, external influences and traditional marketing activities as the factors influencing technical and functional quality expectations to name a few (Carrillat, Carrillat, Jaramillo, & Muliki, 2007). Study area & construct used Study was conducted in a service oriented 1200 bedded hospital in Pondicherry region. SERVPERF scale was used to gather information regarding service quality from the respondents. Total respondents were 183 out of which 103 -patients and 80 - attendants. The questionnaire had two parts. 1. A total of 10 questions dealing with the Geographical and Demographical data of the respondents. 2. A total of 27 questions (Psychometric) focusing on the five latent factors of service quality and the overall customer satisfaction. The five factors taken for the study are: 1. Tangibility (Measured by 5 constructs) Tangibility represents the service physically. It is defined as the appearance of physical facilities, staff appearance and communication materials that are used to provide services for them. Often firms use tangibility to highlight their image and quality. 2. Reliability (Measured by 4 constructs) 340

5 It is the ability to perform promised service accurately on time. It generally means the company delivers on its promises regarding delivery, service provision and problem resolution. 3. Responsiveness (Measured by 4 constructs) Being willingness to help, it is the willingness or readiness to help customers and to provide prompt service. This dimension emphasizes attentiveness and promptness in dealing with customer requests, questions, complaints and problems. 4. Empathy (Measured by 4 constructs) Treating customers as individuals is defined as empathy. Caring, individual attention a firm provides to its customers. 5. Assurance (Measured by 4 constructs) Inspiring trust and confidence is defined as Assurance. The employees knowledge and courtesy and the ability of the firm and its employees to inspire trust and confidence. Hypothesis 1. H0 1 : There is no significant difference in service quality perception between male and female. 2. H0 2 : There is no significant difference in service quality perceptions with respect to income levels of the respondents. 3. H0 3 : There is no significant difference in service quality perceptions with respect to number of visits to the hospital. 4. H0 4 : There is no significant relation between all the five service quality factors and overall customer satisfaction. All the statistical measures mentioned below were computed using SPSS 20.0 version. All the following analyses are done at 5% level of significance. Hence the cutoff p value to accept null hypothesis is.05 for all the subsequent analysis. The reliability value of the scale items are computed using Cronbach s alpha. The Cronbach s alpha value is.893 which is consistent with the values obtained from research using the same scale (Narang, 2010). 341

6 Analysis and Discussion Demographics Of the total 183 respondents 179 were male and 161 female. 56% of the patients were from Puducherry union territory and 19% from Cuddalore district, while the remaining from nearby districts of puducherry. 38% of the respondents had a minimum of three visits to the hospital before as inpatients while 33% of the respondents were using the facility for more than four times. So the major junk of the patients (79%) had repeated visits to the hospital facility before. Hence they were in much better position to evaluate the quality of service provided. Mean value of all the Factors The following table shows the mean value of all the factors taken for the study both the patients, attendants and overall perspective. The mean score consistently above 4.10 for all the factors shows that both attendants as well as patients as highly satisfied with the service outcomes. Factor Overall Patients Attendants 1. Tangibility Reliability Responsiveness Assurance Empathy Customer Satisfaction

7 H0 1 : There is no significant difference in service quality perception between male and female. Table: 2 Customer sat sum Equal variances assumed Equal variances not assumed Independent Samples Test t-test for Equality of Means Levene's Test for Equality of Variances F Sig. t df Sig. (2- tailed) Mean Difference Std. Error Difference % Confidence Interval of the Difference Lower Upper To identify whether there is any significant difference in perceptions of overall customer satisfaction between male and female respondents, Independent sample T Test was performed. The Leven s test for equality of variances is.133 which is higher than.05 (at 5% level of significance) which states that there is inequality in variances among two groups. The p value under equal variance not assumed is.029 which is less than.05 (at 5% level of significance). H0 1 is rejected. There is significant difference between male and female with respect to perceptions of overall customer satisfaction. H0 2 : There is no significant difference in service quality perceptions with respect to income levels of the respondents. Anova Table Table: 3 Sum of Squares df Mean Square F Sig. Between Groups Within Groups Total

8 To determine whether there is any significant difference in respondent s perceptions towards overall customer satisfaction with respect to the income levels of the respondents, one way analysis of variance measure was employed. The p value which denotes the significance level of the test used is.000 which is lesser than.05 (at 5% level of significance).hence the null hypothesis stands rejected which states that there is significant difference in respondent s perceptions towards overall customer satisfaction with respect to the income levels of the respondents. Post-Hoc analysis was done to examine the groups in detail to have multiple comparisons between them. Turkey HSD the preferred method for Post Hoc analysis was employed. The following table reveals that the 5 types of income groups can be clubbed into three subsets but will have overlapping between them. Table: 4 Customer sat sum Monthly income N Subset for alpha = ,001-30, <10, ,001-15, ,001-20, ,001-25, Sig H0 3 : There is no significant difference in service quality perceptions with respect to number of visits to the hospital Table: 5 Anova Table Customer sat sum Sum of Squares df Mean Square F Sig. Between Groups Within Groups Total

9 To measure whether there is any significant difference in based on number of visits they had to the hospital before, one way analysis of variance measure was employed. The p value which denotes the significance of the measure used is.100 higher than.05 (at 5% significance level). Hence the null hypothesis H0 3 is accepted that there is no significant difference in respondents perception towards the overall customer satisfaction based on the number of visits they had to the hospital before. H0 4 : There is no significant relation between all the five service quality factors and overall customer satisfaction Table: 6 Correlations Customer sat sum Pearson Correlation.663 ** Tangibility sum Sig. (2-tailed).000 N 183 Pearson Correlation.442 ** Reliability sum Sig. (2-tailed).000 N 183 Pearson Correlation.690 ** Responsiveness sum Sig. (2-tailed).000 N 183 Pearson Correlation.660 ** Empathy sum Sig. (2-tailed).000 N 183 Pearson Correlation.557 ** Assurance sum Sig. (2-tailed).000 N 183 Pearson Correlation 1 Customer sat sum Sig. (2-tailed) N 183 **. Correlation is significant at the 0.01 level (2-tailed). Correlation matrix Correlation analysis was performed to identify the relationship between all the five factors contributing towards service quality with that of overall customer satisfaction. All the five correlation coefficients are positive and statistically significant at 1% level of significance. 345

10 The correlation between Responsiveness, Tangibility and Empathy are highly correlated with that of overall satisfaction (r values -.690,.663 and.660 respectively). Whereas Reliability and Assurance have a moderate correlation with overall customer satisfaction (r values-.557 and.442 respectively). Regression Table: 7 Model Summary d Model R R Adjusted Std. Error of the Change Statistics Square R Square Estimate R Square F df1 df2 Sig. F Change Change Change a b c a. Predictors: (Constant), Responsiveness sum b. Predictors: (Constant), Responsiveness sum, Empathy sum c. Predictors: (Constant), Responsiveness sum, Empathy sum, Tangibility sum Table 8 Coefficients a Model Unstandardized Standardized t Sig. Collinearity Coefficients Coefficients Statistics B Std. Beta Tolerance VIF Error (Constant) Responsiveness.631 sum (Constant) Responsiveness.411 sum Empathy sum (Constant) Responsiveness sum Empathy sum Tangibility sum a. Dependent Variable: Customer sat sum The correlation shows strong and moderate relation between the independent variables (5 factors of service quality) and the dependent variable (overall customer satisfaction). In order to know which of these variables predicts the customer satisfaction significantly a multiple regression analysis was performed. 346

11 The Multiple regression analysis was done through stepwise method in order to determine the best possible factors determining the overall customer satisfaction level. Three different models are analyzed here 1. Taking Responsiveness only as the Independent variable. 2. Taking both Responsiveness and Empathy as Independent variables. 3. Taking Responsiveness, Empathy and Tangibles as Independent variables. The other 2 factors Assurance and Reliability were ignored because of Non significant F values. The table provides the model summary. The adjusted r square values of 3 models were compared and the 3 rd model has the highest adjusted r square value The 3 rd model explains percent of the total variance in the dependent variable. Table provides the coefficients of the Independent variables taken for the study here all the coefficients are statistically significant at 1% level of significance. From this table the below regression equation is framed. Overall customer satisfaction = *Responsiveness +.295* Empathy * Tangibility. Conclusion The incorporation of SERVPERF scale in Indian healthcare is at its nascent stage. The reliability values shows that the scale is consistent as proven in other service sectors in India and other healthcare sectors worldwide. This study took a 2 dimensional view of capturing the perceptions of both the Attendants and Patients towards service quality and customer satisfaction. The mean values of all the five factors and customer satisfaction reveals that there is common consensus between the two groups towards the service offered. The difference in perceptions towards customer satisfaction with respect to different income levels is mainly due to lesser satisfaction levels with higher income groups as their expectations creeps up more. Relation between five factors and the overall customer satisfaction is positive and further analysis revealed that it s only Responsiveness, Empathy and Tangibles that can predict the customer satisfaction levels significantly. The overall model explains sufficient variance in the dependent variable. Responsiveness and Empathy both handled by the nursing staff in a healthcare organizations emerged as the two top factors in determining customer satisfaction 347

12 levels. It states the need of employee empowerment and increased internal marketing efforts to have enhanced customer experience. Tangibility factor often lacks behind in developing countries like India when compared with other developed ones. With the recent rapid increase in Healthcare segment which is poised to reach USD 158 billion by 2017 hope this void gets filled up. References 1. Arasli, H., & Ekiz, E. (2008). Gearing service quality into Public and private hospitals in small islands: Empirical evidence from cyprus. International journal of Healthcare quaity assurance, 21 (1), Business line. (2012, August 29). Privet sector in unicersal Healthcare inevitable:e&y. 3. Carrillat, Carrillat, F. A., Jaramillo, F., & Muliki, J. P. (2007). The validity of SERVQUAL and SERVPERF scales. International Journal of Indusrty Management, CII-Mckinsey. (December 2012). Indian Healthcare: Inspiring possibilities & Challenging journey. CII. 5. Cronin, J., & Taylor, S. A. ( 1994). Reconciling Performance- Based and Perceptionds minus Expectations Measurement of Service Quality. Journal of Marketing, 58 (1), Gilmore, A. (2010). Service marketing management. New delhi: Response books. 7. Irfan, S., Ijaz, A., & Farooq, M. (2012). Patients satisfaction and service quality of hospitals in pakistan: An Empirical assesment. Middle-East Journal of Scientific Research, Kettinger, W. J., & Lee, C. C. (1997). Pragmatic Perspectives on the Measurement of Information Systems Service Quality. MIS quaterly, 21 (2), Krishnan, V. (2013, March Friday 12:34). Live Mint & Wall street journal. Bigger role of private sector in Healthcare. 10. Narang, R. (2010). Measuring percieved quality of health services in India. International Journal of Healthcare Quality Assurance, 23 (2),

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