Managing Customer Perceived Service Quality in Private Healthcare Sector in India

Abstract

Economic development and superior health care are so closely related that it is impossible to achieve one without the other. While the economic development in India is gaining momentum over the past few decades, our health system is at cross roads today. In this regard, health and health care need to be distinguished from each other for no better reason than that the former is often incorrectly seen as a direct function of the later. Indian healthcare sector is no longer limited to care rendered by or financed by government sector alone but recent time has seen massive participation of private players. At the same time superior service quality in private health care sector has been a major concern as customers have to pay a huge amount of money and effort to avail the services. The major problem in managing service quality lies in its heavy reliance on technical clinical criteria and the absence of ‘customers view’ on the services provided. Thus our main objective is to analyze perceived service quality, customer satisfaction and behavioural intention and looked at the most preferred private healthcare setting as perceived by Indian customers and the reasons thereof. At the same time we investigated and prioritized the diverse factors affecting perceived service quality and value in Indian private healthcare sector.The study uses both probability and non-probability sampling techniques for choosing the hospitals and respondents. Simple random sampling is used for availing respondents’ opinion on the subject whereas convenience and judgmental sampling is used for selection of hospitals. The sample size for respondents is determined by Hair et al., 2003 formula and found to be 384. However as increasing the sample size will reduce the sampling error we have finalized a sample size of 526 from twelve private hospitals of Odisha, Andhra Pradesh and Telangana. Analytical Hierarchy Process (AHP) was used to rank order of preferred healthcare setting with respect to the service quality dimensions and relative standings of every service provider with respect to its competitors. For decision making statistical tool such as AHP analysis, Exploratory Factor Analysis (EFA), Confirmatory Factor Analysis (CFA), Structural Equation Modeling (SEM), RIDIT analysis and GREY Relational Analysis (GRA) were used. The exploratory factor analysis was used to identify the underlying dimensions of customer perceived service quality (CPSQ) and customer perceived value (CPV) & confirmatory factor analysis (CFA) was used to confirm the factor structure and validate EFA results. Finally, the structural equation modeling (SEM) is employed to examine the hypothesized relationships