Service Quality and Service Satisfaction in the Inpatient Setting: Moderating role of insurance status

Background: The purpose of this study is to propose and test for the moderating role of insurance status on the relationship between service quality (SQ) and service satisfaction (SS) in a hospital setting. The study focuses on the state-run health insurance (SHI) provided to economically deprived families in India. Methodology: Using a reliable and validated structured questionnaire adapted from Dagger’s hierarchical model of health service quality, exit interviews were conducted with 279 respondents. 310 study participants were randomly recruited (response rate = 90%) from the discharge list of general surgery ward of a private hospital in the Thane district of Maharashtra, India. Multi-group Structural Equation Modelling (SEM) in AMOS v.22 was used to test for the hypothesized model. Findings: The study finds that patients’ perceptions of different service quality dimensions, including inter-personal, administrative and technical are affected by the insurance status. The analysis identified technical quality as the key determinant of overall perceived service quality for patients insured under SHI. Results support our proposed moderating effect of insurance status on the relationship between service quality and service satisfaction. Conclusion: The study findings indicate that patients receiving free treatment under SHIs may not have higher expectations of inter-personal and/or administrative quality, but are concerned about technical quality. For paid patients all the dimensions of service quality determine overall perceived service quality and service satisfaction. The study findings have implications for market segmentation strategies based on the insurance status. The study provides insights to SHI implementers for improving the program in the long run and also help hospital administrators identify the quality dimensions to focus upon and ensure patient satisfaction and loyalty