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Hospital service quality: A managerial challenge

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Hospital service quality:
a managerial challenge
Raduan Che Rose
Jegak Uli
Mohani Abdul and
Kim Looi Ng
The authors
Raduan Che Rose is Associate Professor, Graduate School of
Management, Jegak Uli is Associate Professor, Department of
Professional Development and Extension Education, and
Mohani Abdul is a Lecturer in the Faculty of Economics and
Administration, all at the University Putra Malaysia, Serdang,
Selangor, Malaysia.
Kim Looi Ng is Director of Clinical Nursing at the King Khalid
National Guard Hospital, Jeddah, Saudi Arabia.
Keywords
Hospitals, Customer services quality, Perception,
National cultures, User satisfaction, Malaysia
Abstract
While much is known generally about predictions of customer-
perceived service quality, their application to health services is
rarer. No attempt has been made to examine the impact of social
support and patient education on overall service quality
perception. Together with six quality dimensions identified from
the literature, this study seeks to provide a more holistic
comprehension of hospital service quality prediction. Although
79 percent of variation is explained, other than technical quality
the impact of the remaining factors on quality perception is far
from constant, and socio-economic variables further complicate
unpredictability. Contrary to established beliefs, the cost factor
was found to be insignificant. Hence, to manage service quality
effectively, the test lies in how well healthcare providers know
the customers they serve. It is not only crucial in a globalized
environment, where trans-national patient mobility is
increasingly the norm, but also within homogeneous societies
that appear to converge culturally.
Electronic access
The Emerald Research Register for this journal is
available at
www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/0952-6862.htm
International Journal of Health Care Quality Assurance
Volume 17 · Number 3 · 2004 · pp. 146-159
q Emerald Group Publishing Limited · ISSN 0952-6862
DOI 10.1108/09526860410532784
146
Introduction
Service providers are increasingly having to deal
with a wide range of social, financial, political,
regulatory and cultural challenges (Coulson-
Thomas, 1997), the impact of which, among other
factors, is the demand for greater efficiency, better
quality and lower costs (Ovretveit, 2000; Urden,
2002). Hence, quality management has emerged
not only as the most significant and enduring
strategy in ensuring the very survival of
organizations (Ennis and Harrington, 1999), but
also a fundamental route to business excellence
(Wang and Ahmed, 2001).
Health service organizations in Malaysia are no
different. There are 117 public hospitals and 224
private hospitals (Malaysian Medical Association,
2002) of varying bed capacity in the country, and
the need to increase their competitive edge is
becoming more intense. Moreover, due to the
availability of information and a better-educated
population, the need to measure up is no longer a
choice but a necessity in meeting rising
expectations from better-informed customers
(Lim and Tang, 2000). Although competing for
patients may not be the objective of the heavily
subsidized healthcare institutions run by the
Government, they have a moral responsibility to be
fully accountable for the efficient use of public
resources (Sarji, 1996). Furthermore, after
equipping and modernizing with facilities such as
paperless-filmless hospitals, continuing online
medical education for staff and teleconsultation
linking the diagnostics setup and the patient to
physicians (Government of Malaysia, 1997), it is
now the aspiration of hospitals to have as large a
share as possible of the lucrative healthcare market
that is emerging in the region (The Star, 2002).
In summary, it is understandable that
healthcare organizations in Malaysia, like their
counterparts in other countries, are keen to find
ways to better manage service quality. Maximizing
the utilization of the “customer” resource – the
greatest untapped resource in healthcare
(Ferguson, 2000) – is one effective way of
achieving this goal.
The customer factor and organizational
performance
Crosby (1979) and Juran (1988) acknowledged
the customer factor as the foundation of
organizational strategies of service, quality and
reliability management. Peters and Waterman
(1982) identified staying close to customers,
learning their preferences and catering to their
needs as critical success factors differentiating
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
“excellent” companies from those that were not.
Even after the passage of more than a decade, the
customer factor remains relevant, as a business
exists for only one purpose “to serve the customer”
(Boyd, 1997). According to Sewell (1997), serious
deficiencies are likely to occur if there is any
attempt to achieve quality without a full
understanding of the requirements and
expectations of customers. To remain customer-
focused one must review the approach of how
business is managed, i.e. one must begin with
customer problems, needs and priorities, and find
ways to meet them – a U-turn from the traditional
provider-centered paradigm (Walters and Jones,
2001).
Delivering poor quality service and having
dissatisfied customers are antecedents to a number
of critical behaviors (McDougall and Levesque,
2000). These may be in the form of switching
service providers and influencing others in their
perception of quality (Bendall-Lyon and Powers,
2002). Going by Deming’s (1986) philosophy, real
profits do not come from just satisfied customers,
but from loyal customers. Research findings have
shown that companies which managed to retain
just 5 percent more of their customers had an
increased profit of almost 100 percent (Gagliano
and Hathcote, 1994). Moreover, a dissatisfied
customer is likely to tell ten times the number of
people than will a satisfied customer (Gabbott and
Hogg, 1998). As posited by Ovretveit (2000), the
cost of unresolved complaints from dissatisfied
customers for a hospital with 88,000 discharged
patients per year was estimated to be US$4
million. Therefore, it is not surprising that meeting
customer needs and efforts in retaining customers
are priorities for healthcare organizations.
For patients, switching providers could be
detrimental to health, as the cost of disruption or
non-compliance of treatment could directly
impact on healthcare outcomes (Ovretveit, 2000;
Ferguson, 2000), and create psychological trauma
due to dealing with the uncertainty of adjusting to
new service providers (De Ruyter et al., 1998).
There are no statistics available and, as far as we
are aware, no study has been conducted to
quantify the cost of health service failures in
Malaysia. However, typical complaints are long
waiting times, high costs, and unfriendly, apathetic
and uncaring attitudes of staff (Yusoff, 2002).
Service quality components
From the literature, the conclusion can be drawn
that traditional views on service quality
components are generally attributed to a few
authors: Swan and Combs (1976, instrumental
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International Journal of Health Care Quality Assurance
Volume 17 · Number 3 · 2004 · 146-159
and expressive quality); Lehtinen and Lehtinen
(1982, interactive, physical and corporate quality);
Donabedian (1980, structure, process and
outcome); Maxwell (1984, six quality
components, i.e. effectiveness, efficiency,
acceptability, access, equity and relevance); and
Grönroos (1984, technical and functional quality)
are probably the most referenced in the marketing
literature.
These views on service quality dimensions have
also influenced the terms used in health services.
For example, Cunningham (1991) referred to the
dimensions as “clinical quality”, “economic or
finance-driven quality” and “patient-driven
quality”. Cunningham explained that “clinical
quality” is associated with the usage of terms such
as morbidity, mortality and infection rates, while
“economic or finance-driven quality” and
“patient-driven quality” refer to the service aspect
of quality. Ovretveit (2000), preferred the terms
“patient quality”, “professional quality” and
“management quality”. “Patient quality” involves
giving patients what they want, “professional
quality” involves giving them what they need, and
“management quality” involves using the least
resources without error or delays in giving patients
what they want and need.
Based on these frameworks, several models of
service quality have evolved. The most prominent
is Parasuraman et al.’s (1985; 1988) SERVQUAL.
Despite controversies regarding the validity and
reliability of SERVQUAL (Teas, 1994; Newman,
2001), the application of SERVQUAL, with or
without modification, can be found in healthcare.
The extent of modification or addition to the
SERVQUAL dimensions varies from researcher to
researcher. For example, Lim and Tang (2000)
added “accessibility/affordability”; and Tucker
and Adams (2001) “caring” and “outcomes”.
While Johnston (1995) saw the need to increase
SERVQUAL to 18 dimensions, Reidenbach and
Sandifer-Smallwood (1990) deemed it necessary
to reduce it from ten to seven dimensions. Tomes
and Ng (1995), regrouped it into “empathy”,
“understanding of illness”, “relationship of mutual
respect”, “dignity”, “food”, “physical
environment” and “religious needs”.
Apart from the SERVQUAL based models,
Camilleri and O’Callaghan (1998) considered the
following dimensions appropriate: “professional
and technical care”, “service personalization”,
“price”, “environment”, “patient amenities”,
“accessibility” and “catering”. Andaleeb (1998),
in his customer satisfaction determinants model
that explained 62 percent of satisfaction variance,
limited his set of variables to only five, which were
“communication”, “cost”, “facility”,
“competence” and “demeanor”. Walters and Jones
 Hospital service quality: a managerial challenge International Journal of Health Care Quality Assurance
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng Volume 17 · Number 3 · 2004 · 146-159

(2001) identified “security”, “performance”,
“aesthetics”, “convenience”, “economy” and
“reliability”. Hasin et al. (2001) considered
“communication”, “responsiveness”, “courtesy”,
“cost” and “cleanliness” to be relevant.
By and large, the dimensions found in previous
studies do generally fall under those identified by
Potter et al. (1994), which are “technical”,
“interpersonal” and “amenities and
environment”. In addition to the dimensions that
have emerged (i.e. access/waiting time, costs,
outcomes and religious needs), the quality
dimensions available from the literature can be
summarized as follows (see also Table I).
.
technical;
.
interpersonal;
.
amenities/environment;
.
access/waiting time;
.
costs;
.
outcomes; and
.
religious needs.
Linking theory and practice to hospital
service quality
Health care is about meeting the physical,
psychological and social needs of a person who
seeks care. With hospital service quality models,
physical and psychological needs are met, but few
– if any – social needs. Hence, it is only logical to
incorporate the element of social support into the
model to reflect the holistic concept of health (see
Figure 1).
The notion of health service quality could
further be strengthened by the application of
psycho-educational theory in terms of patient
education. From more than 20 years of personal
experience as healthcare workers, we find that
patients often lack the necessary knowledge to
cope with their conditions or illnesses, which often
leads to the perception that service quality is
unsatisfactory. In the present health service quality
model, another dimension is lacking. Like the
social support factor, the usefulness of patient
education in health care is well recognized.
However, its impact on quality perception has
never been studied.
Therefore, the proposed hospital service quality
model would be more complete with the addition
of social support and patient education.
Social component of health service quality:
social support
The positive association of social support to
health, and that social isolation leads to ill health, is
well documented (Standsfeld, 1999). Recent
studies have reaffirmed the inverse relationship
between social support and stress (Turner-Cobb
et al., 2000) and its direct and buffering
mechanisms on health (Standsfeld, 1999). The
increasing popularity of support interventions in
the patient population is underscored by studies
showing significant positive coping behaviors and

Table I Summary of hospital service quality dimensions from selected previous studies
Author/researcher Country Service quality dimensions
Parasuraman et al. (1985) USA Tangibles, reliability, responsiveness, communication,
credibility, security, competence, courtesy, understanding,
access
Parasuraman et al. (1988) USA Tangibles, reliability, responsiveness, assurance, empathy
Reidenbach and Sandifer-Smallwood (1990) USA Patient confidence, empathy, quality of treatment, waiting
time, physical appearance, support services, business aspects
Cunningham (1991) USA Clinical quality, patient-driven quality, economic-driven
quality
Ovretveit (2000) Sweden Client quality, professional quality, management
quality
Tomes and Ng (1995) UK Empathy, understanding of illness, relationship of mutual
respect, religious needs,
dignity, food, physical environment
Andaleeb (1998) USA Communication, cost, facility, competence, demeanor
Gross and Nirel (1998) Ireland Accessibility, structure, atmosphere, interpersonal
Carman (2000) USA Technical aspect (nursing care, outcome and physician care),
accommodation aspect (food, noise, room temperature,
cleanliness, privacy, parking
Camilleri and O’Callaghan (1998) Malta Professional and technical care, service personalization, price,
environment, patient amenities, accessibility, catering
Walters and Jones (2001) New Zealand Security, performance, aesthetics, convenience, economy,
reliability
Hasin et al. (2001) Thailand Communication, responsiveness, courtesy, cost, cleanliness

148
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
Figure 1 Determinants of hospital service quality: a theoretical model
improved quality of life, for example in the
treatment of breast cancer (Chan et al., 2001),
HIV/AIDS (Turner-Cobb et al., 2002), strokes
(Clarke et al., 2002) and schizophrenia (Mueser
and Bond, 2000).
Although the impact of social support is
evidenced across societies and boundaries, it is
especially entrenched in collectivist societies
characterized by traditional extended families, as
opposed to the individualist societies where
nuclear families are the norm. Hofstede (1983)
found evidence that not only was wealth a
determining factor in whether a society was
collectivist or individualist, but the degree of its
collectivism or individualism was as well. That is to
say, the wealthier a society is, the more
individualist are its people; and vice versa for
poverty. Malaysia, although not located at the
extreme of the collectivist scale, is very much
inclined that way – located at 75 along the
100-point scale of collectivism. Wealth being the
determining factor in how closely integrated a
society is means that the status of the society –
whether individualist or collectivist – is not
constant but changeable.
Psycho-educational component of health
service quality: patient education
The literature on psycho-educational theory
points to the fact that the better informed patients
are about their conditions, the better their
treatment outcomes will be, because of realistic
expectations and behavioral modifications
(Ullrich and Vaccaro, 2002). According to
Nemetz and Giarelli (2002), a well-informed
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Volume 17 · Number 3 · 2004 · 146-159
person gains a sense of control, bringing him/her
into the decision-making loop and hence
producing greater satisfaction with the service he/
she receives.
Studies have shown that actual or perceived lack
of information has been identified as a major
dissatisfaction factor for hospitalized patients
(McColl et al., 1996). Leaffer and Gonda (2000)
reported that people who were better informed
and participated more actively in their care were
more satisfied with the treatment they received.
Terry (2001) and Urden (2002) found a high
correlation between patient education regarding
their condition and care and satisfaction with the
overall care. Patient education is thus seen not only
as value-added, but also as a necessary component
of the treatment.
The zone-of-tolerance theory could further
rationalize the need for patient education.
According to Parasuraman (1998), customers have
an implicit range of expectations for each service
attribute that they experience: the range that
customers consider acceptable is referred to as the
“zone of tolerance”. Performance below the zone
will engender customer frustration, and
performance above it will pleasantly surprise
customers and strengthen their loyalty.
Propositions
With justification from the literature, it is
reasonable to suggest that social support and
patient education are factors which are likely to
have a positive impact on patients’ overall
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
perception of quality (OPQ). Therefore, it is
proposed that:
P1. The more social support that patients
receive, the greater their level of OPQ will
be.
P2. The better informed that patients are about
their conditions, the better their level of
OPQ will be.
As for the established quality factors identified
from the literature (religious needs being excluded
as during the consultation stage of questionnaire
development 25 percent of respondents did not
provide comments for this aspect and thus it was
excluded from the study), the propositions are as
laid out below.
Technical or clinical quality in healthcare is
defined on the basis of the accuracy of medical
diagnoses and procedures or conformance to
professional specifications (Lam, 1997). Although
technical quality has the highest priority with
patients, various techniques used in the evaluation
of technical quality are generally not understood or
available to them. Therefore, researchers and
practitioners have resorted to measuring technical
quality by proxy. One such example is the
dimension of “reliability”, as in SERVQUAL
(Parasuraman et al., 1988). The criteria for
measurement encompass the credibility and
professionalism of doctors, the trust placed in
them, and their skill and competence (Van der Bij
and Vissers, 1999). Parasuraman et al. (1985), in
their studies across industries, found that
customers consistently rated the “reliability”
dimension as the most important. Andaleeb
(1998) and Camilleri and O’Callaghan (1998)
reported similar findings in their healthcare
studies. As a result, it is proposed that:
P3. The higher that patients perceive technical
quality to be, the higher will be their level of
OPQ.
Because of their inability to evaluate the “what”
(technical aspect) of quality and their difficulty in
differentiating between the “curing” and “caring”
performances (Gabbott and Hogg, 1998), it seems
inevitable that patients evaluate the “how” of
quality, i.e. the functional aspect of the medical
care process (Lam, 1997). The empathetic
qualities of the practitioner (e.g. being interested,
understanding, listening to and respecting
patients) and the practitioner’s communication
qualities (e.g. imparting information, explaining
choices clearly to patients, and patients being given
the opportunity to discuss and explain issues which
are of concern), are central to influencing
perception (Heskett et al., 1997). Positive
provider-patient interaction in a clinical setting is
considered psychodynamic and therapeutic, with
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International Journal of Health Care Quality Assurance
Volume 17 · Number 3 · 2004 · 146-159
its consequences being increased motivation and
greater satisfaction with the care received (Perla,
2002). Hence, it is proposed that:
P4. The more positive a patient’s perceived
interpersonal quality of hospital staff, the
more positive their level of OPQ will be.
In a service encounter, due to its intangible nature,
customers look for tangible physical evidence such
as environmental design, decor, signage,
equipment, appearance of employees, and the
man-made physical environment surrounding the
service, etc., to form their expectations of service
quality (Solomon, 1985; Sureshchandar et al.,
2002). Variations in the physical environment,
such as noise level, odors, temperature, colors,
textures, and comfort of furnishings, may also
influence perceived performance in service
encounters (Bitner, 1990). It is thus proposed that:
P5. The higher that patients perceive the quality
of the amenities/environment to be, the
higher their level of OPQ will be.
The traditional way of measuring equitable access
to healthcare is proximity to providers, with special
attention directed to getting into the system and
receiving care (Sinay, 2002). In the healthcare
literature, a consistent source of dissatisfaction
with access to seeing a doctor is the length of
waiting times at outpatient departments
(Solomon, 1992; Barlow, 2002), which are often
compounded by an absence of explanation and the
inadequacies of amenities while patients are
waiting (Solomon, 1992). Therefore, it is
proposed that:
P6. The more positively that patients perceive
the quality of access/waiting time, the more
positive their level of OPQ will be.
Cost, or price, also seen as an indicator of quality,
is the amount of sacrifice needed to purchase a
product (Dodds et al., 1991), i.e. the more
expensive the product/service, the higher the
expectations of it. The cognitive tradeoff between
perceptions of quality and sacrifices results in
perceptions of value (Ravald and Grönroos, 1996).
It is hence proposed that:
P7. The more that patients perceive a service to
be value for money, the greater their level of
OPQ will be.
Outcomes in health care are immensely complex
and, according to Lohr (1988), are represented by
five Ds, i.e. death, disease, disability, discomfort
and dissatisfaction. Different illnesses have
different outcomes. Nonetheless, even with the
same illnesses, people differ by their age, general
health, etc., and hence, outcomes cannot be
exactly the same (Leonard et al., 2001). Therefore,
outcome indicators can be patient’s self-reported
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
symptoms, functional status and quality of life
(Deyo, 2000). In general, opinions formed about
change in condition or status attributable to
service providers are interpreted as outcomes by
patients (Tucker and Adams, 2001). While clinical
care is what patients seek, the outcome of care is
what matters. Consequently, it is proposed that:
P8. The more positive that patients perceive the
outcomes of their treatment to be, the more
positive their level of OPQ will be.
Research method
Triangulation methods were used, with structured
survey questionnaires providing the main bulk of
quantitative data and unstructured interviews
together with observations providing the
supplementary qualitative data. To maximize the
return rate, this research took advantage of the
positive features of the abovementioned methods,
i.e. face-to-face requests for participation,
utilization of self-administered structured
questionnaires, and on-the-spot collection. The
researcher also took the “native” environment
opportunity (Geertz, 1973) to observe and
conduct some face-to-face interviews, albeit very
brief. Given the circumstance that most
discharged patients were very anxious to get home,
no in-depth interview was possible and neither was
it necessary for the type of study undertaken at this
stage.
Instrument development
In the interest of validity and reliability,
“questionnaire-plagiarism” is highly
recommended in social research (Sudman and
Bradburn, 1987). However, since this research was
not an exact replication of any previous studies, no
such opportunity arose. Nevertheless, in ensuring
construct validity, we heeded the advice given by
Easterby-Smith et al. (1991), i.e. “to borrow items
and portions of questionnaires from other sources,
especially when a lot of prior questionnaire-based
research exists into concepts . . .” (p.121). Hence,
an eclectic approach to selecting items measuring
the established dimensions from previous research
was adopted (e.g. from Reidenbach and Sandifer-
Smallwood, 1990; Parasuraman et al., 1988;
Tomes and Ng, 1995; Carman, 2000; Tucker and
Adams, 2001; Di Paula et al., 2002).
While academics assisted in assessing face
validity, the hospital quality professionals verified
content validity. The final questionnaire was pre-
tested on 28 patients in the two hospitals where the
actual study was conducted. There were no special
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Volume 17 · Number 3 · 2004 · 146-159
selection criteria for the pre-test samples other
than being discharged and waiting to go home
when pre-tests were carried out. As Cronbach’s
alpha for each of the variables was all above the
minimum of 0.7 (see Tables II-IV) suggested by
Nunnally (1978), the instrument was therefore
considered to be stable and consistent.
The final version questionnaire had a total of 72
items measuring nine constructs (eight
independent and one dependent) and an open-
ended question soliciting qualitative data, stating
“Are there any other comments that you would like
to make?” We are aware of the problems of lengthy
questionnaires, which may deter participation.
Nonetheless, as the intention was to maximize the
validity of the study and a researcher/assistant was
be there to explain it to the patients in person, it
remained unchanged.
Response scale
A ten-point scale with 1 being “strongly disagree”
and being 10 “strongly agree” was used. The type
of statistical analysis required for this study (i.e.
multiple regression analysis) dictated the use of an
interval scale, one which guaranteed that the
distances between adjacent numbers were the
same and had no true zero (Sapsford, 1999).
Therefore, the anchors of scale points were limited
to the extremes without having any between. As
advised by Allen and Rao (2000), calculating
means and standard deviations are “highly
suspect” if ordinal-level scales are used.
A ten-point scale was chosen for three main
reasons. First, from talking to patients during the
fact-finding stage of the research, it was discovered
that patients were more used to rating things based
on a scale of 100. Typically, they gave ratings in
terms of percentages or points, e.g. 80 percent or
80 points. Shrinking the scale to 10 did not seem to
cause much difficulty to them, but other scales
(e.g. 5, 7 or 9) needed more explanation. Further,
for a narrow scale there are low levels of
intercorrelation and limited variance (Allen and
Rao, 2000; Sekaran, 2000). This was particularly
important for this study, with variance explanation
being the main concern.
Sample
As only one private hospital granted us access, to
balance representation only one public hospital
was studied. Since the location of the private
hospital is strategically in the city center of Kuala
Lumpur, a similarly positioned public hospital was
used. The private hospital has 264 beds in seven
wards, with various diagnostic facilities treating a
variety of illnesses. The public hospital has 2,502
beds and 89 wards. It is the biggest and probably
 Hospital service quality: a managerial challenge International Journal of Health Care Quality Assurance
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng Volume 17 · Number 3 · 2004 · 146-159

Table II Descriptive statistics, zero-order correlations and Cronbach’s a: overall sample

Variables x̄ s 1 2 3 4 5 6 7 8 9
Overall quality (5) 7.76 1.55 0.94
Social support (11) 6.70 1.80 0.72 0.93
Patient education (10) 8.05 1.52 0.78 0.67 0.92
Technical (8) 8.03 1.47 0.85 0.73 0.80 0.85
Interpersonal (11) 8.26 1.45 0.82 0.68 0.80 0.81 0.94
Amenities/environment (7) 7.25 1.66 0.65 0.63 0.54 0.59 0.64 0.84
Access/waiting time (8) 7.24 1.57 0.73 0.65 0.67 0.70 0.72 0.70 0.81
Cost (6) 6.78 2.11 0.46 0.36 0.42 0.44 0.47 0.30 0.35 0.88
Outcomes (6) 7.80 1.50 0.74 0.60 0.77 0.74 0.76 0.50 0.62 0.51 0.90
Notes: Figures in parentheses are the number of items measuring each construct; figures in italics are Cronbach’s a; zero-order
coefficients p , 0.0014 (Bonferroni significance); all other coefficients p , 0.05

Table III Descriptive statistics, zero-order correlations and Cronbach’s a: public hospital sample
Variables x̄ s 1 2 3 4 5 6 7 8 9
Overall quality (5) 7.64 1.62 0.94
Social support (11) 6.34 1.88 0.75 0.93
Patient education (10) 7.96 1.57 0.76 0.66 0.92
Technical (8) 7.93 1.51 0.84 0.76 0.75 0.85
Interpersonal (11) 8.18 1.50 0.79 0.68 0.77 0.77 0.94
Amenities/environment (7) 6.92 1.81 0.71 0.64 0.59 0.64 0.68 0.84
Access/waiting time (8) 7.13 1.70 0.71 0.65 0.66 0.68 0.69 0.75 0.81
Cost (6) 7.82 1.74 0.55 0.51 0.49 0.49 0.57 0.51 0.50 0.88
Outcomes (6) 8.05 1.42 0.70 0.58 0.72 0.68 0.75 0.56 0.62 0.54 0.90
Notes: Figures in parentheses are the number of items measuring each construct; figures in italics are Cronbach’s a; zero-order
coefficients p , 0.0014 (Bonferroni significance); all other coefficients p , 0.05

Table IV Descriptive statistics, zero-order correlations and Cronbach’s a: private hospital sample
Variables x̄ s 1 2 3 4 5 6 7 8 9
Overall quality (5) 7.88 1.46 0.94
Social support (11) 7.07 1.65 0.69 0.93
Patient education (10) 8.14 1.48 0.80 0.68 0.92
Technical (8) 8.13 1.43 0.85 0.71 0.86 0.85
Interpersonal (11) 8.34 1.39 0.85 0.69 0.83 0.86 0.94
Amenities/environment (7) 7.58 1.41 0.55 0.58 0.48 0.54 0.60 0.84
Access/waiting time (8) 7.73 1.35 0.75 0.62 0.69 0.73 0.75 0.60 0.81
Cost (6) 5.70 1.92 0.61 0.59 0.55 0.61 0.59 0.45 0.58 0.88
Outcomes (6) 7.94 1.57 0.80 0.66 0.82 0.80 0.79 0.47 0.68 0.59 0.90
Notes: Figures in parentheses are the number of items measuring each construct; figures in italics are Cronbach’s a; zero-order
coefficients p , 0.0014 (Bonferroni significance); all other coefficients p , 0.05

the best equipped in terms of treatment modalities,
though may not be so in terms of basic amenities.
In spite of the fact that each of the hospitals had
their own first, second and third class wards, the
charges levied were different. The patients in the
private hospital paid in full for the services they
received, and the patients in the public hospital
paid only a nominal amount, especially those in
third-class wards.
A systematic random sampling procedure was
followed. The target of 500 respondents, in
accordance with the recommendation by Hair et al.
(1998), was reached over a two-month period.
This sample size was finally settled on because for
152
the multiple regression stepwise procedure
required for this study, a ratio of 50 cases to 1
independent variable was necessary.
While the samples for the questionnaire survey
were systematic-randomly chosen, the 30
interviewees were convenient samples (18 from the
private hospital and 12 from the public hospital).
As the study involved two sampling frames of
unequal size, to ensure a proportionate
quantitative representation it was necessary to take
a different ratio of samples for each group, i.e.
every second patient in the discharged population
for the private hospital and every eighth for the
public hospital. Bearing in mind the problem of
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
poor responses with postal surveys, it was decided
to wait – discreetly – while respondents were
completing the questionnaires. The researcher and
assistant only administered to patients who
required assistance.
The questionnaire was to be completed after
discharge from hospital was ascertained, but
before actual physical departure. Although
discouraged from doing so, there were patients
who preferred to complete the questionnaire at
home. In such circumstances, a stamped
addressed envelope was used.
Analysis
While qualitative data were categorized into
themes that coincided with the eight quality
dimensions identified, quantitative data were
subjected to various statistical analyses. Factor
analysis was carried out, and it was found that
measures loaded as expected on the selected
constructs. Stepwise regression, a method by
which each predictor variable is selected for
inclusion in the model based on the significance of
t-statistics in a step-by-step selection, was chosen
based on the premise that multicollinearity, which
is a common problem in multiple regression, could
be somewhat circumvented (Allen and Rao,
2000).
In this study, default a of 0.05 is used to
determine the level of significance. However, for a
Pearson matrix consisting of 36 comparisons based
on the Boferroni method (Green et al., 2000),
a p-value of less than 0.0014 (0.05/36) was used
for significance. This serves as a protective
measure against the risk of committing type-1
error.
Tables II-IV contain summary statistics,
Cronbach’s alphas and zero-order correlation
matrix for the variables under study.
Results
In total, 491 usable questionnaires were collected
on the spot (247 from the public hospital and 244
from the private hospital). Of the 18 patients who
requested to take the questionnaire home (three
from the public hospital and 15 from the private
hospital), four returned their questionnaires (three
from the public hospital and one from the private
hospital). The questionnaire returned by the
patient from the private hospital was disqualified
due to data being missing from the whole of page
six. Of the three questionnaires returned from the
public hospital, all were complete and usable. The
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International Journal of Health Care Quality Assurance
Volume 17 · Number 3 · 2004 · 146-159
total number of usable questionnaires for the
public hospital was 250, whereas from the private
hospital it was 244. However, during the “feel for
data” stage, case no. 233, which had extreme
values, had to be eliminated as being
unrepresentative. Hence, the number of usable
samples was reduced to 493 (250 from the public
hospital and 243 from the private hospital). The
public hospital postal return rate was 100 percent
and the private hospital postal return rate was 6.6
percent. The average return rate was 22.2 percent.
It was felt that the samples were representative of
the patient populations for the respective areas
studied.
All except 16 respondents (3.2 percent) were
Malaysians. Of these, 14 were from the private
hospital. The difference in mean scores between
Malaysians and non-Malaysians for the quality
factors was insignificant (t , 2:0, p . 0:05).
Of the respondents, 39.8 percent were male and
60.2 percent were female. The majority were aged
31-50 years (43.8 percent), followed by 18-30
years (30.6 percent), 51-65 years (11.8 percent),
.65 years (8.1 percent), and , 18 years
(5.7 percent). Even though the respondents in the
two healthcare facilities were quite homogeneous
in their personal characteristics, e.g. age group
(x2 ¼ 7:697, df ¼ 4, p ¼ 0:103), gender
(x2 ¼ 3:813, df ¼ 1, p ¼ 0:051) and marital status
(x2 ¼ 6:790; df ¼ 3, p ¼ 0:079), they were
significantly dissimilar socio-economically. They
differed in educational level (x2 ¼ 84:896; df ¼ 6,
p ¼ 0:0005), income (x2 ¼ 113:749; df ¼ 6,
p ¼ 0:0005), employment status (x2 ¼ 16:981;
df ¼ 4, p ¼ 0:002), bed status distribution
(x2 ¼ 65:396; df ¼ 2, p ¼ 0:0005), and sources of
hospital bill payment ðx2 ¼ 99:999; df ¼ 5,
p ¼ 0:0005), areas in which respondents attending
the private facility were consistently noted to enjoy
a comparative advantage.
The findings indicate that the patients were on
the whole quite satisfied with the quality of services
they received. Going by the variable means,
ranging from the highest to the lowest, the rank
ordering of the samples is as summarized in
Table V.
The two groups converged in dividing the eight
quality dimensions into two distinct categories, i.e.
one category that consists of interpersonal,
technical, patient education and outcomes factors,
and the other category that consists of amenities/
environment, access/waiting time, social support
and cost factors. The items of the first category are
noted to have a direct link to the treatment aspect
of care, whereas the link of items in the second
category is less direct but more tangible in nature.
This means that the important core needs of
 Hospital service quality: a managerial challenge International Journal of Health Care Quality Assurance
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng Volume 17 · Number 3 · 2004 · 146-159

Table V Rank ordering of variable means for public and private hospitals
Interpersonal Patient education Technical Outcome Access/waiting time Amenities/environment Social support Cost
Public 1 (8.18) 3 (7.96) 4 (7.93) 2 (8.05) 6 (7.13) 7 (6.92) 8 (6.34) 5 (7.82)
Private 1 (8.34) 2 (8.14) 3 (8.13) 4 (7.94) 5 (7.73) 6 (7.58) 7 (7.07) 8 (5.70)

patients have been met in both hospitals, but to a Table VII Estimates of coefficients for the public hospital model
lesser degree for their “hygiene” needs. Quality dimension b se b p
Except for the cost dimension, it was apparent Constant 20.174 0.285
that the private facility received higher scores. Technical 0.434 0.060 0.404 ,0.000
Nonetheless, the only significant differences were Amenities/environment 0.163 0.038 0.183 ,0.000
for access/waiting times (z ¼ 3:839, p ¼ 0:0005), Patient education 0.159 0.051 0.154 ,0.002
amenities/environment (z ¼ 3:889, p ¼ 0:0005), Interpersonal 0.162 0.059 0.150 ,0.006
social support (z ¼ 4:231, p ¼ 0:0005), and cost Social support 0.103 0.041 0.120 ,0.013
(z ¼ 211:219, p ¼ 0:0005). Dimensions that were Notes: R = 0.891; R2 = 0.794; adj. R2 = 0.790; F = 188.034; sig. F = 0.0005
rated similarly were OPQ (z ¼ 21:341,
p ¼ 0:180), interpersonal (z ¼ 20:935,
p ¼ 0:350), outcomes (z ¼ 20:570, p ¼ 0:568), Table VIII Estimates of coefficients for the private hospital
technical (z ¼ 21:477, p ¼ 0:140) and patient model
education (z ¼ 21:078, p ¼ 0:281). Quality dimension b se b p
The three regression models – overall, public Constant 20.158 0.268
and private – each yield about 79 percent of Technical 0.331 0.063 0.323 ,0.000
explanatory power in the overall perception of Interpersonal 0.311 0.066 0.297 ,0.000
quality by patients. The overall model Outcomes 0.192 0.048 0.207 ,0.000
(R2 ¼ 0:792, Table VI) consists of seven quality Access/waiting time 0.159 0.050 0.147 ,0.002
factors, i.e. technical quality, interpersonal quality, Notes: R = 0.896; R2 = 0.802; adj. R2 = 0.799; F = 241.508; sig.
access/waiting time quality, outcomes quality, F = 0.0005
amenities/environment quality, patient education
quality, and social support quality. The public
hospital model (R2 ¼ 0:790, Table VII) is made up quality dimensions are greater than 0.8, they do
of five quality factors (i.e. technical quality, not account for any variance coefficient of 0.90 or
amenities/environment quality, patient education above. Therefore, there are no serious collinearity
problems among the predictor variables for the
quality, interpersonal quality, and social support
three models. Consequently, it is reasonable to
quality), while the private hospital model
conclude that the models are fairly stable.
(R2 ¼ 0:799, Table VIII) has only four quality
factors (i.e. technical quality, interpersonal quality,
outcomes quality, and access/waiting time
quality). The full models for each of the three Discussion
samples have large F statistics with significance of
p , 0:001 significance. The technical quality factor emerged forcefully in
Although the adjusted R2 values for the models are all three models. Without doubt, it is the most
quite high, the condition index (, 30), the important determinant of service quality for the
tolerance statistics (. 0.1) and variance inflation two hospitals. This finding is consistent with what
factors (, 10) are within the acceptable range. was found by other researchers (e.g. Parasuraman
While the zero-order correlations for some of the et al., 1988; Grönroos, 1984; Cunningham, 1991;
Gabbott and Hogg, 1998; Carman, 2000), i.e. that
Table VI Estimates of coefficients for the overall model in any kind of service transaction, technical quality
is what patients seek. In the case of hospital
Quality dimension b se b p
service, this is clinical quality. This also explains
Constant 20.343 0.199
the assertions made by several private hospital
Technical 0.389 0.045 0.370 ,0.000
respondents that their choice of hospital was not
Interpersonal 0.188 0.046 0.176 ,0.000
influenced by the quality of service, but rather
Outcomes 0.120 0.037 0.116 ,0.001
where their chosen doctors were based. Given the
Access/waiting time 0.096 0.034 0.097 ,0.005
Amenities/environment 0.082 0.027 0.088 ,0.005
fact that several respondents in the private facility
Social support 0.081 0.028 0.087 ,0.008 still questioned the competency of nurses, despite
Patient education 0.075 0.041 0.080 ,0.049 giving a higher rating to technical quality (mean
score 8.13), this indicates that clinical quality is a
Notes: R = 0.892; R2 = 0.795; adj. R2 = 0.792; F = 269.183; sig. F = 0.0005
“one-dimensional” attribute, as well as indicating
154
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
the respondents” high level of expectation.
Conversely, judging by the fairly high mean score
of 7.93 and the absence of comments – in
particular positive comments – from patients in
the public hospital, clinical quality is the “must be”
attribute for this group of patients.
Interpersonal quality also surfaced in the three
models, although the sequence of importance is
slightly different. Interpersonal quality places
second in both the overall model and the private
hospital model, but fourth in the public hospital
model. This result is also in line with previous
findings that the human dimension has been seen
as among the most important after technical
quality in overall quality perception (e.g.
Milakovich, 1995; Oswald et al., 1998). The fact
that interpersonal quality is second in importance
in the private hospital model could indicate a
higher level of psychological needs in these
patients. The very high mean score of 8.34 for the
private hospital, as compared to 8.18 for the public
hospital, supports Blizzard’s (2003) contention
that smaller hospitals are in a better position to
deliver such “high touch” care than larger
hospitals. However, in the public hospital model,
amenities/environment quality replaces
interpersonal quality as the second most important
attribute. Qualitative data also revealed the lower-
level needs of these patients, such as more toilets
and fans to help keep the heat down and the
mosquitoes away. Therefore, while basic needs
have been at least somewhat met for the patients in
the private hospital, they are not met to the same
extent for patients in the public hospital. This was
also evidenced by the fact that the amenities/
environment factor received the most negative
comments from the public hospital patients as well
as being rated the second lowest (mean score
6.92).
Another difference between the public and
private models is the exclusion of patient
education and social support factors. Perhaps
socio-demographic variables (e.g. being more
affluent and better off socio-economically) could
rationalize this difference. Being better educated,
and hence having better access to information,
enables patients in the private hospital to be better
informed with regard to their health problems.
Thus, the need for health education for private
hospital patients is not as significant. The same
goes for the need for social support, i.e. in the
process of migrating to Kuala Lumpur the private
hospital patients become more “individualist”,
shedding their “collectivist” tradition. What is
more, their home-away-from-home circumstances
inadvertently make them accustomed to the
“modern” pattern of nuclear family living.
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The socio-economic mediating contention is
reinforced by the inclusion of outcomes and
access/waiting times in the private hospital model.
The zone-of-tolerance theory could perhaps
validate the lower mean score given to the
outcomes factor by patients in the private facility
(private mean score ¼ 7:94, public mean
score ¼ 8:05). Also, being better informed and
raising the expectation threshold may give rise to
behaviors which appear demanding, such as the
expectation that discharge procedures will be
completed within minutes of the decision to
discharge being made. Further to being the source
of many negative comments, personal observations
revealed that some of the discharged patients were
agitated and impatient. Fear of having to pay more
could be a factor behind anxiety to leave the
hospital most instances. Indeed, some patients
explicitly expressed this sentiment during
interviews.
Further to the socio-economic rationalization,
the fuzziness and high expectations of private
hospital patients could be the consequence of
wanting a more balanced exchange relationship
considering the financial sacrifice they make. This
assumption could explain the bitterness exhibited
by some patients concerning negligible parking
charges and their requests for additional facilities
such as telephones, microwave ovens and fridges
for individual rooms, softer pillows, and that
“ward cleaning should be at least four times per
day”. The most acute problem found in the public
hospital was the waiting lists for clinic
appointments waiting times in the clinics
themselves. With the high volume of patients that
the public hospital handles, these findings are not
surprising. The problems of waiting times for
seeing doctors seems universal, as noted by Lim
and Tang (2000) and Naumann and Miles (2001).
While the social support and amenities/
environment factors elicited amongst the least
satisfaction for both hospitals, they are expected to
have lesser implications for the private hospital
because of their lack of impact on the overall
quality perception, as demonstrated in the
regression model. On the other hand,
improvement in these areas in the public hospital
would be certain to influence overall perceptions of
quality.
One unexpected finding is that the cost
dimension is insignificant in influencing quality
perception. This discovery contradicts the findings
of Andaleeb’s (1998) five-factor model study,
which showed cost to be third in importance after
the technical and interpersonal dimensions of
quality. One explanation for the findings of this
study could be that cost was neither an “attractive”
nor a “one-dimensional” quality attribute, but a
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
“must be” attribute that patients take for granted
when such a need is fulfilled, as is the case for
patients in the public hospital towards their
negligible hospital charges. This is certainly true if
the conspicuous absence of any positive comments
concerning cost is anything to go by. As for the
private hospital, could the cost factor serve to
boost patients’ social esteem needs? It is worth
noting that the majority (56.4 per cent) of private
hospital patients had their hospital charges paid for
by third parties (i.e. by an employer or by medical
insurance).
In summary, although the two hospitals are only
kilometers apart, it is rather startling to find such
stark contrasts in the characteristics, needs and
expectations of the patient populations they serve.
Our findings reinforce the point that in order to
manage quality, one must learn and fully
understand the expectations, preferences and
requirements of customers. Customization of
services according to requirements should be the
motivation and challenges facing health service
providers today.
Managerial implications
At the ministerial level, it is important that those
involved in setting standards and allocating
resources are aware of the priorities required by
hospitals in meeting the needs of their patients.
Furthermore, they should continue with
investment policies in promoting health and
educating the public on health matters so as to
reduce dependence on hospital services. Easing
depedence will result in more resources being
available, and thus in a better quality service for
those who require it.
For the public hospital, apart from improving
basic amenities, reducing waiting times for
appointments through additional resources would
necessitate a massive injection of funds. However,
measures to reduce patient readmission would be
one way of helping to ease dependency on the
service, and patient education is one such
measure. Hence, there is a need to train hospital
staff to educate patients about important aspects of
their care, such as the nature of disease, ways to
cope with their condition, prognosis, and what or
how much can be done about their problems. The
social support factor is another area that deserves
attention. This aspect of quality can be facilitated
through having relevant policies in place and
making the required amenities available, such as
the implementation of a free visiting policy, a
common room to encourage socialization, and – if
feasible – allowing long-term patients a break in
their own homes, if they wish.
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For the private hospital, as well as making a real
effort to expedite discharge procedures,
communication should be the link in expanding
the tolerance threshold by keeping patients well
informed as to what to expect. This should start at
the earliest available opportunity. As for many
patients the choice of hospital was based on loyalty
to medical practitioners rather than to the hospital
per se, obtaining and maintaining high-quality
medical practitioners and continued investment in
high technology would be logical moves to keep up
with expectations. Nonetheless, enhanced
perception could benefit from some morale
boosters and incentives, such as concessionary
parking charges. While reducing charges would no
doubt lead to a higher volume of patient turnover,
the simultaneous loss of niche market
characteristics is a point to consider. Undoubtedly,
patients who rely on the cost factor for their esteem
needs would look for another service provider to
fulfill such needs. If maintaining the status quo is
the desired option, the adverse impact of cost on
overall quality perception is minimal, if the finding
of regression model is to be applied. Therefore, it is
the prerogative of hospital management to
determine their goals and to align their strategies
accordingly.
Whether to improve on “high tech”, “high
touch” or the zone of tolerance, the education and
training of employees should be a priority in
preparing them to handle customers in a true
people-based service industry.
Limitations of the study
The respondents in this study were limited to
patients from one public and one private treatment
facility in the most urban setting in Malaysia. The
patients who visited these facilities were highly
likely to be more affluent than the Malaysian
society at large. This was certainly true for the
private facility, where the patients tended to be of
higher socio-economic status and educational level
than the general public. Therefore, since the
findings of the present study were determined
under a specific set of conditions in which not
every sector of society was represented, it should
be cautioned that generalization may not be
possible beyond the actual setting of the study. As
such, the findings will have to be taken in the
context in which they are presented. Given the
distinctive hospital setting, and without further
studies, the present findings are not generalizable
to other service industries.
 Hospital service quality: a managerial challenge
Raduan Che Rose, Jegak Uli, Mohani Abdul and Kim Looi Ng
Some suggestions for future research
To ensure representativeness, the study should be
replicated to cover a bigger sampling frame, and
the results should be compared to those found in
this study.
If this study is replicated, the research should
focus on identifying the exact relationship of
overall perceived quality with social support,
patient education, costs, outcomes, access/waiting
time and amenities/environment, taking into
consideration factors such as gender, age,
ethnicity, level of education, personal income, and
other socio-economic factors which are relevant to
society at large. The qualitative element may need
to be expanded to facilitate a more in-depth
understanding of the dynamics involved.
While it is implied that the cost factor could
actually serve to boost the esteem and status needs
of some patients, this hypothesis requires
exploration.
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