Impact of deficient healthcare service quality

Purpose – This paper seeks to look at healthcare service quality from the viewpoint of its negative impact on the industry when there is a deficiency in the delivery of service quality. To measure this impact, the potential loss of customers due to poor quality service is measured. A potential customer loss model is proposed. To address the competitive and financially driven healthcare delivery business, a three‐pillar approach, termed the Excellent Healthcare Service Model (EHSM), is introduced. This approach advocates that the healthcare industry should use a system view to deliver quality healthcare by taking into account quality, cost, and efficiency factors in a holistic manner. Design/methodology/approach – In this paper a survey questionnaire was used to gather data necessary to compute impact of deficient healthcare service. The questionnaire was administered to a sample of 400 people and the survey method used was intercept interview. Customer loss and potential customer loss due to deficient service were computed. Findings – In this paper, findings from the research indicated that, in the healthcare industry, for every 100 customers that experienced deficient service, about 70 customers would be unlikely to patronize the same organization again. In addition, for the same 100 customers who have experienced deficient service, about 75 of them will go on to tell on average nine family members and friends about their experiences. Through word of mouth from these 75 dissatisfied customers, there will eventually be about 465 persons who might have been potential customers but will probably not patronize the organization at all based on what the dissatisfied customers have told them. Practical implications – The ideas presented in this paper provide a new way of looking at service quality performance, through the impact of deficient service. With this knowledge, economic impacts of poor service quality could easily be quantified, and such economic‐based results are usually a better motivator for managers and workers to deploy quality improvement initiatives. Originality/value – The results and ideas presented in this paper are valuable for the healthcare industry. It provides an alternative approach to quantify service quality performance. The paper also proposes a system‐based approach to enhance service process performance.