An approach to maximize hospital service quality under budget constraints

Abstract This study proposes a mathematical method for evaluating the quality of hospital services, and it intends to provide the top management with a systematic means and scientific tool to quantify and improve the service quality from the customers' satisfaction perspective. In order to manage effectively the quality, the authors identify and assess the key elements of the hospital service quality, and quantitatively establish the relationship between the sufficiency of the service provided and the level of satisfaction, and between the sufficiency of the service and the amount of the monetary investment. The quality of medical service can be categorized into three types, namely, the must-be element, one-dimensional element and additional element. Satisfaction resulting from each of the three elements induces a different cost to the organization; thus, management should decide which element needs to be greatly allocated or slightly allotted. Traditional approaches emphasize qualitative techniques, such as questionnaire survey and personal interview. The model proposed in this study is able to determine how much budget must be allocated to each quality element in order to maximize the customer satisfaction, and the results indicate that the model can be a good means for maximizing customer satisfaction under budget constraint.