Health Policy 53 (2000) 25–37

Service quality in public and private hospitalsin urban Bangladesh: a comparative study

Syed Saad Andaleeb *School of Business, The Pennsyl6ania State Uni6ersity at Erie, Station Road, Erie,

PA 16563-1400, USA

Received 11 September 1999; accepted 14 March 2000

Abstract

This study compared the quality of services provided by private and public hospitals inurban Bangladesh. Using twenty-four scale items, patient perceptions were sought on fiveaspects of service quality including responsiveness, assurance, communication, discipline andbaksheesh. Because private hospitals are not subsidized, it was felt that the incentivestructure would induce them to provide better services than public hospitals on the measuresof service quality. This contention was largely supported. The results also indicated that bothgroups have room for improvement. © 2000 Elsevier Science Ireland Ltd. All rights reserved.

Keywords: Service quality; Hospitals; Comparative

www.elsevier.com/locate/healthpol

1. Introduction

Appropriate health care strategies are vital to the ability of Third Worldcountries to achieve other development objectives. While not a sufficient conditionfor development, it is important to recognize that a healthy population is betterdisposed to achieve the productivity increases that are needed to sustain continuedgrowth in other sectors of the economy.

In Bangladesh, unfortunately, the health care delivery system is besieged with avariety of problems that signal an impending crisis. With a burgeoning populationand the low level of investment in the health care sector, service quality, especially

* Tel.: +1-814-8986431; fax: +1-814-8986223.E-mail address: ssa4@psu.edu (S.S. Andaleeb).

0168-8510/00/$ - see front matter © 2000 Elsevier Science Ireland Ltd. All rights reserved.

PII: S0168 -8510 (00 )00077 -4

S.S. Andaleeb / Health Policy 53 (2000) 25–3726

in the public hospitals seems to have deteriorated markedly as reported withincreasing frequency in the popular media. To avert any major crisis or to halt anyfurther deterioration in health care delivery, two major strategic goals — increasingaccess and improving quality — must be pursued vigorously and relentlessly toimprove the nation’s capacity to deliver better health care services.

A review of the literature suggests that some attention has been devoted to thequestion of access. Perhaps gauging the growing problems in public health caredelivery, the Government of Bangladesh envisaged a greater role for the privatesector as early as 1982 by promulgating the Medical Practice and Private Clinicsand Laboratories Ordinance. By June 1996, a total of 346 private hospitals andclinics with more than 5500 beds were registered with the Directorate of Hospitalsand Clinics [1].

In addition, according to the Health Economics Unit of the Ministry of Healthand Family Welfare [2], the proportion of GDP allocated to the health andpopulation sectors was more than doubled between 1985/86 to 1994/95 from 0.6 to1.3%. A significant proportion of this allocation was earmarked for primary healthcare. While these allocations are encouraging and seem to have had a favorableimpact on major demographic indicators such as crude birth rates, crude deathrates, infant mortality rates, and total fertility rates, the perceptions that peoplehave regarding the country’s health care system remains to be assessed. Thisassessment is important because perceptions have behavioral implications. In fact,given present conditions, patients’ experiences with the country’s health care systemmight actually reinforce negative perceptions about the system. For example, evenwith the increased allocation to health care, access to the system continues to beproblematic and is evident from a variety of indicators: Critical staff are absent,essential supplies are generally unavailable, facilities are inadequate, and the qualityof staffing is poor. Problems of supervision and accountability exacerbate theproblems, while corrupt practices seem to be on the increase as media reportsindicate. The question of access thus remains an open issue as severe resourceconstraints continue to plague the health sector. Considering that populationgrowth rate in Bangladesh will place additional demands, the capacity of theexisting health care delivery system is clearly inadequate to the task of providingproper health care services to its constituencies.

What should be of greater concern, however, is that even if the problems ofaccess were to be substantially alleviated, it would still not guarantee full utilizationof the health care system if the quality of services is compromised. In Nepal, forexample, the Government made substantial investments in basic health care; yet,utilization remained low because of clients’ negative perceptions of public healthcare [3]. In Vietnam, poor service in the public sector led to increased use of privateproviders [4]. These instances suggest that the role of quality must be understoodbetter and given greater attention. In fact, problems with quality in health care maybe responsible for a rather disquieting and disconcerting trend that has begun tosurface in Bangladesh: large numbers of the afflicted, especially those who needsecondary and tertiary care, seem to be seeking health care services in othercountries. While these people generally represent the well-to-do class, others are

S.S. Andaleeb / Health Policy 53 (2000) 25–37 27

also beginning to join the exodus. This loss of confidence in the ability of the healthcare system to meet their needs is largely a reflection of the quality problems thatare perceived by users of the system. The implications are also grave. Primarily, itplaces inordinate demands on the country’s foreign exchange reserves; their deploy-ment in other sectors is thus severely curtailed. A longer term threat looming in thehorizon is that the current exodus could influence even more people to abandon thehealth care system in Bangladesh as they gain access to information about thequality of health care services in other countries. Because of these trends, andbecause the perceived quality of health care in the country can aggravate thesetrends, this paper sets out to examine the quality of health care services provided bypublic and private hospitals in Bangladesh. Two propositions are explored in thepaper:1. The quality of services is likely to be better in private hospitals than in public

hospitals because of the incentive structure. In other words, because privatehospitals must fend for themselves, they will provide better services to retainclient loyalty. These pressures do not affect hospitals in the public sectorbecause their operations are guaranteed by the taxpayer and because there areno incentives for them to do any more than what is minimally required.

2. The overall quality of services in both types of hospitals has room for improve-ment as evidenced by the outflow of patients to other countries.

The assessment of quality, however, can be challenging. For example, Weitzman[5] indicates that health care quality can be defined in relationship to: (1) thetechnical aspects of care; (2) the interpersonal relationship between practitioner andpatient; and (3) the amenities of care. In addition, it is also important to specifywho will assess quality and on what criteria. While, historically, quality standardshave been established and assessed by those in the medical profession, patients’assessment of quality care has begun to play an important role in recent years. Inthis regard, Petersen [6] suggests that it is not important if patients are right orwrong, what is important is how they felt even though the caregiver’s perception ofreality may be quite different. If patients are not convinced that selected hospitalscan deliver quality services, they will seek the services elsewhere — most likely inother countries if it is within their means. Thus it is important to ask patientsdirectly about the perceived quality of services provided by the country’s hospitals.

Regarding the criteria for assessing service quality, some guidelines have beenestablished in prior research. For example, the SERVQUAL framework, firstproposed by Parasuraman et al. [7–9] has guided numerous studies in the servicesector. However, empirical support for the proposed framework and the measure-ments has not always been very strong. Not surprisingly, the SERVQUAL modeland its measures have been widely debated [10–12]. In the context of hospitals,Reidenbach and Sandifer-Smallwood [13] have shown the existence of measurementproblems with SERVQUAL.

The Bangladesh context of this study suggested the need to include additionalcontextual variables to establish service quality criteria and their measures. Qualita-tive interviews provided support to this contention and concepts such as baksheesh(service for extra compensation, i.e. questionable payments) and discipline (a sense

S.S. Andaleeb / Health Policy 53 (2000) 25–3728

of order) were included in assessing perceptions of service quality. Consequently,instead of confining the study to the theoretical structure and measures suggestedby the SERVQUAL framework, an alternate framework was adopted in this study.The key concepts are described next. Then the research method is explained,followed by the findings and conclusions.

2. Conceptual framework

The proposed core components of hospital service quality in Bangladesh are asfollows.

2.1. Responsi6eness

The literature identifies responsiveness as an important component of servicequality and characterizes it as the willingness of the staff to be helpful and toprovide prompt services. Six items were used to delineate and measure the construct(see Table 1).

2.2. Assurance

Assurance is defined as the knowledge and behaviors of employees that convey asense of confidence that service outcomes will match expectations. Six items wereused to measure this construct to reflect competence, efficiency, and the correctnessof services provided to clients (see Table 2).

2.3. Communication

Communication is defined as keeping customers informed in language they canunderstand; it also involves listening to them. Communication with patients is vitalto delivering service satisfactions because when hospital staff take the time toanswer questions that concern patients, it can alleviate their feelings of uncertainty.Four items were used to assess the level of communication at public and privatehospitals (see Table 3).

2.4. Discipline

Discipline is defined as the sense of order that one perceives in a given serviceenvironment and is reflected in both behaviors of the staff and the appearance ofthe overall hospital environment. In many organizations and institutions inBangladesh, lack of discipline is pervasive. Employees are often reluctant toperform their prescribed tasks and demonstrate a proclivity to circumvent existingrules and regulation. Cleanliness is another manifestation of the extent of order anddiscipline in the organization. In the hospital environment, the extent of discipline

S.S. Andaleeb / Health Policy 53 (2000) 25–37

can influence perceptions of service quality. Six items representing aspects ofdiscipline were used to measure the construct (see Table 4).

2.5. Baksheesh

Baksheesh represents the extra compensation that is expected in many servicesettings in Bangladesh for ‘due’ services. This concept seems to have taken root inthe country’s social fabric. Although there is a fine line, it may be distinguishedfrom bribes in that bribes represent payments or demands for money to obtain orrender ‘undue’ services. Two items were used to measure Baksheesh (see Table 5).

These five constructs represent the initial set of factors that emerged as latentvariables from our exploratory analysis. Services at private and public hospitalswere compared along the measures of these factors.

3. Methodology

3.1. Secondary research

Existing research was first examined to determine whether any studies wereconducted in Bangladesh to compare the quality of services between private andpublic hospitals. An extensive search turned up relatively little information. Conse-quently, this study was based on in survey data. The conceptual framework and itskey parameters were based on qualitative interviews with experts and a cross-sec-tion of recipients of health care service in Bangladesh. Based on their inputs, anda review of the literature from other countries, a number of issues were identified.Five important dimensions of hospital service quality were derived as latentvariables from the data structure.

3.2. Questionnaire design

A preliminary version of the questionnaire was first developed in English. Theitems were translated next into the local language (Bangla) and retranslated until apanel, fluent both in English and Bangla, agreed that the two versions werecomparable. These items were rated on seven-point Likert scales in a structuredformat with the verbal statements ‘strongly disagree’ and ‘strongly agree’ anchoredto the numerals 1 and 7. This format has been recommended for health care surveys[14]. Multiple items were used to represent each construct and were assessed fortheir reliability and validity. The questionnaire was pre-tested several times.

3.3. Sampling and data collection

Because of the preliminary nature of this investigation, 300 interviews wereplanned from Dhaka City only. In the absence of reliable lists, considerable effortwas devoted to selecting the sample. The population was defined as residents ofDhaka City who had utilized hospital services in the past 12 months.

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To obtain a random sample, stage-wise area sampling was combined withsystematic sampling. First, 17 residential areas were randomly selected from agenerated list of all major residential areas. In each selected area, a list of majorstreets was developed based on traffic flow. At least two streets were randomlyselected from this list. Some judgment had to be used at this stage because a ‘major’street is not a standardized concept. Residential homes were considered as thesampling units; if they were situated on the selected streets, and they generally were,households were chosen using systematic sampling. If enough interviews were notgenerated from a major street, by-lanes were selected, assuming that the populationcharacteristics would be similar in a residential area along a major street.

Interviewers were sent in pairs. They were also given a letter of introduction froma recognized university for residents to see that the study was authentic. Atelephone number was also provided if respondents had questions or concerns.Field interviewers met with some difficulty since not all the selected households hada member who was hospitalized in the past 12 months. Other households did notgrant interviews because, being unfamiliar with studies of this nature, they seemedsuspicious about the purpose of the study.

Due to time and resource constraints, interviewers who were not able to completethe required number of surveys were given a second option. Assuming that thepopulation characteristics were similar in a given area, they were asked to go tooffices and shopping centers in their selected areas. Again, using systematicsampling and after a quick screening question on respondents’ use of a hospital inthe past 12 months, interviewers proceeded with the survey questions. A total of216 surveys were finally completed of which nine were discarded because of missingdata and response biases. Approximately 11% of the total sample were drawn fromthe population centers.

In profiling the respondents, it was found that they had been to 57 hospitals andclinics in the city. Of them, 48% went to a public hospital while 52% went to aprivate hospital. The demographic distribution of the respondents indicated thefollowing: gender — 60% were males and 40% females; education — 14% hadprimary education, 33% had secondary school certificate or a higher secondarycertificate, and 53% had a higher degree (perhaps reflecting who has access tohealth care); and income — 23% had income less than Tk. 5000 (US $1=Tk. 50approx.), 42% had income of Tk. 5001–20 000 and 34% had income of Tk. 20 000or higher (again a reflection of who has access to hospital). While we have no basisfor comparison, the sample seemed consistent with the type of person living in aresidential area who would be able and willing to use hospital facilities in DhakaCity.

4. Analyses

Several data analysis techniques were used. Frequency distributions were ob-tained to check for data entry errors (e.g. unrecognized or missing codes) and toobtain descriptive statistics. The constructs depicting service quality were derived

S.S. Andaleeb / Health Policy 53 (2000) 25–37 31

from factor analysis with varimax rotation; these factors were assessed for reliabil-ity (using coefficient alpha). The results indicated that the reliability coefficientexceeded the value of 0.7 for each construct. These values conform to therecommendations of Nunnally [15]. Validity of the measures was supported by theloadings of the multiple-items in the factor structure; all items loaded on clearlydiscernible factors.

5. Results

For each construct, its component measures were compared using multivariateand univariate ANOVA to look for significant differences in service quality betweenpublic and private hospitals.

5.1. Responsi6eness

Table 1 indicates that the multivariate test of significance for responsiveness wassignificant. The null hypothesis of no group difference was rejected. For each of thesix items measuring responsiveness, private hospitals were perceived as moreresponsive than public hospitals. This finding supports the first proposition. Themean scores also indicate that private hospitals were rated slightly above themid-point of the seven-point scale while public hospitals were rated near or belowthe mid-point.

5.2. Assurance

Table 2 summarizes the results for assurance. Interestingly, while the multivariatetests of significance led to rejection of the null hypothesis, univariate analysisshowed only one significant difference. No significant difference was perceived inthe skills of the staff at public and private hospitals. This may be explained by thefact that many hospital staff (especially doctors) working for the public hospitalsare also affiliated with private hospitals. Thus, it is not surprising that there was nosignificant difference on this item. The results also indicate that services were notprovided more efficiently at the private hospitals. This result is at variance with thefirst proposition that the incentive structure in the private sector would lead tomore efficient services in this sector.

The third item suggests that staff professionalism at both public and privatehospitals are perceived as comparable as there was no statistical difference. Thefourth item indicated that medical procedures were more apt to be performedcorrectly the first time in private hospitals. This finding supports the first proposi-tion since the quality of service delivery was expected to be tied directly to potentialrewards that the private hospitals can tap into. For example, when medicalprocedures are performed correctly the first time, the potential rewards are high(loyal clients, positive word-of-mouth advertising, etc.); when performed poorly,patients’ refusal to pay or to demand additional time to correct the problem (when

S.S. Andaleeb / Health Policy 53 (2000) 25–3732

Table 1Manova: tests of group differences on responsivenessa

Means Univariate F-testsVariable

Significance PBxpub xpvt F-value

5.26 (1.46) 0.0014.29 (1.74) 17.026The staff were responsive topatient’s needs

0.0014.13 (1.77) 5.08 (1.53) 15.49The staff was caringThe staff responded immediately 0.0013.76 (1.84) 4.99 (1.62) 23.40

when called4.99 (1.36) 0.014.29 (1.86) 8.65The staff were courteous

4.14 (1.72) 5.06 (1.34) 0.00116.75Hospital staff were helpful0.00121.574.88 (1.49)Services provided were prompt 3.79 (1.72)

Responsiveness a=0.91

Multivariate tests of significance

Pillais Exact F=4.70 with 6 df PB0.0010.13530.1564Hotelling’s

Wilks 0.8646

a Figures in parentheses represent the standard deviations.

Table 2Manova tests of group differences on assurancea

MeansVariable Univariate F-tests

Significance PBxpub xpvt F-value

0.54 0.46 nsThe facility had skilled staff 4.83 (1.53)5.00 (1.38)2.57Services were provided efficiently 4.64 (1.51) 0.11 ns5.00 (1.41)0.94The staff were professional 4.85 (1.49) 5.07 (1.46) 0.33 ns5.00 0.027*Medical procedures were correct 5.01 (1.74) 5.60 (1.69)

the first time0.57 ns0.32The doctors were competent 5.50 (1.26)5.61 (1.33)

4.92 (1.39) 0.06 0.13 nsThe nurses were well trained 4.97 (1.57)Assurance a=0.89

Multivariate tests of significance

0.10349 Exact F=3.161 with 6 df PB0.001PillaisHotelling’s 0.11544Wilks 0.89651

a Figures in parentheses represent the standard deviations.

S.S. Andaleeb / Health Policy 53 (2000) 25–37 33

Table 3Manova: tests of group differences on communicationa

Means Univariate F-testsVariable

F-valuexpvtxpub Significance PB

The doctors were willing to answer 4.62 (1.76) 5.24 (1.54) 5.76 0.01any questions

I received adequate explanations of 4.74 0.054.28 (1.94) 4.91 (1.70)any tests I had to undergo

0.001I was given adequate information 5.21 (1.47) 17.114.10 (1.93)about my health condition

I was given adequate information 0.0014.33 (1.89) 5.27 (1.31) 13.69about my treatment

Communication a=0.85

Multivariate tests of significance

0.10076Pillais Exact F=4.40 with 4 df PB0.001Hotelling’s 0.11205

0.89924Wilks

a Figures in parentheses represent the standard deviations.

Table 4Manova: tests of group differences on disciplinea

MeansVariable Univariate F-tests

xpvt F-value Significance PBxpub

8.92 0.01Rules and regulations were strictly 3.88 (1.86) 4.65 (1.57)maintained questions

23.41Cabins/wards were regularly cleaned 4.28 (1.98) 0.0015.57 (1.57)34.64 0.001Toilet facilities were clean 4.84 (1.78)3.12 (2.12)

4.92 11.35 0.001The staff was disciplined 4.11 (1.76)0.00125.90Cleanliness was maintained 3.61 (1.76) 4.93 (1.69)

throughout the facility1.92 0.167 nsThe hospital staff had a clean 5.14 (1.57)4.81 (1.69)

appearanceDiscipline a=0.92

Multivariate tests of significance

0.19099 Exact F=6.77 with 6 df PB0.001PillaisHotelling’s 0.23608Wilks 0.80901

a Figures in parentheses represent the standard deviations.

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Table 5Manova: tests of group differences on baksheesha

Means Univariate F-testsVariable

F-value Significance PBxpub xpvt

0.1Services were not provided properly 4.07 (2.19) 3.45 (2.22) 1.70without tips

Hospital staff expected tips 4.66 (2.14) 4.67 (2.17) 0.90 ns−0.08Baksheesh a=0.90

Multivariate tests of significance

Exact F=2.96 with 2 df PB0.10.03751Pillais0.03360Hotelling’s

Wilks 0.96769

a Figures in parentheses represent the standard deviations.

possible) can represent an opportunity cost of additional earning. Negative word-of-mouth is also likely to further erode potential future earnings. In the publicsector, the fixed compensation and inadequate incentives imply that the opportunitycost of making mistakes is much lower. This is what patients seem to be corroborat-ing. On the remaining items, there was no difference.

5.3. Communication

Table 3 indicates that the multivariate test for this construct was significant; onall four items measuring communication, private hospitals obtained a significantlyhigher rating than public hospitals. It is interesting to note that although thehospital staff are perceived as comparable in skill and professionalism (see Table 2),their behavior patterns are significantly different: those at private hospitals arerated better by the patients. This apparent contradiction may be explained by theincentive structure.

5.4. Discipline

Table 4 indicates that the multivariate test was significant. As expected, privatehospitals are perceived as significantly better on discipline than public hospitalsexcept on one attribute: the cleanliness of the staff. We feel strongly that itis the incentive structure that drives a lower level of discipline in the publichospitals where service standards, responsibility, and accountability are compro-mised often.

5.5. Baksheesh

Table 5 indicates that the multivariate test for Baksheesh was not significant. Inother words, the propensity to seek Baksheesh in public hospitals is no greater than

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in private hospitals. Somewhat surprising was the finding that while the respondentsindicated that hospital staff expected baksheesh (scores were higher than themid-point of the scale), they did not feel as strongly that services would not beprovided without baksheesh. The mean scores also suggest that the propensity toexpect baksheesh is not extreme. While this is a welcome sign, additional studies areneeded to corroborate the findings.

The following additional observations, derived form the results, are also perti-nent. On responsiveness, the highest score attained by private hospitals was 5.26 onone of the measures; the lowest attained score was 4.88 on another. Public hospitalsdid not even earn a score of 5.00 on any item but were rated as low as 3.76suggesting the negative perceptions held about their responsiveness. The ratingswere somewhat better for assurance, marginally lower for communication anddiscipline, and around average for baksheesh. These results do not indicate thatpublic hospitals deliver abysmal service, especially when their circumstances areconsidered. However, both groups have room for improvement; and unless they doso, patients may be inclined to seek health care services in other countries that maybe perceived as providing better quality of services.

6. Conclusions

It was proposed that the incentive structure in the private and public hospitalswould explain differences in the quality of services provided by these organizations.This contention was largely supported since private hospitals obtained betterratings than public hospitals on most of the measures of responsiveness, communi-cation, and discipline. These differences suggest that private hospitals are playing ameaningful role in society, justifying their existence, continuation, and growth.

If private hospitals are encouraged because of the increasing demand for services,it is important that they are not allowed unbridled expansion. This is becauseprivate hospitals have been known to reduce quality by reducing inputs, disregardsocial pricing considerations, or, worse, try to increase their profits by providingservices that are unnecessary or even harmful ([16]). These practices can be ofconcern, especially in an environment where little has been done in the area ofmalpractice law. Moreover, there are no known instances where hospitals ordoctors have been held accountable or penalized for negligence, a not so uncom-mon occurrence. Thus, any effort at expanding private hospital care must also bepreceded and strengthened by the introduction of laws that protect the patientbetter than what they do today. At the same time, the government must not intrudeinto planning the size, type, and location of the private hospitals. In fact, tostrengthen health care practices in the country, the government should considerencouraging and inviting foreign capital and expertise so that new technology andmodern managerial practices with their attendant efficiencies are gradually intro-duced in the country for local hospitals to emulate.

These views on privatization are not intended to imply that public hospitalsought to be phased out or de-emphasized because they have an important role to

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play in the area of equity by making health care available to a wider communitywho cannot afford private care. What they need, however, is to establish a set ofcriteria against which their performance is benchmarked and compared at regularintervals (at least once a year). Several important criteria and their measures aresuggested by this study. In addition, the incentive structure in public hospitals mustalso be designed to ensure that the appropriate standards of service aredelivered. One solution is to tie a part of the compensation of health care personnelin public hospitals to services rendered and the feedback received from patients.This, of course, is a complex issue and has implications for pay scale administrationwhere health care staff, as government servants, are bound by certain pay struc-tures.

The practice of baksheesh must also be curbed in both public and privatehospitals because things could go out of hand; worse still, practices such as briberycould become commonplace. Where government agencies have failed to effectivelycontrol this aspect of service delivery, they may have to be replaced by communitygroups or in-patient committees to counteract the growing menace. Withoutcontinuous monitoring and rapid enforcement of the law, the problem couldescalate rapidly.

The results also indicate that while the private sector has an edge over the publicsector, the differences in service evaluations were not great. Moreover,with the exception of a single item (see Table 2), the scores do not exceedthe 5.5 mark for any item on the 7-point scales. Clearly, both public and privatehospitals have room to improve and must strive to achieve higher scores onall the variables except baksheesh. To determine whether this is beingachieved, evaluations must be conducted on the selected constructs at regularintervals and compared against a benchmark such as this study. These findingsmust also be widely disseminated. By doing so, they will continue to raise theawareness of the public and send a strong message to those hospitals that are slowto respond to ‘customer’ needs. A continuous stream of such studies, thatwould be open to public scrutiny, could influence complacent health careproviders to respond to the standards of service that the public expects. Otherwise,the exodus to foreign countries, in search of better health care, willintensify, hurting the economy by draining its meager resources. In addition, if thepride and professionalism of the people who work in the hospitals in Bangladeshcan be provoked through continuous evaluations and appropriate incentives, thelong-neglected patient is likely to be better off physically, emotionally, and finan-cially.

Acknowledgements

The author acknowledges the assistance provided by Nuzhat Zaman, SohelShams, and Imtiaz Karim during data entry and preliminary analysis. The contri-butions of individuals associated with Independent University, Bangladesh and agrant from the Office of International Programs at Pennsylvania State Universitywere also instrumental in completing this study..

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