Hedonic and Utilitarian Value and Patient Satisfaction: Perceptual Differences between Patients and Providers

University of Texas at Tyler University of Texas at Tyler

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Hedonic and Utilitarian Value and Patient Satisfaction: Perceptual Hedonic and Utilitarian Value and Patient Satisfaction: Perceptual

Differences between Patients and Providers Differences between Patients and Providers

Kerri M. Camp

University of Texas at Tyler

, kcamp@uttyler.edu

Kevin James

University of Texas at Tyler

Krist Swimberghe

University of Texas at Tyler

Barry J. Babin

Louisiana Tech University

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Recommended Citation Recommended Citation

Camp, Kerri M.; James, Kevin; Swimberghe, Krist; and Babin, Barry J., "Hedonic and Utilitarian Value and

Patient Satisfaction: Perceptual Differences between Patients and Providers" (2017).

Marketing Faculty

Publications and Presentations.

Paper 2.

http://hdl.handle.net/10950/3851

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Hedonic and Utilitarian Value and Patient Satisfaction 1

Hedonic and Utilitarian Value and Patient Satisfaction: Perceptual Differences between

Patients and Providers

Abstract

Healthcare is continually evolving to meet changing governmental regulations and a new

emphasis on patient perceptions of quality care. Governmental mandates create a shift in focus

from volume-based to value-based reimbursement for providers. The purpose of this article is to

identify satisfaction drivers with particular emphasis on similarities and differences between the

perceptions of hospital patients and providers. A combination of quality based healthcare,

stakeholder theory, and services literature point to key service outcomes including expectations,

quality, value, and satisfaction. Multiple group structural equations modeling provides a vehicle

for examining differences in relationships among these constructs between these two key

stakeholders, patients and providers. Results suggest that utilitarian value is central to successful

healthcare service experiences. But, the results also suggest differences between patients and

providers in the way they believe utilitarian value affects outcomes; the results suggest that

healthcare providers may underestimate utilitarian value’s role relative to patient perceptions.

Keywords - Healthcare, Value drivers, Satisfaction, Perceptions, Hospitals

Introduction and contribution

Healthcare is arguably the single most important service experience because it impacts

one’s quality of life and physical well-being. Healthcare services today also are continually

evolving to meet changing governmental regulations. When the Affordable Care Act (ACA), was

signed into law in 2010 (Department of Health & Human Services, 2015), healthcare in the U.S.

significantly changed. The increasing role of quality measures that influence reimbursement

Hedonic and Utilitarian Value and Patient Satisfaction 2

payment models continues to evolve and impact physician practices and hospitals. The ACA

now establishes a value-based payment modifier, which provides for differential payments based

upon the quality of care furnished. Additionally, providers must “report quality measure of

process, structure, outcome, patients’ perspective on care, efficiency, and costs of care that relate

to services furnished” (U.S. Congress 2010, p. 286) for each patient experience. Hospital

performance is publicly reported and includes both outcomes and patients’ perceptions of care

received. In light of healthcare reform, researchers have called for further study of patient quality

perceptions (Scammon et al., 2011).

Although the primary role of healthcare providers is to deliver quality care to patients,

there is growing interest by providers to possess an understanding of patients’ expectations and

perceptions of quality, value, and satisfaction as evidenced by the standardized Hospital

Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey now used to

assess patient hospital experiences (Elliot, et al., 2015; Vogus & McClelland, 2016). The

HCAHPS includes questions on nurse and doctor communication, responsiveness of hospital

staff, cleanliness and quietness of the hospital environment, overall hospital rating, and the

patient’s willingness to recommend the hospital (Department of Health & Human Services,

2015).

The purpose of this article is to identify and assess perceptual differences between

patients and providers with respect to expectations, quality, value, and satisfaction in a hospital

setting by testing relationships between various outcome variables across a group of patients and

providers. To assess whether or not healthcare providers (nurses, physician assistants,

physicians, etc.) have an accurate perception of patient satisfaction drivers, we surveyed

providers who currently work in hospitals as frontline service providers as to their opinions

Hedonic and Utilitarian Value and Patient Satisfaction 3

regarding their patients’ satisfaction with their hospital experiences. We operationalize value by

using utilitarian value (efficiently completing the task) and hedonic value (emotions and positive

feelings from the task). This research not only sheds further light on antecedents to patient

satisfaction, but also explores the level of congruence between patients and providers. We

conclude with managerial implications for better understanding patient satisfaction, especially

considering the current emphasis of value-based reimbursements and the importance of patient

satisfaction scores. The importance of research in the healthcare sector is stated, “No other

service sector affects the quality of life more than healthcare” (Berry & Bendapudi, 2007, p.

121).

Theoretical framework

Stakeholder theory posits that a broader view of and understanding of participants’

perspectives is necessary to fully understand and deliver value via exchange relationships. A

stakeholder could be a customer (patient) or supplier (employee) (Hult, et al. 2011). Previous

research suggests providers and patients are disconnected and suggests quantitative work is

necessary comparing multiple groups including patients and providers (Gill, White, and

Cameron, 2011). Yet despite this call, the vast majority of papers examine each stakeholder’s

perspective in isolation focusing only on patients. For this reason, the present research examines

healthcare providers and patients in tandem. A patient is a respondent who has recently received

hospital care, while a provider in this context interacts directly with the patient to provide the

operant resources germane to the hospital service experience (Vargo & Lusch, 2004).

Service quality

Several research studies examine patients’ perceptions of service quality (Abuosi, 2015;

Clemes, Ozanne, & Laurensen, 2001; Marciarille, 2012; Murti, Deshpande, & Srivastava, 2013).

Hedonic and Utilitarian Value and Patient Satisfaction 4

In the New Zealand study, (Clemes, Ozanne, & Laurensen, 2001, p. 17) the authors suggest that

healthcare patients perceive “the core product in healthcare delivery (outcome, reliability and

assurance) as more important than the service quality dimensions relating to the peripheral

product in healthcare delivery (food, access and tangibles)”. Marciarille (2012) measures patient-

generated online reviews of physicians and posits patients assess physician quality by valuing

environmental and humanistic elements rather than solely physicians’ clinical skills. Murti,

Deshpande, and Srivastave (2013) propose a direct relationship between service quality and

behavioral intentions and an indirect relationship mediated by patient satisfaction. However,

Ladhari and Rigaux-Bricmont (2013) make a compelling argument that quality affects

satisfaction through both positive and negative emotions, thus making a strong argument that

quality does not have a direct effect on satisfaction.

As value-based reimbursement models continue to expand and include patients’

perceptions of quality healthcare, it is important for providers to understand how their patients

determine value in healthcare service experiences. Using the current single item measure of

recommendation ignores valid measurement theory (Hair et al. 2010). Gaur et al. (2011) confirm

the importance of the doctor-patient relationship is positively influenced by the behavior of

providers, but the research is constrained to healthcare in India. Limited research exists

evaluating providers’ perceptions of the patient experience. In the study by Kirby, et al. (2014),

Australian providers and patients with chronic obstructive pulmonary disease were interviewed

to ascertain how patients manage their disease. Differences between provider and patient

perceptions existed, but the small sample size of six providers limits the generalizability. Abuosi

(2015) posited differences between provider and patient perceptions of quality of care, however

the research was limited to hospitals in Ghana. Thus, the research question of whether or not

Hedonic and Utilitarian Value and Patient Satisfaction 5

healthcare providers maintain accurate perceptions of their patients’ perceptions remains in need

of further study. Both researchers and practitioners need to better understand the drivers which

affect whether or not patients are satisfied with their hospital experience. If perceptual gaps

continue along with measurement shortcomings, hospitals simply will continue creating

ineffective policies with respect to patient satisfaction.

Value, expectations, and quality in business literature

These studies range from purely conceptual in nature to studies including empirical

results. Value as an outcome variable resulting from service consumption experiences is a well-

developed notion (Babin & James, 2010; Babin et al., 1994; Holbrook & Hirshman, 1982;

Zeithmal, Berry, & Parasuraman, 1993). Holbrook and Hirshman (1982) present the experiential

perspective in conjunction with the utility viewpoint and include entertainment as relevant

beyond the goods versus services dichotomy. Babin, Darden, and Griffin (1994) take value

derived from shopping experiences and break it into two components: utilitarian and hedonic

value. Utilitarian value represents the ability to complete efficiently the service task while

hedonic value represents the emotions and positive feelings generated from the experience itself.

Consistent with the notion of hedonic value as relevant to healthcare services, Essen and

Wikstrom (2008) suggest that for patients in long-term residential care, the only service

dimensions that influenced patients’ perceptions of service quality were those that influenced

emotion.

Evidence suggests that hedonic and utilitarian value exhibit a modest, positive correlation

with each other across a wide range of services contexts (Babin & James, 2010). Net value then

results as one weighs benefits received from service against the resources needed to receive the

service. In this get versus give tradeoff, the greater the customer involvement, the greater the

Hedonic and Utilitarian Value and Patient Satisfaction 6

chances the customer will derive more from the get component, all things being equal, and the

more one is willing to give. Further, if the experience can be enhanced to somehow counteract

with the anxiety that surrounds high risk service encounters, the consumer value equation

enhances through hedonic value.

From a hypothesis development point of view, Gallarza et al. (2011) offer a causal model

to explain the relationship between quality, value, and satisfaction and examine hundreds of

papers testing and validating the model from a service provider perspective. In the paper, the

authors explain the difficulty in measurement, consistency, and often high redefinition of the

same term or terms over time. Some items became clear however. From a theoretical viewpoint,

quality is related to value and value is related to satisfaction. Also, expectations often enter the

model and can be defined as the attributes desired and the performance desired (Fornell,

Johnson, Anderson, Cha, & Bryant, 1996). Expectations are positioned as exogenous to any

particular service encounter and are linked strongly both theoretically and empirically to service

quality (Zeithaml, Berry, & Parasuraman 1993). The expectations-quality relationship can be

viewed from multiple theoretical perspectives. One perspective, consistent with disconfirmation

bias theories such as SERVQUAL, suggests that once high expectations are established, the

perceived performance will become unlikely to live up to those high expectations. Likewise, low

expectations are easy to surpass. Thus, the contrast perspective suggests a negative expectations-

quality perspective. However, the possibility exists, particularly in either low or extreme levels

of consumer involvement, that a confirmation bias may occur consistent with an assimilation

effect (Ofir & Simonson, 2007). Under an assimilation perspective, once high expectations are

set, perceived quality is set through that lens such that a positive expectation-quality relationship

emerges. Given the relatively high level of involvement expected, the latter perspective seems

Hedonic and Utilitarian Value and Patient Satisfaction 7

more likely (Hamer, 2006). However, if the providers believe patient expectations are inaccurate,

a different relationship may emerge more consistent with a contrast effect. The providers may

well believe the inaccuracies are such that patients have unrealistically high standards for the

service they will receive. Thus we will offer the basic premise that:

H1: Expectations will be positively related to quality.

Although value research is well established in business literature and is emerging as

paramount in importance, because healthcare organizations experience unique challenges due to

the complexity of service encounters, co-production, and the intangibility of the service offering

(Vogus and McClelland, 2016), it is important to gain a better understanding of how patients

determine satisfaction. We will now discuss the interplay between quality and value.

Quality and value

The understanding of value as it relates to patients and healthcare providers can be

characterized as in flux. A review of the literature suggests that researchers assess and define

value with a variety of models. For instance, Austuti and Nagase (2014) examine relationship

marketing as a value element within the satisfaction to loyalty relationship structure. Chahal and

Kumari (2011) propose customer perceived value (CPV) as a combination of touch points

including acquisition value, transaction value, efficiency value, aesthetic value, social interaction

value, and self-gratification value. While the work has merit and rigor, a six factor solution lacks

parsimony and some of the items fit better with satisfaction or service quality rather than value.

The work highlights the importance of understanding how value, satisfaction, quality, and

expectations fit together in a theoretical viewpoint from the patients’ and providers’ perspective.

Chalamon, Chouk, and Heibrunn (2013) study value from a segmentation standpoint via

different patient typologies. The four quadrant approach includes functional, hedonistic, trustfuls,

Hedonic and Utilitarian Value and Patient Satisfaction 8

and consumerists. The typology treats personal values as motivational individual difference traits

that are exogenous to service outcomes (Rokeach, 1972). In contrast, value remains a key

outcome of the consumption process that drives performance (Babin & James, 2010; Chahal &

Kumari, 2011; Hult, et al., 2011). A hedonic component exists in practically all consumption

experiences and that includes healthcare settings. Indeed, hospital architecture takes the

immediate response to the environment as a primary concern in shaping the healthcare

atmosphere (Harris et al., 2002). Lim and Ding (2012) acknowledge the role of value in patient

satisfaction as an antecedent and call for more survey research in examining the relationship of

value and satisfaction from both a patient and provider point of view. From this brief review, we

surmise that value research in healthcare is developing. The fact that little research on value in

healthcare exists is troubling due to the importance placed on the value-based modifier which is

now used in calculating reimbursements to hospital providers and systems (Elliot, et al., 2015;

Vogus & McClelland, 2016).

The final hypotheses build from SERVQAL, the satisfaction paradigm, and Gallarza et.

al (2011). The focus is the relationship between quality and value. Quality can be formally

defined as the consumers judgement about a products overall excellence or superiority

(Zeithaml, 1988). Quality is a cognitive concept whereas value and satisfaction are both

cognitive and affective. Also, from the get versus give definition of value, quality is often one of

the strongest predictors of value (Zeithmal 1988; Babin & James, 2010). Based on the strong

precedent, we offer the following hypotheses:

H2: Quality will be positively related to utilitarian value.

H3: Quality will be positively related to hedonic value.

The satisfaction paradigm and value

Hedonic and Utilitarian Value and Patient Satisfaction 9

The satisfaction paradigm has received ample attention over the years (Dixon, Freeman,

& Toman, 2010; Zeithaml, Berry, & Parasuraman, 1993). More recently, Vogus and McClelland

(2016) provide an overview of healthcare research on patient satisfaction and service quality and

call for further research on factors which improve the patient experience. The Consumer

Satisfaction Index is one of the more prominent and known indexes in use to determine industry

and company health (Fornell, 1992; Fornell, et al., 1996). The index measures satisfaction by

asking respondents three questions regarding expectations, satisfaction with service delivery, and

the company’s performance relative to competitors (Anderson, Fornell, & Lehmann, 1994). The

Consumer Satisfaction Index captures antecedents to satisfaction including value, quality, and

expectations while using a proprietary weighting technique to derive their final benchmarks

including satisfaction and loyalty (see theacsi.org) in many industries including healthcare.

Recent government actions linking hospital reimbursement to customer satisfaction scores

highlight the importance of the topic and the measurement struggle.

Many hospital satisfaction surveys do not include the much used satisfaction scale or

traditional dependent (i.e. satisfaction and value) variables necessary for valid measurement

(Hair et al., 2010) and rely solely on a single-item recommendation question. The actual value

delivery encompasses hedonic and utilitarian value components which occur prior to the ultimate

judgement of satisfaction or dissatisfaction. This research uses utilitarian and hedonic value to

measure value in a hospital delivery setting. Hedonic value can be defined as the net positive

outcome from the consumption experience in terms of the extent to which it is gratifying because

some goal is accomplished and because of the gratifying nature of the experience itself (Babin et

al., 1994). While the original scale is 14 items, an examination of the items reveal that some are

inappropriate for the hospital setting. Thus, after reviewing the items, four items seem

Hedonic and Utilitarian Value and Patient Satisfaction 10

particularly appropriate for the healthcare setting. The hedonic elements chosen capture any

sense of emotion or positive experience involved in the service delivery by asking questions like

this visit was better than otherwise, this visit helped me get past my problems, this visit has some

sense of excitement, and this visit felt like an escape from reality. Prior research asserts that

healthcare is predominantly a utilitarian value dominant industry (Cronin et al., 2000).

Goetzinger, Park, Lee, and Widdows (2007) use utilitarian value in an e-health online search

component and find utilitarian value as a key driver of satisfaction. In a hospital service delivery

setting, hedonic value may fail to be realized as valuable, and patients may seek only an

expedient process where a task can be accomplished. However, Osei-Frimpong, Wilson, and

Owusu-Frimpong (2015) find through qualitative research based in Guana that accomplishing

the task of healthcare was not the sole outcome that patients consider. As such, experiential

elements could have a place in the satisfaction equation. Further, prior research investigating

emotion uses terms such as happy, pleasant, joyful, delighted, and surprised to represent positive

emotions within a public hospital setting (Ladhari & Rigaux-Bricmont, 2013). If such emotional

experiences exist within a hospital setting, it is logical further to conclude hedonic outcomes are

possible and expected. However, the extent to which utilitarian or hedonic value actually drives

satisfaction remains unexplored. Given the recent emphasis on satisfaction drivers within

healthcare, this gap can no longer afford to go unanswered. Utilitarian value to patients is being

able to accomplish a task. As such, the questions chosen to capture utilitarian value from both

customer perception and provider involve task oriented questions. Therefore, we offer the

following hypothesis:

H4: Utilitarian value is positively related to satisfaction.

H5: Hedonic value is positively related to satisfaction.

Hedonic and Utilitarian Value and Patient Satisfaction 11

Research framework

Research model

Based on the above review, we next test the model using a sample of hospital providers

and hospital patients. To do so, patients provide their perception of the outcome measures

including expectations, utilitarian and hedonic value, satisfaction, and quality that they believe

emerge from interactions with healthcare professionals within a hospital context. Providers also

respond based on what they believe patients receive from their service experience. The model

displaying the constructs for testing is available in Figure 1.

Given the lack of agreement on basic definitions for healthcare value (Chahal & Kumari,

2011; Lim & Ding, 2012), and the conceptual infancy of research within healthcare regarding a

stakeholder perspective in which multiple stakeholders are studied simultaneously (Hult, Mena,

Ferrell, & Ferrell, 2011; Wicks, St. Clair, & Kinney, 2007), we expect differences to exist

between patients and providers. To the extent that differences do not emerge, one can infer that

Hedonic and Utilitarian Value and Patient Satisfaction 12

they understand their customers (patients), which is a sign of quality service delivery (Zeithaml

et al. 1993).

Methodology

Sample

The patient data set includes responses from participants recruited by a marketing

research firm through the use of U.S. consumer panels who had received treatment at a hospital

within the last year. The data representing hospital providers include responses from students

enrolled in a university healthcare graduate program. For the purposes of this study, hospital

providers are those individuals who are frontline hospital service providers with direct patient

care responsibilities and the majority of the sample includes nurses, physician assistants, and

physicians although a small percentage included other job titles. The graduate students either

respond themselves based on their own healthcare experiences as a hospital provider or suggest

someone else from their organization who does interact with patients in that capacity. Each

respondent indicated the nature of their current job as prompted during the survey. Any non-

qualifying respondents are screened out with this question. Thus, the resulting provider sample

consists entirely of frontline hospital providers from all parts of the U.S.

The researchers understand a dyadic relationship between a patient and their provider is

ideal, however, the Health Insurance Portability and Accountability Act (HIPAA) protects the

privacy of individually identifiable health information, making true dyadic data difficult to

obtain. Further, patients often choose hospitals based on proximity to accident, which very often

is away from home or preferred hospital. Hospital care, like many healthcare services, serves all

demographics (Bearder, Carter, & Harve, 2013), thus a specific dyadic relationship of patient

and provider could be misleading towards serving future patients. The sample is comprised of

Hedonic and Utilitarian Value and Patient Satisfaction 13

people who have been an in-patient hospital patient within the previous twelve months. A

screening question asks the patient to confirm that the respondent received treatment within the

last twelve months. A second screening question confirmed that the patient had received

treatment at a hospital. Finally, a question asks respondents to answer all questions keeping the

most recent hospital visit in mind. Data quality measures include multiple integrity filters.

Respondents who do not respond appropriately to those items are branched out of the survey.

Overall, 228 respondents attempted at least one screener question resulting in 150 qualified

respondents who had experience with a hospital in the past year. Of the 150 qualified

respondents, 10% were eliminated for completing the survey too quickly (under 3 minutes) and

8% were eliminated for incorrectly answering the control questions. After eliminating these

respondents, the usable sample size was 123 (n=123) with a 53.9% response rate.

In the hospital provider survey, frontline providers answer questions based on how they

believe the typical patients in their facility would respond. The survey questions make use of

Likert scales, multiple choice selection, and slider scales to capture respondent feedback. The

survey introduction question asks “in your current position, are you directly involved in the

treatment of patients?’ An answer of no results in dismissal. Finally, providers are prompted to

“Please answer the following questions thinking about the typical care a patient would receive at

the hospital where you have the most recent work experience.” Each provider completed a

survey with items matching those of the healthcare services for patients with logical adaptations

so providers could understand that the researchers are interested in the provider’s interpretation

of the patients’ perspective of their hospital experience.

Just as with the patient sample, data quality measures include check questions that

instruct the respondent to choose strongly disagree to an item. Any respondent who fails the

Hedonic and Utilitarian Value and Patient Satisfaction 14

integrity filter is dismissed from the survey. Overall, 199 respondents attempted at least one

screener question resulting in 136 providers who are frontline providers. Of the 136 providers,

5% were eliminated for completing the survey too quickly (under 3 minutes) and 7.5% were

eliminated for incorrectly answering the control questions resulting in a usable sample of 119

(n=119) with a 59.7% response rate. The potential for common method bias is addressed by

using different scale types within the survey. In addition, a posthoc test uses a conservative

assessment of eigenvalues. The primary eigenvalue accounts for approximately 40 percent of the

variance in the total data and given the reliabilities and effects sizes, meets the criteria for a lack

of concern about potential common method bias (Fuller et al., 2016). Thus, common methods

variance is not expected to bias results.

Patient descriptive statistics are 57% female and health insurance coverage includes

commercial insurance (43%), Medicare (27%), and Medicaid (17%). The largest percentage of

respondents 23%, are between 30-39 years of age, while 30% are between 50-69 years of age.

Nearly 50% have a household annual income under $50,000, while 10% have a household

annual income greater than $100,000. Fifty-five percent indicated the hospital trip was

emergency and 45% routine. Forty-four percent of respondents hold undergraduate degrees, 21%

hold masters degrees, and 30% hold high school degrees. Occupational data show a wide range

of primary job titles ranging from retired, managers, IT consultants, engineers, and homemakers.

The sample is diverse with respect to respondent job titles and is representative of hospital

patients including disabled, retired, and students.

The provider sample is 75% female. Providers were asked to report the type of insurance

patients use when seeking treatment and reported Medicare (25%), commercial insurance (25%),

Medicaid (25%), Veterans Administration (15%), and uninsured (10%). Sixty-five percent of the

Hedonic and Utilitarian Value and Patient Satisfaction 15

providers surveyed were between 22-39 years of age, with the remainder between 40-59 years of

age. Providers reported the typical patient interaction as emergency (54%) and routine (46%).

The most prevalent job title includes registered nurse, physician assistant, and physician. An

examination of the job titles finds that 95% of respondents hold a job title that involves direct

patient care. The remaining 5% include titles such as ultrasound technologist, supervisor, and

chief information officers. All respondents answered in the affirmative when asked if their job

includes direct patient treatment.

Analyses and results

Model fit

Prior to the multiple group analysis, a preliminary model examines the feasibility of the

measurement theory and explores for potential problems with model instability that could cause

subsequent problems. More specifically, we initially developed a CFA depicting the proposed

measurement theory and fit that model onto the overall covariance matrix (including both

employees and patients). The model fits the data well and is provided in Table 2 (χ

= 123.8.7

with 80 df, CFI = 0.985, RMSEA = 0.048). Results likewise suggest adequate convergent (all

construct reliability estimates (CR) are at or above .7) and discriminant validity (AVEs exceed

squared correlation estimates between constructs). While the solution suggests measurement

validity overall, the solution suggests measurement validity (Hair et al., 2010).

Having established evidence of a stable solution across groups, we investigated

differences in relationships between healthcare patients and providers. Prior to focusing on the

structural relationships, we examine the measurement theory fit in a CFA fit on the covariance

matrices for the provider and patients, simultaneously. Once again, the model produces good fit

given its relative complexity and the nature of the sample (Hair et al., 2010). The overall χ

Hedonic and Utilitarian Value and Patient Satisfaction 16

174.6 with 84 df, the CFI is 0.962, and the RMSEA is 0.067. Given that we are not examining

groups disparate with respect to culture or language, a test of metric invariance is not necessary

(Babin, Borges, & James, 2015). Thus, evidence of fit validity exists across both groups.

Table 1. Means by Respondent Group

Provider

Patient

|t-Test|

p-value

Expectations

19.0

17.7

3.19

0.0016

Quality

23.3

21.3

3.18

0.0017

Utilitarian Value

15.6

16.0

0.98

0.33

Hedonic Value

17.0

17.1

0.10

0.92

Satisfaction

249.1

217.9

3.67

0.0003

Table 2. CFA, Variance Extracted, Construct Reliability, and Φ matrix

SAT

QUAL

EXP

HV1

0.62

HV2

0.74

HV3

0.67

HV4

0.74

UV1

0.89

UV2

0.69

SAT1

0.96

SAT2

0.95

SAT3

0.92

QUAL1

0.95

QUAL2

0.95

QUAL3

0.92

EXP1

0.89

EXP2

0.81

EXP3

0.81

Variance

Extracted

48.33%

63.41%

89.02%

88.38%

70.14%

Construct

Reliability

0.79

0.77

0.96

0.88

MATRIX

1.00

0.40

1.00

SAT

0.46

0.70

1.00

Qual

0.46

0.61

0.83

1.00

Hedonic and Utilitarian Value and Patient Satisfaction 17

EXP

0.094

0.34

0.36

0.38

MATRIX

SQUARED

1.00

0.16

1.00

SAT

0.21

0.49

1.00

QUAL

0.21

0.37

0.69

1.00

EXP

0.01

0.12

0.13

0.14

1.00

Results

Perceptual differences

Differences in the perceptions of expectations, quality, value, and satisfaction are

explored by comparing the construct means by group. Table 1 summarizes these comparisons.

For three of the five constructs, provider perceptions of patient ratings are significantly greater

than the actual patient ratings. The average expectation score from hospital providers is 19.0

compared to the average of 17.7 provided by patients (t = 3.19, p < .01). For perceived quality,

hospital provider ratings average 23.3 compared to the patient ratings score of 21.3 (t = 3.18, p <

.01). Hospital providers’ average summed score for perceived patient satisfaction is 249.1

compared to the actual patient satisfaction rating of 217.9 (t = 3.67, p < .001). In contrast, the

utilitarian value score from providers is slightly less (15.6) than that reported by patients (16.0),

but not significantly different. Hedonic value scores are virtually identical in the two groups

(17.0 versus 17.1). Thus, in three of five constructs, hospital providers appear to overstate the

actual level of services delivery provided relative to patient ratings.

Patient and provider moderation by group

We examined the possibility of moderation through results of estimating a multiple group

structural model consistent with the theory depicted in Figure 1 comparing providers and

Hedonic and Utilitarian Value and Patient Satisfaction 18

patients. First, the totally free, or unconstrained, structural model, freely estimating all structural

parameters between groups, yields a model χ

of 248.4 with 168 df. Second, a model fixing all

structural coefficients to be equal between groups provides a specific examination of moderation.

That model, yields a model χ

of 315.1 with 178 df. Adding the invariance constraints worsens

fit as suggested the change in χ

is 61.8 with 6 df, which is statistically significant (p < 0.001).

Thus, this finding supports the case for moderation and suggests differences in reactions between

providers and patients.

Figure 2 provides more insight into the key sources of moderation. The table displays the

maximum likelihood estimate for each structural relationship by group as only unstandardized

relationships are appropriate in this type of multigroup comparison (Hair et al., 2010). Overall,

the model results suggest only a few key direct relationships. Among healthcare patients,

expectations significantly affect perceived quality (γ = 0.87, p < .001), quality significantly

affects perceived utilitarian value (β = 0.48, p < .001), and utilitarian value significantly affects

perceived satisfaction with the hospital (β = 25.8, p < .001). These relationships facilitate

significant and nontrivial indirect relationships from expectations to utilitarian value (through

quality) and onto satisfaction (through quality and utilitarian value).

Among providers, perceptions of patient expectations does not relate significantly to

perceptions of service quality. Quality perceptions, however, do positively relate to the

providers’ perceptions of utilitarian value, which in turn, significantly and positively influences

providers’ perceptions of hedonic value and satisfaction.

Hedonic and Utilitarian Value and Patient Satisfaction 19

Moreover, several relationships appear responsible for the overall moderation of the

structural model. The expectation – quality relationship, when constrained alone, yields a

significant chi-square difference of 7.6 (1 df, p < 0.01). Patient perceptions of expectations do

positively influence quality, consistent with an assimilation effect, whereas provider perceptions

of their patient expectations do not. When the perceived quality to utilitarian value relationship is

constrained similarly, the chi-square difference is 3.8 (1 df, p = 0.05). The difference in

coefficients suggests that quality perceptions do more to drive utilitarian value among patients

than among providers. Also, constraining the utilitarian value to satisfaction path produces a

significant chi-square difference of 5.7 (1 df, p < 0.05). Again, the relationship suggests that

utilitarian value is more strongly related to patients’ actual satisfaction perceptions than it is to

providers’ perceptions of their patients’ satisfaction.

Discussion

Understanding patients’ perceptions of satisfaction and the underlying mechanism is

fundamental to evaluating service delivery effectiveness. Additionally, the complex nature of

healthcare services further exacerbates the possibility of knowledge gaps. Our research suggests

Hedonic and Utilitarian Value and Patient Satisfaction 20

perceptual differences between patients and providers emerge with respect to the relationships

between expectations, quality, value, and satisfaction. Hypothesis 1 states that expectations will

be positively related to quality. Hypothesis 1 is partially supported based on the positive

significant relationship between expectations and quality for patients whereas an insignificant

relationship emerges in the provider sample. The first gap occurs with providers not

understanding the importance of consumer expectations prior to the service offering and its

resulting effect on their patients’ service quality assessment. This may be due to the complex and

nebulous nature of many healthcare procedures that may even entail credence benefits. The

provider perceptions suggest that they do not believe patient expectations correspond to service

quality. This poor understanding of patients’ expectations for service quality is consistent with

findings by O’Connor, Shewchuk, and Carney (1994). Other prior research supports the

relationship found in our study between consumers’ expectations and quality (Teas 1993).

Our findings indicate that it is critical for hospitals to present appropriate information to

patients prior to treatment whenever possible. Because many hospital visits are planned service

encounters, detailed preoperative or in-patient instructions should be explained to patients to

facilitate realistic expectations of the forthcoming healthcare experience. Additionally, because

hospital environments could be initially intimidating to patients, admission procedures should

include a thorough patient orientation to the healthcare facility to help ease anxiety that could be

associated with high-risk service encounters. For those emergent, non-planned hospital visits,

frontline service providers should devote appropriate time to explain what treatment plans will

encompass throughout the hospital stay. Table 1 also provides supporting evidence that a gap

exists between patients and providers as seen by the overestimation of expectations and quality

in the provider group compared to the patient group.

Hedonic and Utilitarian Value and Patient Satisfaction 21

One of the surprising findings of our study is the second knowledge gap between quality

and value. Hypotheses 2 and 3 state that quality is positively related to value. Figure 2 shows a

positive and significant relationship between quality and utilitarian value which is consistent

with other healthcare research. However, our findings suggest that the relationship between

quality and utilitarian value is stronger in the patient group than in the provider group. Providers,

while correctly understanding that a relationship exists between quality and utilitarian value,

underestimate the strength of the relationship between quality and utilitarian value. Table 1

suggests that patients and providers do not see differences in the hedonic and utilitarian value

actually being delivered as shown by the means by respondent group. Taken collectively, support

exists for Hypothesis 2 as seen through providers understanding of what is being delivered, but

providers misunderstand the strength of relationship between quality and utilitarian value.

Providers should not underestimate the importance of a patient’s need to feel their

medical problem was efficiently and effectively resolved. Communication both during and after

the service encounter should emphasize consumer satisfaction with the handling of their medical

issue. However, our results posit an insignificant relationship between quality and hedonic value

thus not supporting H3. Although hedonic characteristics of the healthcare experience may

contribute to the overall service quality experience, providers should focus instead on utilitarian

values which result in a direct effect on patient satisfaction.

Hypotheses 4 and 5 state that value and satisfaction are positively related. Although both

patients and providers agree that utilitarian value effects satisfaction, a stronger relationship

exists with patients. With the federal requirements to collect HCAHPS results, which include

patient perceptions of satisfaction, providers should not discount the importance patients place

on utilitarian value and its resulting impact on patient satisfaction. Providers could emphasize

Hedonic and Utilitarian Value and Patient Satisfaction 22

utilitarian values by ensuring that a patient’s questions and medical problems are appropriately

addressed and resolved to enhance the patient’s sense of accomplishment in the healthcare

experience. Frontline healthcare providers could also establish consistent post-service encounter

communications to identify any service encounter shortcomings. The relationship between

hedonic value and satisfaction is not significant in either group, thus not supporting H5. On the

other hand, the model shows worse fit when the utilitarian value-satisfaction path is set to be

equal between groups. The relationship is stronger in the patient group suggesting that utilitarian

value does more to drive patient satisfaction than healthcare providers’ perceptions would

suggest. Thus, providers correctly understanding that a relationship exists between utilitarian

value and satisfaction, underestimate the role of utilitarian value to patient satisfaction. H4 is

supported given the positive relationship in both groups. Given the nature of hospital services,

the underestimation of utilitarian value is surprising, although with the relative newness of the

value definition and the call for survey research to clarify relationships among concepts (Lim &

Ding, 2012; Chahal & Kumari, 2011), a perceptual gap is expected.

Implications for theory and research

Understanding how patients determine value in complex service offerings is an important

research area. We offer further insight into understanding differences between how patients and

providers perceive quality, value, and satisfaction. Our research adds to the body of knowledge

of prior research that examines patient perceptions of quality (Murti, Deshpande, & Srivastave,

2013) and the study of value (McColl-Kennedy, et. al., 2012) in healthcare by identifying

specific knowledge gaps between patients and providers. The direct relationship between

utilitarian values and satisfaction and the lack of effect of hedonic values on satisfaction is

intriguing. With the current emphasis in healthcare on patient satisfaction, the identification of

Hedonic and Utilitarian Value and Patient Satisfaction 23

utilitarian values as a primary driver in patient satisfaction is a unique contribution in the study

of factors that influence patient perceptions of quality and their ultimate determination of overall

satisfaction.

Given the utilitarian nature of the hospital service setting, an examination of possible

causes of utilitarian value is appropriate. Utilitarian value can occur due to interactions with

nurses, administration procedures, doctors, the hospital experience, the room, visitors,

technicians, and post care experience. From a theoretical lens, future research should determine

the utilitarian antecedents taking each of the above patient/provider interactions into account

when developing a theoretical model. For example, nurses could better explain procedures in

order to equip patients to complete the process of recovery, admissions could continue to find

ways to create efficiencies with the pre-service process, and the hospital room could be kept

clean and sterile to facilitate the healing process. This research is the first to apply utilitarian

value to the healthcare environment as a theoretical outcome thus, actual drivers need to be

assessed particularly due to the strong relationship among quality, utilitarian value, and

satisfaction. Future research should examine these relationships with dyads of patients and their

providers to assess if these same differences occur.

Implications for healthcare organizations

Russ-Eft (2014) posits sustainable organizations are those that can effectively adapt to

changes in both the global and organizational context. The recent governmental regulations

required in the ACA mandate dramatically changes how healthcare administrators should

address patient perceptions of quality care. Although patient feedback is important to improve

quality processes, payments from insurance providers were not previously directly tied to patient

satisfaction scores. Because physician reimbursement is now impacted by the value-based

Hedonic and Utilitarian Value and Patient Satisfaction 24

payment modifier, understanding how patients perceive value in their healthcare experience is

critical.

Our study suggests that three knowledge gaps exist between the perceptions of patients

and providers when determining value drivers that impact patient satisfaction in hospital

experiences. The first gap occurs with providers not understanding the importance of patient

expectations prior to the service offering and its resulting effect on their patients’ service quality

assessment. Prior research supports the relationship found in our study between consumers’

expectations and quality (Teas, 1993). Our findings indicate that it is critical for hospitals to

present appropriate information to patients prior to treatment at the hospitals whenever possible.

Many hospital visits are planned service encounters, so detailed preoperative or in-patient

instructions should be explained to patients to facilitate realistic expectations of the forthcoming

healthcare experience. Additionally, hospital environments could be initially intimidating to

patients, so the admission procedures should include a thorough patient orientation to the

healthcare facility to help ease anxiety that could be associated with high-risk service encounters.

For those emergent, non-planned hospital visits, frontline service providers should devote

appropriate time to explain what treatment plans will encompass throughout the hospital stay.

One of the surprising findings of our study is the second knowledge gap between quality

and value. The positive and significant relationship between quality and utilitarian value is

consistent with other healthcare research. Providers should not underestimate the importance of a

patient’s need to feel their medical problem was efficiently and effectively resolved. However,

our results posit an insignificant relationship between quality and hedonic value. This may be

due to the stressful nature of hospital visits, thus patients may see no gratifying benefit of the

experience itself. These results contradict the previous findings by Essen and Wikstrom (2008)

Hedonic and Utilitarian Value and Patient Satisfaction 25

which suggest the only service dimensions that influenced patients’ perceptions of service quality

in long-term residential care services were those that evoked emotional reactions.

The final knowledge gap that occurs with this research includes the perceptions of value

with satisfaction. With the federal requirements to collect HCAHPS results which involve

perceptions of patient satisfaction, providers should not discount the importance patients place

on utilitarian value and its resulting impact on patient satisfaction. Providers could emphasize

utilitarian values by ensuring that patients’ questions and medical problems are appropriately

addressed and resolved to enhance the patient’s sense of accomplishment in the healthcare

experience. Frontline healthcare providers could also establish consistent post-service encounter

communications to identify any service encounter shortcomings that can lead to feeling of

service inefficiency. Providers should include more information-based communications which

could assist with developing more accurate expectations prior to receiving medical care in a

hospital and increasing the utilitarian value of the service experience.

However, prior to emphasizing utilitarian value, clinicians should at the very minimum

measure utilitarian value. From a practical point of view, an examination of the HCAHPS survey

finds that no direct utilitarian value measure in included within the instrument. Given this

oversight within the HCAHPS to include such an instrument, further refinement of utilitarian

value drivers are precluded until providers begin including the items for further analysis and

refinement so that valid antecedents can be derived.

Limitations

Several limitations emerge due to the nature of both survey research and healthcare

research. The first limitation beset on this research is that the dyad is not a matched sample of

Hedonic and Utilitarian Value and Patient Satisfaction 26

patients and providers. However, the patient sample and the provider sample both consist of

samples spread across the U.S. and are not constrained to any specific geographic area.

A second limitation in this research is the data are self-report survey research in both

groups. Survey research is known to have many drawbacks including yea-saying, respondent

fatigue, and high correlations between constructs (Churchill & Iacobucci, 2009). While these

limitations are true to all survey research, every attempt was made to reduce these problems by

using different scale types such as slider scales, Likert scales with different scale values, and

semantic differential scales.

Future research

Future research should attempt to link the value drivers proposed by Chahal and Kumari

(2011) to utilitarian value and hedonic value to allow for further investigation of hedonic and

utilitarian value within the healthcare service context. Additionally, both hedonic and utilitarian

value should be studied as to their relationship with HCAHPS, which measures patients’

perceptions of their care.

Given the findings regarding utilitarian value and satisfaction, future research should

examine the distribution elements of urgent care centers. These facilities offer less services than

do traditional hospitals, but are created and marketed based on location convenience, timely

service delivery, and less customer congestion. From a managerial perspective, these urgent care

centers could prove to be a viable patient option. Lastly, hedonic elements in healthcare deserve

further attention. While this research showed little effect of hedonic value within a hospital

context, future research should examine other contexts such as planned doctor’s office visits,

pediatrics, or cosmetic procedures. Researchers should also develop a hedonic value scale that is

germane to healthcare to complement the utilitarian value scale.

Hedonic and Utilitarian Value and Patient Satisfaction 27

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