The effect of ownership status and performance indicators on perceived quality of hospitals

The New Public Management (NPM) movement advocates freedom of choice between public service providers as a good on its own, as well as a way to increase efficiency in public services. In the context of healthcare, this translates among others also into a freedom to choose a hospital for treatment. Our extensive literature review shows that although substantial research has already been conducted into the factors driving the decisions of individual patients, previous studies called for further investigations regarding the effect of performance indicators and ownership status on the perceived quality of hospitals. This study examines these relationships by conducting an experimental survey on a sample of 425 Slovak citizens. We find evidence that private hospitals are viewed more favourably than public ones, while those with a high performance rating are viewed more favourably than those with a low rating. In particular, the respondents expect to receive a more effective treatment and to also feel better in private and highly rated hospitals than in public and low rated ones, respectively. This suggests that managers of private hospitals should make use of the ownership status in their marketing and communication strategy, as people surprisingly consider ownership status a better indicator of quality than performance ratings. Nevertheless, we also argue that there might be a case for establishment of an executive agency responsible for evaluation of quality among hospitals in Slovakia.