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SOLVED!! A reputable hospital has high quality ratings from patient satisfaction surveys but is still losing market share

Question 1

A reputable hospital has high quality ratings from patient satisfaction surveys but is still losing market share. For many years, health care organizations, as well as traditional businesses, have been frustrated that high customer satisfaction scores do not necessarily lead to higher levels of profitability or sales.

Prepare a report examining this phenomenon that address the following elements:

  • Evaluate and explain inconsistency between customer satisfaction scores and profitability and why it tends to exist in health care organizations.
  • Apply the statistical procedures discussed in class to support (or refute) the inconsistency.
    Assess price vs. quality of services as well as the impact of insurance or managed care contracts on a hospital’s market share, regardless of patient satisfaction levels.
  • Explain how you could use high patient satisfaction results to your advantage when negotiating a new managed care contract for the hospital. Discuss ethical issues involved when presenting results.
  • Discuss how qualitative and quantitative data can be used to help this hospital improve market share.

The body of the resultant report should be 5–7 pages and include at least 5 relevant peer­reviewed academic or professional references published within the past 5 years.

Expert Answer and Explanation


The primary essence of any hospital facility is to provide quality medical services for their patients. Additionally, patients tend to be concerned with three aspects of care delivery within the hospitals, notably, quality, access and cost of healthcare services (Pitkin Derose, Bahney, Lurie & Escarce, 2009). Keeping the costs low, improving access to the medical services and making quality superior would tend to guarantee higher access to medical services that are offered by a facility. Patient satisfaction surveys are often methodological and scientific tools that are used by hospitals to determine the extent to which patients are satisfied with the set of services that they offer to them. The surveys also provide the facility with information on the aspects of care delivery that they will need to improve on. Presently, there is an emerging phenomenon that establishes that high customer satisfaction in hospitals does not necessarily lead to higher levels of revenue or profitability in hospitals. This paper discusses the case of a reputable hospital that has high-quality ratings from patient satisfaction surveys but is still losing its market share.

Inconsistency between customer satisfaction scores and profitability

The customer satisfaction scores are often premised on the quality of medical services that the facility offers to patients. Patients are willing to pay more for quality services and have access to qualified and highly trained medical personnel. The brand of any given medical facility often tends to rest with the quality of services that they offer to their clients. Economically, the accomplishment of profitability would often be realized when the liabilities of an entity is lower than the revenue that they earn. However, for the reputable hospital, they often experience a higher wage bill, owing to the quality of expertise that the employee and higher operational costs. Such tend to cut down on the total revenue that they earn from their set of operations. The lack of lean management within the reputable hospitals would also lead to the facilities experiencing a higher volume of wastes which then eats on the profitability that the company needed to realize(Graban, 2016).  Additionally, the hospital facilities that tend to emphasize their brand are often wished away by their concept of customer loyalty. While the few patients that the facility serves to grant higher ratings for the facility, the facility serves few people and earns low revenue that makes it difficult for them to break even.

Statistical Procedures

According to Schmocker, Stafford and Winslow (2019), logistic regression is an analytical procedure that can be utilized in the examination of the relationship between the binary variable and independent variables within the healthcare setting. The concept can further be used in the explanation of the relationship between an effect and treatment. Medical institutions would often utilize such data in the redesigning of their health programs and determination of the level of care that would lead to better patient outcomes. The better patients outcomes would often lead to the patients issuing higher ratings to the facility, thus, resulting in an improvement in the scores that the patients would grant to the facility. In the field of medicine, regression can be used in the explanation of the relationship between a type of treatment that is issued by the facility and the reduction in the symptoms that the patients are likely to experience.

Price vs. quality of services as well as the impact of insurance or managed care contracts on a hospital’s market share

The provision of higher quality medical services at relatively lower costs would conventionally lead to an improvement in the market share that is held by a given business entity. While higher quality is the primary factor that patients would use, costs are deterrent to many patients. Some patients would also sacrifice either their earnings or investment to access medical services. Therefore, the facilities that charge premium prices for their facilities would tend to attract fewer people, thus, low market share. Insurance and managed care contracts also serve to improve the market share that is held by a given medical facility. In the United States, healthcare is majorly privatized with many patients either have a subscription to private medical insurance schemes, Medicare or Medicaid. The provision of access to quality services for patients with different insurance schemes would lead to a higher proportion of the patients who would prefer utilizing the services of such a facility. The managed care contracts also tend to enhance access to restricted medical services are costs that are slightly discounted (Drury & Whalen, 2018). The hospital is often confident that they will issue medical services to those enrolled in the managed care contracts, thus increasing their market share.

Using high patient satisfaction results to your advantage when negotiating a new managed care contract for the hospital

Top patient satisfaction results are often used to convince the public and potential clients that the services that the facility offers are superior and would lead to improvement in the patient outcomes. When negotiating for a new managed care contract, the organization or individual making the negotiation often tend to have an emphasis on the quality of services that the facility would issue to their members and the discounts that they would receive. However, there are a set of ethical standards that the facility would need to look into. First, patient satisfaction results need to be honest and recent. That is, the results should have been the last taken and should have been filled in by the clients attended to by the facility. Second, the data should adhere to the principle of confidentiality. The bio-data of the patients who took part in filling the patient satisfaction survey need to be hidden and only relevant statics issued to the concerned patients to make a decision on whether to sign for the new managed care contract. Third, the data should not be exploitative regarding the agreement that the facility would need to establish with the entity to whom they enter with to the new contract.

Qualitative and Quantitative Data

The qualitative data that can be sought when investigating how to improve the market share of a hospital include interviews, narrative-based medicine, and observation-based methods. Narrative-Based medicine enables the physicians to establish a patient-centered approach that would be critical to the improvement of healthcare decisions that are sought by the given facility (Launer, 2017). The interviews can either be structured or semi-structured. They can also be used in the determination of the experiences that the patients had within the facility and the attitudes that they have towards the hospital staff and the quality of service delivery. Such information would be used in the improvement of the services that the facility offers, leading to an increased preference of the facility by patients. Consequently, the market share of the facility would tend to rise.

Quantitative data often is critical in the assessment of the quality of services that the facility offers to its patients. The quantitative data include the patients admitted in the wards, newly born deliveries, emergency room visits, Quarterly financial income within the facility and the hospital discharge volume. Such is essential in the examination of the extent to which the target clients prefer the set of services that are preferred the facility. Such can then lead to proper decision making on the measures that could be undertaken to improve on the overall healthcare outcome of the patients, the value that the patients would need and the costing strategy that the medical facility would need to seek.


Concisely, data, both qualitative and quantitative is essential in the overall improvement of the set of services that are issued by a medical facility. However, the strategies that a medical facility chooses needs to anchor on the principles of accessibility, quality, and cost. Medical facilities should issue quality services at affordable rates and find creative ways through which they would improve access to the set of services that they offer to their target markets. Additionally, the improvement in the market share of the medical facility is another area of consideration that the leaders of the facility need to consider. The sustenance of the facility and expansion to improve access to healthcare is premised on the capability of the medical facilities to generate revenues that are higher than the costs that they incur. As such, the adoption of both qualitative and quantitative data techniques would often guide the management of the hospital in making decisions of the adjustments that they need to do to realize higher customer satisfaction scores and improvement in the market share that they hold.

Question 2

Surveys such as the Consumer Assessment of Healthcare Providers and Systems (CAHPS) are based on sound research principles such as with randomized sampling, high response rates, and other systems to reduce bias.

What are some of the types of bias, and how might bias distort data reporting?

In your own words, please post a response to the Discussion Board, and comment on other postings. You will be graded on the quality of your postings.
For assistance with your assignment, please use your text, Web resources, and all course materials.

Expert Answer and Explanation

Some of the types of bias that are concerning the Consumer Assessment of Healthcare Providers and Systems (CAHPS) include low response rates and outcome reporting biases. Low response rates impacts on the validity and reliability of the study and would make the findings of the survey not apply to the entire study population. The outcome reporting biases would also be misleading to the stakeholders of a medical facility, especially where favorable outcomes of the survey to the facility are published. The biases also have the capability of distorting data reporting. Publication bias is likely to take place. The studies that tend to have favorable reporting would have higher chances of being published by the institution while those with negative findings would take a relatively longer duration to be released.

As a response to the feedback on the discussion board, there it is indeed accurate to state that biases would often interfere with the validity and reliability of any given study. The time lag bias is often evident when medical facilities would not want to publish the results of the consumer assessment surveys on the account that they do not provide the results that are wanted by the facility. Such could lead to the presentation of information to the target clients of the facility that would be misleading, thus, neither valid for reliable for utilization when examining the market share of the facility.


Drury, M., & Whalen, M. (2018). Managed care: practice and progress. CRC Press.

Graban, M. (2016). Lean hospitals: improving quality, patient safety, and employee engagement. Productivity Press.

Launer, J. (2017). Narrative-based primary care: a practical guide. CRC Press.

Pitkin Derose, K., Bahney, B. W., Lurie, N., & Escarce, J. J. (2009). Immigrants and health care access, quality, and cost. Medical Care Research and Review66(4), 355-408.

Schmocker, R. K., Stafford, L. M. C., & Winslow, E. R. (2019). Satisfaction with surgeon care as measured by the Surgery-CAHPS survey is not related to NSQIP outcomes. Surgery165(3), 510-515.

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