J. Multidiscip. Res. Healthcare

Service-Profit Chain Analysis in Healthcare Services

Pratyush Ranjan and Peeyush Ranjan

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  • DOI Number
    http://doi.org/10.15415/jmrh.2018.42008
KEYWORDS

Customer Satisfaction; Employee Productivity; Hospital Management; Service-Profit Chain.

PUBLISHED DATE April 02, 2018
PUBLISHER The Author(s) 2018. This article is published with open access at www.chitkara.edu.in/publications.
ABSTRACT

Focus on service-profit chain by organizations in the service sector has been found to be of crucial importance. Companies in varied sectors like banking, airlines, restaurants and healthcare have become industry leaders by focusing on aspects of service-profit chain. This paper presents an analysis of service-profit chain in the healthcare sector. Taking two examples of hospitals from India and one from abroad this paper brings out the importance of focusing on the service-profit chain in this sector. An analysis of the practices in these hospitals, with a major focus on Aravind Eye Hospital, will give a perspective of how these hospitals have focused on the service-profit chain and made them efficient and effective and have enhanced their customers’ satisfaction. Service-profit chain analysis can help healthcare organizations to be customer focused. It can motivate organizations to develop attractive value propositions for customers. It can also provide a warning to organizations that are neglecting the interests of employees. Overall, the service-profit chain provides a useful framework for healthcare organizations in developing their strategy as well as implementing day-to-day operations.

INTRODUCTION

Service-profit chain is one of the most important areas of enquiry that concerns delivery of services in its totality. The chain shows how various links can affect the revenues of an organization. Frontline employees play a very crucial role in this link, as they are the ones who are interacting the most with customers (Heskett, Jones, Loveman, Sasser, & Schlesinger, 1994). Heskett et al. (1994) contend that when organizations keep customers and employees at the center of their decision making, a radical change occurs in the way the organization does its business. It has been estimated that the lifetime value of a loyal customer can be huge taking into account retention, repeat purchase and referrals due to these customers. A growing number of companies across varied sectors like banking, airlines, restaurants, and healthcare have focused on the service-profit chain to become service leaders in their areas through increased customer satisfaction (Chicu, Valverde, Ryan, & Batt, 2016; Gelade & Young, 2005; Lee, Lee, & Kang, 2012; Javalgi & Moberg, 1997). This paper presents an analysis of the service-profit chain in the healthcare services. With the help of a few examples, mostly from the Indian context, the paper will try to illustrate the benefits of focusing on the service-profit chain in this sector. It may be seen that healthcare organizations can greatly benefit by focusing on all the links of this chain.

Page(s) 95-100
URL http://dspace.chitkara.edu.in/jspui/bitstream/123456789/780/1/JMRH003.pdf
ISSN 2393-8536, Online : 2393-8544
DOI http://doi.org/10.15415/jmrh.2018.42008
CONCLUSION

Service-profit chain analysis can help healthcare organizations to be customer focused. It can motivate organizations to develop attractive value propositions for customers. It can also provide a warning to organizations that are neglecting the interests of employees. Overall, the service-profit chain provides a useful framework for healthcare organizations in developing their strategy as well as implementing day-today operations. However, it should be kept in mind that healthcare services are unique in some sense compared to other services, as most of the customers are first time customers of the organization and they would most likely not want to be in a situation of repeat purchase

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