This paper aimed to examine a conceptual model for the relationships between hospital service quality, patient satisfaction, hospital utilization, and hospital financial performance. A total of 176 hospitals was selected from California State for this study. The standardized performance measures were used together with precisely defined specifications and standardized data-collection protocols. First, an exploratory factor analysis with Varimax rotation was performed. The measurement properties were then assessed in a confirmatory factor analysis (CFA). The analysis results show that quality had a significant effect on satisfaction, which, in turn, affected the financial performance. The results provide support for the previous findings indicated that service quality was positively associated with patient satisfaction and that satisfaction and utilization had a significant positive effect on financial performance. The analysis results provide support for the previous findings that hospital service quality is positively related to patient satisfaction. The findings also show that patient satisfaction and hospital utilization have a significant positive effect on hospital financial performance.
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Patient satisfaction shows a significant effect on hospital financial performance with a path coefficient of 0.24 but shows no significant effect on hospital utilization. These results support Hypothesis 2a but do not support Hypothesis 2b. Increased patient satisfaction leads to better hospital financial performance but does not necessarily increase hospital utilization. As expected, the path coefficient of 0.27 from hospital utilization to hospital financial performance is significant at the 0.05 level. Hypothesis 3 is supported by the results.
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