Skip to main content
SpringerLink
Log in

An applied stochastic model of the quality–quantity trade-off in the public health care sector

  • Research Note
  • Published:
Quality & Quantity Aims and scope Submit manuscript

Abstract

It is a striking feature of the many of the developing country public service sectors that the sectors in question often overproduce the quantity of services but underproduce the quality. This feature, which is exemplified in this paper, is rooted in a wide spectrum of economic and sociological factors ranging from the economic and sociological profile of the service receiving people to the asymmetric density of service-receiving population across their regions. This feature, we conjecture, is a source of a considerable degree of suboptimality in some of the developing countries. If our conjecture is correct, correcting such suboptimalities is likely to yield significant welfare improvements that could help speed up the process of development in the underdeveloped regions of the world. To analyze the supoopimalites in question, we will first develop a concept (and a model) of optimal quality in the public service sector, which indicates the level of quality that maximizes expected public satisfaction subject to available resources. Resources are used in an efficient manner to produce the service in question. The concept and the model in the paper make a needed contribution to the quality discourse by presenting a way of determining the quality improvements (or adjustments) necessary to achieve optimum in the public service sector. The paper presents an application (a case study) of this new concept in the public healthcare sector in Turkey, and explores the differences between the actual and optimal quality in the sector in question. It turns out that there is a considerable difference between the actual and optimal levels of quality (as well as those of quantity) in the Turkish public healthcare sector in an overpopulated city (Istanbul), indicating a significant overproduction of quantity and underproduction of quality. Thus, to achieve the optimal levels, the sector should increase quality and reduce quantity by a considerable margin. The quantified differences (gaps) between actual and optimal levels point out a considerable room for welfare improvement. Optimum-seeking adjustments closing these gaps could be shown to lead to considerable satisfaction and welfare gains, the measurement of which is worthy of future research.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Andaleeb S.S. (2001). Service quality perceptions and patient satisfaction: a study of hospitals in the developing country. Soci. Sci. Med. 52: 1359–1370

    Article  Google Scholar 

  • Babakus E. and Boller W.G. (1992). An empirical assessment of the SERVQUAL scale. J. B. res. 24: 253–268

    Article  Google Scholar 

  • Bartel, A.P., Harrison, A.E.: Ownership versus Environment: why are Public Sector Firms Inefficient. National Bureau of Economic Research, Working Paper (1999)

  • Bloemer J., Ruyter deK. and Wetzels M. (1999). Linking perceived service quality and service loyalty: a multi-dimensional perspective. Eur. J. Mark. 33(11/12): 1082–1106

    Article  Google Scholar 

  • Brady K.M. and Cronin J.J. (2001). Some new thoughts on conceptualizing perceived service quality: a hierarchical approach. J. Mark. 65: 34–49

    Article  Google Scholar 

  • Carman M.J. (1990). Consumer perceptions of service quality: an assessment of the SERVQUAL dimentions. J. Retailing 66: 33–55

    Google Scholar 

  • Caruana A., Money H.A. and Berthon R.P. (2000). Service quality and satisfaction—the moderating role of value. Eur. J. Mark. 34(11/12): 1338–1352

    Article  Google Scholar 

  • (1997). Public expenditure: Effective Management and Control. Harcourt Brace, Dryden Press, New York

    Google Scholar 

  • Taylor A.S. and Cronin J.J. (1992). Measuring service quality: a reexamination and extension. J. Mark. 56: 56–68

    Article  Google Scholar 

  • Taylor A.S. and Cronin J.J. (1994). SERVPERF versus SERVQUAL: Reconciling performance –based and perception – minus – expectations measurement of service quality. J. Mark. 58: 125–131

    Article  Google Scholar 

  • Crosby P.B. (1980). Quality is Free. New American Library, New York

    Google Scholar 

  • Dabholkar A.P., Shepherd C.D. and Thorpe I.D. (2000). A comprehensive framework for service quality: an investigation of critical conceptual and measurement issues through a longitudinal study. J. Retailing 76(2): 139–173

    Article  Google Scholar 

  • Deming, W.E.: Improvement of quality and productivity through action by management. Nat. Pro. Rev. 1(1), 12–22 (1981–1982)

    Google Scholar 

  • Domberger S. and Jensen P. (1997). Contracting out by the public sector: theory, evidence, prospects. Oxf. Rev. Econ. Policy 13(4): 67–78

    Article  Google Scholar 

  • Downes T.A. and Figlio D.N. (1999). Do tax and expenditure limits provide a free lunch? Evidence on the link between limits and public sector quality. Nat. Tax J. 52(1): 113–128

    Google Scholar 

  • Duncombe W., Miner J. and Ruggiero J. (1997). Empirical evaluation of bureaucratic models of inefficiency. Public Choice 93(1–2): 1–18

    Article  Google Scholar 

  • Evans J.R. and Dean J.W. (2003). Total Qualty: Management, Organization and Strategy. Thompson and South-Western, Ohio

    Google Scholar 

  • Fayek N.Y., Nel D. and Bovaird T. (1996). Health care quality in NHS hospitals. Int. J. Health Care Qual. Assur. 9(1): 15–28

    Article  Google Scholar 

  • Haskel, J., Sanchis, A.: A Bargaining Model of Farrell Inefficiency. CEPR Discussion Papers, Working Paper (1998)

  • Juran, J.M.: The quality triology. Qual. Prog. 19–24 (1986)

  • Juran J.M. and Gryna F.M. (1993). Quality Planning and Analysis. McGraw Hill, New York

    Google Scholar 

  • Kanji G.K. and Yui H. (1997). Total quality culture. Total Qual. Manage. 8(6): 417–428

    Article  Google Scholar 

  • Kanji G.K., Tambi A.M.B. and Wallace W. (1999). A Comparative study of quality practices in higher education institutions in the US and Malaysia. Total Qual. Manage. 10(3): 357–371

    Article  Google Scholar 

  • Kanji G.K. and Sa P.M.E. (2003). Sustaining healthcare excellence through performance measurement. Total Qual. Manage. Bus. Excell. 14(3): 269–289

    Article  Google Scholar 

  • Kara A. (2005). A concept of optimal quality and an application. Total Qual. Manage. Bus. Excell. 16(2): 243–255

    Article  Google Scholar 

  • Kara A., Tarım M. and Zaim S. (2003). A low performance-low quality trap in the nonprofit healthcare sector in Turkey and a solution. Total Qual. Manage. Bus. Excell. 14(10): 1131–1141

    Article  Google Scholar 

  • Kara, A., Tarım, M., Zaim, S.: A dynamic model and empirical examination of performance and customer satisfaction in a non-profit health-care sector in Turkey. In: Tarim, M., Zaim, S. (eds.), Proceedings of International Management Development Association Conference pp. 519–526 (2002a)

  • Kara, A., Tarım, M., Zaim, S.: Expectation and performance-based determinants of service quality: a special case at a non-profit hospital in Turkey. In: Proceedings of International Management Development Association Conference pp. 556–562 (2002b)

  • Kara A., Lonial S., Tarım M. and Zaim S. (2005). A paradox of service quality in Turkey. Eur. Bus. Rev. 17(1): 5–20

    Article  Google Scholar 

  • Kara A. (2000). Dynamic Modeling Exercises. Fatih University, Mimeo

    Google Scholar 

  • Karlaftis M. and MacCarthy P. (1999). The effect of privatization on public transit costs. J. Regul. Econ. 16(1): 27–43

    Article  Google Scholar 

  • Kaya, S.: Developing a Quality Management Program for the Ministry of Health Hospitals in Turkey. Takemi Program in International Health. Harvard School of Public Health, Research Paper (2000)

  • Li X.L. and Collier A.D. (2000). The role of technology and quality on hospital financial performance: an exploratory analysis. Int. J. Serv. Ind. Manage. 11(3): 202–224

    Article  Google Scholar 

  • Lim P.C. and Tang N.K.H. (2000). The development of a model for total quality healthcare. Manag. Serv. Qual. 10(2): 103–111

    Article  Google Scholar 

  • Nicholson, W.: Microeconomic Theory. Dryden Press (1998)

  • Parasuraman A., Zeithaml V.A. and Berry L.L. (1985). A conceptual model of service quality and its implications for future research. J. Market. 49: 41–50

    Article  Google Scholar 

  • Parasuraman A., Zeithaml V.A. and Berry L.L. (1988). SERVQUAL: A multiple item scale for measuring customer perceptions of service quality. J. Retailing 64: 12–40

    Google Scholar 

  • Parasuraman A., Zeithaml V.A. and Berry L.L. (1991). Refinement and reassessment of the SERVQUAL scale. J. Retailing 67: 420–450

    Google Scholar 

  • Rao A., Carr L.P., Dambolena I., Kopp R.J., Martin J., Rafii F. and Schlesinger P.F. (1996). Total Quality Management. Wiley, New York

    Google Scholar 

  • Savas B.S., Karahan Ö., Saka R.Ö. Health care systems in transition: Turkey. In: Thompson, S., Mossialos, E. (eds.) Health Care Systems in Transition, Vol. 4(4), European Observatory on Health Care Systems, Copenhagen (2002)

  • Shi M.S. (1994). The inefficiency of the public sector and trade theorems: a simple general equilibrium analysis. Acad. Econ. Pap. 22(2): 211–35

    Google Scholar 

  • Sivadas E. and Baker-Prewitt J.L. (2000). An examination of the relationship between service quality, customer satisfaction and store loyalty. Int. J. Retail Distrib. Manage. 28(2): 73–82

    Article  Google Scholar 

  • Scrivens E. (1995). International trends in accreditation. Int. J. Health Plann. Manage. 10: 165–181

    Article  Google Scholar 

  • Tanzi, V.: The Role of the State and the Quality of the Public Sector. IMF Working Papers (2000)

  • Taylor A.S. and Cronin J.J. (1994). Modeling patient satisfaction and service quality. J. Health Care Mark. 14(1): 34–45

    Google Scholar 

  • Teas R.K. (1994). Expectations as a comparison standard in measuring service quality: an assessment of a reassessment. J. Mark. 58: 132–139

    Article  Google Scholar 

  • West D.M. (2004). Government and the transformation of service delivery and citizens attitudes. Public Adm. Rev. 64(1): 15–27

    Article  Google Scholar 

  • World Bank.: Honduras: toward Better Health care for All. World Bank County Study, Washington (1998)

  • Yavas U., Bilgin Z. and Shemwell D.J. (1997). Service quality in the banking sector in an emerging economy: A consumer survey. Int. J. Bank Market. 15(6): 217–223

    Article  Google Scholar 

  • Yavas U. and Shemwell D.J. (2001). Modified importance-performance analysis: an application to hospitals. Int. J. Health Care Qual. Assur. 14(3): 104–110

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Fatih University, Istanbul, Turkey

    Ahmet Kara

Authors
  1. Ahmet Kara
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Ahmet Kara.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Kara, A. An applied stochastic model of the quality–quantity trade-off in the public health care sector. Qual Quant 43, 277–289 (2009). https://doi.org/10.1007/s11135-007-9106-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11135-007-9106-2

Keywords

Search

Navigation