Loyalty in Hospital Patients

Muhammad Nawawia

, Dyah Sugandini

, Heru Tri Sutiono

, Mersianti Rija Anandiha

Department of Management, Sekolah Tinggi Ilmu Ekonomi Trisna Negara, Sumatera Selatan

Universitas Pembangunan Nasional Veteran Yogyakarta

merchyrijaanandiha@gmail.com.

Keywords: Service quality, image, trust, and loyalty

Abstract: This study aims to analyze the effect of service quality and corporate image on loyalty mediated by trust. The

subjects of this study were inpatients in hospitals in Yogyakarta, South Sumatra, and East Nusa Tenggara.

This research includes a quantitative approach with survey methods. Retrieval of data in this study using a

questionnaire with a five-point Likert scale. The number of respondents in this study was 300 hospital patients

who were being a hospital undergoing treatment at the hospital. The data analysis method used is Partial Least

Square. The results showed that the quality of service had a positive effect on inpatient loyalty. The image of

the hospital has a positive effect on patient loyalty. The quality of service affects patient loyalty, which is

mediated by trust. The image of the hospital has a significant positive effect on patient loyalty mediated by

patient trust.

1 INTRODUCTION

Customer loyalty has become a central concept in

marketing theory and practice and is one of the

essential objectives for business activities. Customer

satisfaction contributes to several crucial aspects,

such as the creation of customer loyalty, increased

company reputation, reduced price elasticity, reduced

future transaction costs, and increased employee

efficiency and productivity (Berry, 1995); Chao

(2011). Hospitals need to make an effort to stay afloat

and grow because of the high hospital operational

costs accompanied by competition in hospital service

quality. Therefore, hospitals need to maintain and

increase patient visits by displaying quality health

services. Hospitals must also have a better

understanding of the importance of image,

Sulibhavi & Shivashankar (2017) suggest that the

effect of service quality on customer loyalty reveals

companies that do good service quality can increase

customer loyalty. This means that customer loyalty is

influenced by service quality. The quality of hospital

services has a strong relationship with patient loyalty

at the hospital. Whereas the influence of image on

loyalty Marilees and Fry (2002); Mayer et al., (1995)

says, the image has a direct effect on loyalty.

However, the image can be seen clearly as a predictor

of customer loyalty. A right image will form the

mindset of the community that if people have health

problems, people do not need to think twice about

where they will get health services, because based on

the experience they have experienced themselves or

based on the information they have obtained. This

study aims to analyze the loyalty of inpatients at the

hospital, because developing inpatient loyalty

requires unlimited challenges, especially now that

patients and families of patients are more critical in

choosing a hospital as a treatment facility, which can

compare one hospital's services with others,

especially in the quality of service (Ghaliyah &

Mubarok, 2017).

2 LITERATURE REVIEW

2.1 Loyalty

In general, loyal means loyal, or loyalty can be

interpreted as loyalty. The loyalty that occurs without

coercion, but arises from one's consciousness in the

past. Efforts made to create customer satisfaction are

more likely to influence customer attitudes

(Moorman et al., 1992). Whereas the concept of

customer loyalty explains more to the behavior of

buyers or service users. According to Kotler and

Keller (2016), Loyalty is a firm commitment to

Nawawia, M., Sugandini, D., Sutiono, H. and Anandiha, M.

Loyalty in Hospital Patients.

DOI: 10.5220/0009962600730078

In Proceedings of the International Conference of Business, Economy, Entrepreneurship and Management (ICBEEM 2019), pages 73-78

ISBN: 978-989-758-471-8

repurchase and subscribe to preferred products or

services in the future even though situational

influences and marketing efforts have the potential to

cause customers to switch to other products or

services. The commitment that accompanies repeated

purchases is a situation where the customer does not

want to move even though the product or service is

scarce in the market, and the customer voluntarily

recommends the product or service to colleagues,

family, or other customers.

There are two dimensions of loyalty, according to

Kesuma et al. (2013) that will affect customers,

namely: Behavioural dimensions and attitude.

Behavioral dimensions are aspects of customer

behavior (such as repurchase, purchase quantity,

purchase quality, purchase intensity), which are

indicated at a specified period. Although purchasing

is a crucial thing for marketers, interpreting loyalty

only to repurchase is not enough, because repeat

customers do not necessarily have a positive attitude

towards the goods or services purchased.

Repurchases are made not because they are satisfied

but because there are other factors. In other words,

there is no guarantee that the customer will

repurchase it from the relevant service provider if

there are other choices, both in price and service. The

attitude dimension is the intention and preference of

customers to buy certain services or products. The

intention to buy or recommend preferences for a

company is an essential factor in determining

business in the future. The higher the customer's

intention to repurchase or the intention to recommend

a service company indicates that the company has a

future business. The existence of the attitude

dimension given by Sulibhavi & Shivashankar

(2017), namely: Talking positive things about the

company; Willingness to repurchase; Willingness to

recommend to others; Commitment to the company

not to move to competitors; Encourage others to do

business with the company.

2.2 Trust

According to Mowen & Minor (2002), Consumer

belief is all knowledge possessed by consumers and

all conclusions consumers make about objects,

attributes, and benefits. Objects can be in the form of

products, people, companies, and everything where a

person has trust and attitude. Attributes are

characteristics or features that objects or may not

have. Attributes are divided into two, namely: first,

intrinsic attributes are anything related to the actual

nature of the product, while the second, extrinsic

attributes are everything obtained from external

aspects of the product such as brand names,

packaging, and labels. Finally, benefits are positive

results that contribute to consumers. Consumers form

three types of trust, namely: Trust attribute-object,

Knowledge about an object has a particular attribute

called object attribute trust. Trust attribute attributes

an attribute with an object, such as a person, goods,

or service. In the belief of attribute-objects,

consumers state what they know about something in

terms of variations in their attributes.

Trust attribute-benefits. Someone looking for

products and services will solve their problems and

meet their needs. In other words, they have attributes

that will provide benefits that can be known. This

relationship between attributes and benefits illustrates

a second type of trust, called benefit-attribute trust.

Benefit-attribute trust is a consumer's perception of

how far specific attributes produce or provide certain

benefits.

Benefit-object trust connecting objects and their

benefits form the third type of trust. Benefit-object

trust is the perception of consumers about how far

certain products, people or services will provide

specific benefits

2.3 Service Quality

According to Parasuraman (1998), Service quality is

a reflection of consumers' evaluative perceptions of

services received at a particular time. Meanwhile,

according to Sulibhavi &

Shivashankar (2017), one

of the factors that determine the level of success and

quality of the company is the company's ability to

provide services to customers. The success of a

company in providing quality services to its

customers, achieving a high market share, and

increasing the company's profits is primarily

determined by the approach used. Quality of service

is how far the difference between the expectations

and reality of the customers for the services they

receive. Service quality can be known by comparing

customer perceptions of the services they receive with

the actual service they expect. Service plays a vital

role because it is a supporting actor in marketing

activities. Service quality is the difference between

reality and customer expectations for the service they

receive. Pasuraman (1988) argues that the service

quality variable is measured by using the five

dimensions of Servqual consisting of Physical

evidence (Tangible), namely the company's ability to

demonstrate its existence to external parties. The

capability in question is the ability of the company's

physical facilities and infrastructure, and the state of

the surrounding environment is tangible evidence and

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

services provided. Physical evidence is measured

using 5 items, namely: physical facilities, access to

locations, staff/employee appearances, as well as

cleanliness and the environment.

Reliability is the company's ability to provide

services following what was promised accurately and

reliably. Reliability is measured using five items,

namely: timely service, patient acceptance

procedures, staff/employee availability, availability

in hearing patient complaints. Responsiveness ie, a

willingness to help and provide fast and accurate

service to customers, with precise information

delivery. Responsiveness was measured using four

items, namely: sympathetic staff/employee attitudes,

fast service to patients, responsiveness to patient

needs, and willingness to help patients.

Assurance is knowledge, politeness, and the

ability of company employees to grow customer trust

in the company. Dimensions of certainty or assurance

is a combination of dimensions: a) Competence,

meaning that the skills and knowledge possessed by

the employees to perform services. b) Courtesy,

which includes the friendliness, attention, and attitude

of the employees. c) Credibility (Credibility),

including matters relating to confidence in the

company, such as reputation, accomplishments, and

so on. Assurance is measured by using five items,

namely: staff/employee behavior, confidence and

trust in the care provided, proper service from the

beginning of treatment, security in interacting with

staff/employees, and polite/friendly attitude towards

staff/employees towards patients.

Empathy is giving sincere and individual or

personal attention given to customers. Empathy was

measured using four items: awareness of the patient's

interests, understanding of the patient's specific

needs, willingness to respond to patient requests, and

individual attention to patients.

2.4 Image

Kotler and Keller (2016) define an image as a set of

beliefs, ideas, and impressions held by someone

regarding an object. The image includes the

company's right name, reputation, or expertise of the

company. According to Chao (2011). Five factors can

affect the image of a company in a service company,

namely: Corporate Identity. Company identity is what

is displayed by the company. Identity is a company

statement to the public about what and who they are.

A company's identity can differentiate one company

from another.

Reputation is something that has been done by the

company and is believed to be the target public based

on the experience of itself or other parties, such as the

performance of a bank's transactions. Service

Offering when the company determines the services

to be provided to customers, the company must

ensure that services are provided on time so that

customers do not wait long to get these services. Long

waiting times can harm the company's image,

especially in situations where service providers have

control over waiting times, such as in financial

institutions.

The physical environment is a service that is

produced and is assumed to affect customer

perception of the company's image significantly.

Contact Personnel. Employee performance and

employee interaction through their attitude that takes

place at the time the service is given influences the

results of evaluating employees' service and

interactions to be one of the crucial things in the

company's image.

2.5 Research Hypothesis

Based on the discussion in the background,

theoretical basis, and frame of mind, the formulation

of hypotheses formulated to test its validity in

research carried out in hospitals is as follows:

H1: Service quality has a positive and significant

effect on loyalty in hospitalized patients.

H2: Hospital image has a positive and significant

effect on loyalty in hospitalized patients.

H3: Quality of service has a positive and significant

effect on patient loyalty, which is mediated by

trust in inpatients.

H4: Hospital image has a positive and significant

effect on patient loyalty which is mediated by

trust in hospitalized patients

3 RESEARCH METHOD

The research design is a plan of activities made by

researchers to solve problems so that that data will be

obtained following the research objectives. This

research method is a type of survey research. Based

on the hypothesis in the design of this study

determined the research variables that will be used in

research. The four variables in this study are loyalty,

trust, service quality, and company image. Next

determination of the sample from the study

population. Data collection in using interviews and

questionnaires. The collected data will be processed

using descriptive and quantitative analysis tools. The

analysis technique used for data analysis is Partial

Least Square (PLS). This study aims to determine the

Loyalty in Hospital Patients

effect of service quality and hospital image on loyalty

through trust.

The population in this study were all inpatients in

hospitals in Yogyakarta, South Sumatra, and East

Nusa Tenggara. Researchers chose to study inpatients

because it can facilitate researchers to retrieve data

and can be interviewed directly at the hospital. The

sampling technique in this study is convenience

sampling. The number of respondents in this study

was 300 people, divided into each province by 100

people. The analytical method used is Partial Least

Square (PLS) - SEM. PLS is a Structural Equation

Modeling (SEM) technique that can analyze latent

variables, indicator variables, and measurement

errors directly. PLS can be used with a small number

of samples and can be applied at all data scales.

4 RESULTS

4.1 Quantitative Analysis

Data processing techniques using the SEM method

based on Partial Least Square (PLS) requires two

stages. According to Chin, 1998 (in Ghozali, 2015),

reporting the results of PLS analysis uses a two-step

approach or also called a two-step approach. The first

is focused on the results of the measurement model

(Outer model), and the second is focused on the

results of the structural model (Inner Model).

4.2 Outer Model

The Outer Model focuses on testing the validity and

reliability of each indicator on its latent variable.

Indicators formed from the results of the Outer Model

are reflective indicators. Reflective indicators place

that changes in latent variables will affect changes in

indicators. Outer models with reflective indicators are

evaluated through:

Convergent Validity, which is the value of factor

loading on latent variables with the indicator. Value

loading factor> 0.7. Nevertheless, according to Chin,

1998 (in Ghozali, 2015), for the initial stage of

research, the development of a measurement scale of

loading values of 0.5 - 0.6 is considered sufficient. In

this research, a loading factor limit of 0.5 will be used.

In this testing phase, all indicators of the research

variables are valid and have met the convergent

validity or are declared valid because all indicators

have a loading value above 0.5.

Discriminant Validity, namely the cross-loading

correlation value with the latent variable, must be

greater 0.70. However, according to Ghozali (2015)

0.5 - 0.7 can still be said to be valid. All indicators

that pass the Cross loadings (Discriminant Validity)

test are all valid.

Average Variance Extracted (AVE). Expected

AVE value > 0.5 to be said to be valid. For all latent

variables having the value AVE > 0.5, for that, all

latent variables are said to be valid. Composite

Reliability is an excellent Composite Reliability

value if it has a value of ≥ 0.70. All latent variables in

this study have value. Composite Reliability ≥ 0.70,

for that, all latent variables are said to be Reliable.

4.3 Inner Model (Structural Model) or

also Called the Influence

Test/Hypothesis Test

The following is a table of the results of the structural

test /output inner model (influence test/hypothesis

test) after the indicator test.

Table 1. Reporting on Results of Inner Models / Influence

Tests / Hypothesis Tests

Original

Sample (O)

P-Values

Image 

Loyalty

0.169 0.030

Image 

Trust

0.516 0.000

Service

Quality 

Loyalty

0.144 0.028

Service

Quality 

Trust

0.427 0.000

Trust

Loyalty

0.605 0.000

The loyalty model developed in this study can be

seen in Figure 1.

Figure 1: PLS Alogritm Loyalty from

patients

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

5 DISCUSSION

5.1 The Coefficient of Determination

)

This indicates that the Trust is affected by the quality

of service and the image of the remaining 74.7% by

25.3% influenced by other factors that are not

included in the model. While patient loyalty is

influenced by the quality of services and the image of

the hospital by 74.9%, the remaining 25.1% is

influenced by other factors that are not in the model.

5.2 Q- square Predictive Relevance

)

Service Quality, Hospital Image, and Trust have an

influence on patient loyalty of 80.64%, and the model

in this study cannot detect the remaining 19.36%.

5.2.1 P-value

A variable hospital image of trust has a p-value of

0,000, and trust to loyalty has a p-value of 0,000.

Also, the influence of exogenous and endogenous

variables on other endogenous variables was stated to

be significant because the P-value was less than 0.05

(significance of 5%).

5.2.2 Parameter Coefficient

The magnitude of the parameter coefficient

influences the quality of service on trust by 42.7%.

The magnitude of the parameter coefficient

influences the quality of service on loyalty by 14.4%.

The magnitude of the parameter coefficient

influences the image of the hospital on trust by

51.6%. The magnitude of the parameter coefficient

effect of hospital image on loyalty is 16.9%. The

magnitude of the parameter coefficient influence of

trust on loyalty by 60.5%.

5.2.3 Path Analysis

For path, analysis can be seen in the table below.

Smart PLS directly produces output Path Coefficient

(Indirect Effect).

Table 2. Indirect

effects

Variable Original

Sample

Image  Trust  Loyalty 0.441

Service Quality  Trust  Loyalty 0.365

5.2.4 Hypothesis Test Results

Based on the results of the data analysis presented in

this study, it shows that all hypotheses submitted in

this study can all be supported

6 CONCLUSIONS

The quality of service has a positive effect on

inpatient loyalty at Image Hospital. The hospital has

a positive effect on patient loyalty at the hospital. The

quality of service has a significant positive effect on

patient loyalty that is mediated by the patient's trust.

The image of the hospital has a significant positive

effect on patient loyalty, which is mediated by the

patient's trust in the hospital.

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ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management