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The purpose of this paper is to develop a systematic approach to predict service quality dimension’s influence on service quality using a novel analysis based on data envelopment and SERVQUAL.

To assess hospital service quality in Tehran, expectation and perception of those who received the services were evaluated using SERVQUAL. The hospital service quality dimensions were found by exploratory factor analysis (EFA). To compare customer expectation and perception, perceived service quality index (PSQI) was measured using a new method based on common weights. A novel sensitivity approach was used to test the service quality factor’s impact on the PSQI.

A new service quality dimension named “trust in services” was found using EFA, which is not an original SERVQUAL factor. The approach was applied to assess the hospital’s service quality. Since the PSQI value was 0.76 it showed that improvements are needed to meet customer expectations. The results showed the factor order that affect PSQI. “Trust in services” has the strongest influence on PSQI followed by “tangibles,” “assurance,” “empathy,” and “responsiveness,” respectively.

This work gives managers insight into service quality by following a systematic method; i.e., measuring perceived service quality from the customer viewpoint and service factors’ impact on customer perception.

The procedure helps managers to select the required service quality dimensions which need improvement and predict their effects on customer perception.

A highly competitive market incentivizes private healthcare providers to deliver high quality services. The purpose of this paper is to identify the perceived expectations of a new private multi-speciality hospital in a non-metro city. To this end, the paper develops a model using identified relevant factors.

A structured questionnaire was administered to 900 people. Exploratory factor analysis and confirmatory factor analysis were then applied to the data, and partial least square-structural equation modelling was used to test the moderated mediation model.

Word-of-mouth and safety (WM) and access to the hospital and the cost of medical services are found to be important factors for the perceived expectations of the hospitals by medical facility and treatment at a hospital. High quality medical facilities can lead to improved perceived expectations of hospitals, mediated by positive WM. Levels of access to the hospital and the cost of services can significantly moderate the perceived expectations of a hospital, despite good medical facilities.

The study has implications for policymakers and hospital authorities in the context of private sector multi-speciality hospitals in non-metro cities. It will help healthcare managers and service providers to better understand customer perceived expectations, and thereby develop effective strategies for customer service. Decision-makers are encouraged to focus on positive word-of-mouth and enhancement of customer safety to bring about favourable expectations of hospitals. Beyond merely having excellent medical facilities, hospitals that ensure ease of access to the hospital and keep costs low can achieve positive consumer expectations and satisfaction levels.

The paper makes three novel contributions as follows: the mere presence of high quality medical facilities and practices does not equate to positive expectations about the hospital among the patients; access to the hospital and the cost of its services are important in bringing about positive expectations among healthcare consumers; and WM can significantly moderate positive expectations of the hospital. The authors are not aware of any of these findings being previously reported.