RESEARCH ARTICLES

 

Customer Perceptions and Expectations of Medical Insurance Service Quality rendered by Companies in Zimbabwe

 

 

T Mufudza^I, ; V Naidoo^II

^ISchool of Management, Information Technology and Governance. University of KwaZulu-Natal tsimufudza@gmail.com
^IISchool of Management, Information Technology and Governance. University of KwaZulu-Natal naidoova@ukzn.ac.za

 

 

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ABSTRACT

Private health insurance has been slow to emerge in many countries due to the controversies around it. The negative side of these controversies is that little research has been conducted in the area. This study undertook to establish the service quality dimensions most significant in bringing efficiency, profitability and sustainability to the Zimbabwean medical insurance industry threatened by increased competition and economic challenges. Continued subscription by customers in such a volatile situation requires an alignment of services offered with customer needs. The study was a cross-sectional survey in which a quantitative research method was employed. The theoretical underpinnings were the Gaps and Servqual models. The data were collected from 384 medical insurance customers at five medical institutions in Harare. A total of 286 questionnaires were completed, giving a response rate of 74%.
The study found that medical insurance customers were dissatisfied with its services. The highest levels of dissatisfaction were expressed towards the reliability dimension, while the lowest levels referred to tangibles. The levels of dissatisfaction varied across the dimensions with different age groups and different medical insurance companies. Strategies to close the service quality gaps are suggested with some managerial and theoretical implications of the study being highlighted.

Key phrases: Customer expectations; customer perceptions; service quality; medical insurance and private health insurance

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1. INTRODUCTION

The rising cost of healthcare services has stirred a debate on the best ways to provide affordable high quality medical insurance (Einav & Levin 2015:998; You, Kang, Choi, Oh & Kwon 2014:101). This debate has arisen because illness carries with it a high risk of impoverishment for households. This is particularly so in developing countries such as Zimbabwe. Medical insurance is considered as a reliable means of reducing the risk caused by ill health. There are two types of medical health insurance, namely private health insurance and public health insurance.

Private health insurance is among a number of health policy issues viewed with scepticism in many countries (Colombo 2007:211; Lehtonen 2017:1; Pauly, Zweifel, Preker & Basset 2006:369).The scepticism is a result of the costs that are incumbent on private health insurance, costs which render such medical insurance discriminatory (Doherty 2015:i93; Nguyen & Worthington 2017:1;Pauly et al. 2006:372; Preker, Scheffler & Basset, 2007:188). An additional problem derives from the fact that private health insurance has thus far not been well- researched (Sekhri & Savedoff 2005:132) especially in developing nations.

Although Zimbabwe is cited as one of the few developing African countries that has successfully adopted private health insurance (Doherty 2015:i95; Pauly et al. 2006:378; Sekhri & Savedoff 2005:132), the customer perception of the Zimbabwean health insurance industry is not yet well-researched. Customer perception has a bearing on customer patronage, loyalty and customer relationship management in the health insurance service industry (Hapsari, Clemes & Dean 2017:21; Kiran & Diljit 2017:95). In turn customer patronage, loyalty and relations determine organisational competitive advantage and performance. Although Zimbabwe is reported as having enacted regulations directed at ensuring quality service in the health insurance sector (Doherty 2015:i96; Sanyanga 2014:5-8), customer perceptions of such measures have not yet been documented.

Zimbabwean medical insurance companies have, over the years, experienced difficulties in paying employee wages and salaries as well as honouring the medical bills of their subscribers. This downward trend is indicative of a continuous decline in performance (Obert, Okay & Desderio 2016:63). Companies in Zimbabwe's health insurance industry are continually being exhorted to improve the quality of their service and thereby attract new customers and retain old ones (Nyamutswa 2014:4). Given that customers demand value for money, the delivery of reliable, quality medical insurance to subscribers is, therefore, of essence. This study is intended to assist health insurance companies in their endeavours to improve service delivery and gain competitive advantage in an industry threatened by increased competition coupled with the harsh economic conditions prevailing (Sanyanga 2014:9).

Since there has been little interrogation of service quality in the area of private health insurance, this study is critical in closing the gap in literature and in extending the body of knowledge of service quality in the context of the medical insurance industry in Zimbabwe. The study also has the potential to disseminate valuable information to medical insurance companies, to managers and the government among others thereby enhancing the concerted efforts by all concerned to sustain the industry. Furthermore, since the study was conducted in a developing African country with a unique socio-economic background, the study generates further knowledge on the nature of service quality experiences encountered under such unique settings.

1.1 Research problem

Customer perceptions and expectations of service quality in the Zimbabwean health insurance sector have not been documented, and yet they are significant to medical companies in building competitive advantages and survive in the industry. The poor performance of the industry and the increased competitive pressures, worsened by the economic crisis prevailing in the country, call for players in the industry to align the services they offer with customer-needs. In a volatile economic situation such as currently prevailing in Zimbabwe, the customer wants value for money and satisfaction. Accordingly, the service of their current health insurer is a significant determinant of loyalty to that insurer. In this regard, the delivery of superior service to customers is critical for the survival of firms in this industry.

1.2 Research objectives

In an effort to solve the research problem, the objectives of the study were formulated as follows:

■ To establish the perceptions of medical insurance customers of service quality variables with respect to tangibles, reliability, responsiveness, assurance and empathy.

■ To determine customer-expectations regarding the quality of services provided by medical insurance companies with respect to tangibles, reliability, responsiveness, assurance and empathy.

■ To measure the service quality gaps that medical insurance clients experience in Zimbabwe.

 

2. LITERATURE REVIEW

In the brief literature review below, some views on medical insurance and service quality with specific reference to the medical insurance industry are put forward and discussed.

2.1 Medical insurance

Medical insurance is defined as a mechanism for the financing of health care and whose purpose is to ensure that health care is made available to subscribers at any time without their having to endure out-of-pocket payments (Kasule 2012:61; Pauly et al. 2006:373). Medical insurance is regarded as a significant aspect of assurance in the area of social wellbeing (Liubao, Huihui & Jian 2017:1193). Wu, Liu, Zhu and Mao (2016:A846) confirmed that medical insurance is a means of rescuing citizens from the risk of poverty caused by chronic disease. The main focus of this study is on private health insurance service. Private health insurance is generally depicted by its "voluntary" or intentional and profit-making nature differentiated from the obligatory or mandatory characteristic of public or government insurance (Sekhri & Savedoff 2005).

In Zimbabwe medical insurance companies are described as voluntary private non-profit institutions (Munyuki & Jasi 2009:11; Shamu, Loewenson, Machemedze, Mabika & Africa 2010:9). However, Munyuki and Jasi (2009:11) describe Zimbabwean medical insurance as being "misleadingly described as non-profit" for "tax purposes" only. There are five distinct forms of ownership in Zimbabwe (Shamu et al. 2010:9), and these are the government, corporate general insurance companies, private health insurance companies, urban councils and provider-initiated ownership.

Muth (2017:120) cited Zimbabwe as having a competitive public health insurance model, which was even tempting to recommend to other Least Developed Countries (LDCs). However, customer perceptions of the recommended public health insurance model are as yet undocumented.

2.2. A brief background and overview of the Zimbabwean medical insurance industry

Medical insurance in Zimbabwe dates back to 1930 when the Public Service Medical Aid Society (PSMAS) was formed to cater for government employees (PSMAS nd: Internet). The Commercial and Industrialised Medical Aid Society (CIMAS) began operations in 1945 and was designed for the private sector (CIMAS nd: Internet). Prior to the nineties, PSMAS and CIMAS were the major players in the industry together with a few in-house medical insurance companies that catered for specific industries, and this accounted for their large joint market share in the industry which is estimated to be around 80 per cent (Shamu et al. 2010:5). Following the Economic Structural Adjustment Programme (ESAP) post-1990, the industry was joined by new players and deregulation became unavoidable (Shamu et al. 2010:2). The current number of players in the industry is around 30, with10 of these being in-house companies for specific industries (Sanyanga 2014:4). PSMAS and CIMAS have since opened up membership to non-governmental and governmental employees respectively (Munyuki and Jasi 2009:11).

Zimbabwe's medical insurance industry is largely dependent on the formal employment sector which caters for only 7 per cent of the population (Buzuzi, Chandiwana, Munyati, Chirwa, Mashange, Chandiwana, Fustukian, & McPake 2016:23; Musungwini 2012:Internet; Sanyanga 2014:20). This sector, however, is continuously dwindling due to the poor macro-economic conditions prevailing in the country. The end result of this constricted economic space is the inevitable stiffening of competition in the industry (Sanyanga 2014:9-11). This, therefore, calls for the upgrading of the quality of services offered by medical insurance companies. Only in that way can the companies increase their chances of survival in the industry by maintaining their client base and possibly recruiting new ones.

2.3 Service quality

"Service quality can be defined as the difference between customer expectations of service and perceived service, and if expectations are greater than performance then perceived quality is less than satisfactory leading to customer dissatisfaction" (Büyüközkan, Çifçi & Güleryüz 2011:9408). Knowledge about an organisation's service quality enables management to create sustainable competitive strategies and increased organisational efficiency (Al-Borie & Sheikh Damanhouri 2013:20; Mei, Dean & White 1999:136). Service quality is postulated to be positively related to customer loyalty (Chen & Hu 2013:1087).

Research has also confirmed that consumer-satisfaction with the service of their current insurer is an important determinant for staying insured with that insurer (Amo-Adjei, Anku, Amo & Effa 2016:317; Reitsma-van Rooijen, De Jong & Rijken 2011:95; Wendel, De Jong & Curfs 2011:310).

The study borrowed a number of aspects of the SERVQUAL model developed by Parasuraman, Zeithaml and Berry (1985:41-50) and further developed in 1988. According to Bhattacharjee (2010:67), Parasuraman et al. (1985:41-50) identified the five dimensions which consumers use to judge services as: tangibles, reliability, responsiveness, assurance and empathy. Although the SERVQUAL model is extensively criticised on the basis that it does not use the technical aspects of service encounters to measure quality (Cronin & Taylor, 1992:58), some of its aspects were adopted in this study because it continues to be the major instrument employed in service quality studies and is mostly preferred because it is flexible and easy to apply (Asubonteng, Mac-Cleary & Swan 1996:80; Lo, Wu & Tsai 2015:169; Naidoo 2015:40-60; Punnakitikashem, Buavaraporn ,Maluesri1 and Leelartapin; 2012:2). Furthermore, since service quality has been least reflected on by researchers in medical insurance, the model was construed to be useful in gaining insights into medical insurance industry.

2.4 Service quality in medical insurance

Mohammed, Sambo and Dong (2011:20) acknowledge that there is insufficient literature in developing African countries that deals with the satisfaction of clients under a health insurance scheme setting. Although investigations into service quality in public health insurance schemes and health care institutions have been done, not much is known in private health insurance settings (Boonen, Laske-Aldershof & Schut 2015:339-353; Padma, Rajendran & Sai 2009:2634-2682; Purcarea, Gheorghe & Petrescu 2013:573). In these studies it was noted that the perceptions of patients have become an increasingly important element in determining the quality of service in the light of health care services. Accordingly, the studies recommended a continuous investigation of consumer expectations and perceptions in a dynamic environment due to the continuous change in demographics, preferences and lifestyles. Therefore, in order to fully understand the nature of customers' perceptions and expectations in the Zimbabwean medical insurance sector, the following hypotheses were postulated:

H1: There is a statistically significant difference in the medical insurance customers' perceptions of the service quality dimensions between customers of different age groups.

H2: There is a statistically significant difference in the medical insurance customers' expectations of the service quality dimensions between customers of different age groups.

2.5 Approaches to managing service quality in the medical insurance

industry in Zimbabwe

Improving medical insurance in Zimbabwe has meant adopting models from developed countries like America (AHFoZ 2014: Internet). One of the measures adopted by medical insurance companies in Zimbabwe and designed to improve quality is the 'Managed Health Care System' (MHCS). In MHCS regulations are put in place "to ensure that plans offer baseline benefits on consumer choice among approved plans. In addition market rules that promote competition and limit incentives are also laid down" (Einav & Levin 2015:999). However, the American managed care system has been criticised for mainly focusing on managing the costs instead of improving the healthcare outcomes. To balance costs against quality medical care, an invention called the 'United States Patent' has recently been proposed (White & Chao 2014:1-2).

In Zimbabwe the adoption of the MHCS has seen companies expand into medical-related businesses (Campbell, Quigley, Collins, Yeracaris & Chaora 2001:1) to tap market opportunity and manage the costs of doctors, specialists and pharmacists and improve quality in the industry (Shamu et al. 2010:13). This study also investigates the ability of the MHCS to improve medical insurance companies' operations through examining the perceptions and expectations of clients regarding tangibility, reliability, responsiveness, assurance and empathy.

2.6 Medical insurance customers' perceptions of service quality

Customer perceptions of service quality refer to the way customers perceive services, and more precisely, the way they judge whether they have experienced quality service and are satisfied or not (Zeithaml, Bitner & Gremler 2009:102). Although little research has been conducted on customer perceptions in medical insurance, it can be claimed that customer satisfaction with the services offered by their current insurer is an important factor in determining whether or not subscription to that insurer continues (Amo-Adjei et al. 2016:317; Reitsma-Van Rooijen et al. 2011:95; Wendel et al. 2011:310).

2.7 Customer Expectations on Medical Insurance service quality

Customer expectations are defined as the "beliefs about service delivery that serve as standards or reference points against which performance is judged" (Zeithaml et al. 2009:75). In this digital era where information is now more readily available, customer expectations have become more complicated (Mohd Suki, Chiam Chwee Lian, & Mohd Suki 2011:43). Not much interrogation has been done in the area of customer-expectations regarding service quality in medical insurance. However, debate on service expectations is mainly centred on whether or not customers hold different or similar expectation levels for companies which belong to the same industry (Zeithaml et al. 2009:78). The third hypothesis was therefore postulated from this debate.

H3: There is a statistically significant difference in the medical insurance customers' expectations of the service quality dimensions between the five medical insurance companies.

H4: There is a statistically significant difference in the medical insurance customers' perceptions of the service quality dimensions between the five medical insurance companies.

2.8 Importance of measuring service quality gaps in medical insurance

Service quality gap is measured using the formula Q = P - E, where Q refers to the Service Quality Gap; P refers to customer perceptions and E refers to customer expectations (Naidoo 2015:43; Parasuraman, Zeithaml & Berry 1988:19). A positive Gap score means that customers are satisfied with the service offered, whereas a negative Gap score means that customers are dissatisfied. Thus, measuring service quality in medical insurance is an important way of determining the levels of customer satisfaction as these determine continued customer patronage. Strategies to improve service quality in an organisation should focus on closing any service quality gaps identified (Candido & Morris 2000:466). Naidoo and Mutinta (2014:219-229) argue that non-measurement of service quality leads to lack of knowledge of any service quality gaps that may exist. Thus measurement of service quality gaps is a basis of a good service quality strategy in the medical insurance sector. In order to explore the nature of service quality gaps in medical insurance the following hypotheses were postulated:

H5: There is a statistically significant difference in the service quality gaps experienced by customers in the five different medical insurance companies.

H6: There is a statistically significant difference in the service quality gaps for medical insurance customers in different age groups.

2.9 Medical insurance service and processes in Zimbabwe

Since the area of medical insurance has been least reflected on by researchers, little has been documented on the services and processes involved in this industry. However some of the processes involve registering clients for membership to the medical insurance company. In Zimbabwe, this process involves medical insurance companies dealing directly with employers and clients, thus avoiding agents' or broker costs (Shamu et al. 2010:2). After registration for membership, the following processes are also undertaken:

■ Collection of monthly subscriptions from registered clients - usually done through employers for those formally employed.

■ Processing of claims and making payments to service providers for medical services received by clients.

■ Processing payments for those service providers who want payments before performing services.

■ Processing refunds to clients who would have paid their cash on the receipt of medical services. This usually happens in cases of service providers who do not accept medical insurance at all.

■ Attending to any clients' queries.

 

3. RESEARCH METHODOLOGY

For this quantitative study, a cross- sectional survey research strategy was adopted. The data were collected using a questionnaire adapted from the SERVQUAL scale, a generic instrument (Parasuraman et al. 1988:12-40). The questionnaire comprised 22 questions covering the expectations and perceptions of health insurance customers in terms of the five service quality dimensions. The response format used was the interval-level response where respondents were asked to indicate their extent of agreement or disagreement to statements around the five dimensions of service quality on a five point Likert scale ranging from 'strongly disagree' (1) to 'strongly agree' (5). Closed ended questions were used for easy collection and analysis of data (Hair, Celsi, Ortinau & Bush 2008:155).

3.1 Ethical requirements

The researcher obtained a research clearance from the University of KwaZulu Natal's Research Ethics Committee to carry out the research. Permission was also sought to collect data from the data sources selected. Gatekeepers' letters from the five medical institutions where the study was to be conducted were obtained. Thus, a research ethics committee decision-making approach was used to determine the ethical standards of the study (Gale, Hyde & Modi 2017:F291).

Throughout the study, the common principles for social science research ethics were observed (Dingwall, Iphofen, Lewis, Oates & Emmerich 2017:111). In this study respondents were asked to sign an informed consent letter before the questionnaire was administered. The principles of confidentiality and anonymity were also adhered to. The respondents were also given the liberty to withdraw from the exercise at any point during the questionnaire administration.

3.2 Target population

The target population was comprised of one million (1 000 000) members of the five largest medical insurance companies in Zimbabwe namely PSMAS, CIMAS, First Mutual, Fidelity and Altfin (Ministry of Health and Child Care (MOHCC):2014:Interview).Of the 1 000 000 membership, PSMAS accounts for 50 per cent since its beneficiaries are mostly government employees; CIMAS accounts for 30 per cent of the total membership; First Mutual Life caters for 10 per cent of the beneficiaries and Altfin and Fidelity both have 5 per cent (Shamu et al. 2010:5; MOHCC 2014:Interview).

3.3 Sampling method

Non-probability sampling methods, namely quota sampling and convenient sampling methods were used to select a sample of 384 participants. Quota sampling was used to determine the number of respondents to select from each medical insurance company and convenient sampling was used to select the participants who were willing and ready to participate from the five major health institutions in Harare, namely the Parirenyatwa Group of Hospitals, Harare Central hospital, West End Medicare, Baines Imaging Group and Dr Mazvuru and Partners Dental Surgeons. Health institutions were chosen as points to collect the data from as such clients had fresh experiences with their respective health insurance companies and were likely to give accurate and useful insights about the service quality of their companies.

3.4 Sampling procedure

Table 1 below was used to determine the number of members to select from each of the five health insurance companies. Thus, the figures in the table were used to determine the number of questionnaires to distribute to the customers of each of the five medical insurance companies. Only medical insurance customers who had visited the five health institutions mentioned above and who were ready and willing to participate were given questionnaires to complete (Bhattacherjee 2012:69).

 

 

3.5 Response rate

Out of the 384 questionnaires distributed, 286 were completed and returned giving a response rate of 74%.

3.6 Validity and reliability

A pilot study was conducted as a way of determining the duration that on average would be appropriate for completing the questionnaire. The pilot was also intended to check on the clarity of instructions and identify any instances of vagueness and/or ambiguity with a view to fine-tuning any questions displaying these characteristics. Accordingly, the areas that were found wanting were subsequently corrected. The questionnaire was thus refined to minimise the incidence of problems when participants were answering the questions. The fine-tuning exercise also reduced the number of problems associated with the recording the data.

For reliability, the Cronbach's alpha was used, since it was appropriate for the type of data collected. The Cronbach's alpha value for the overall data was 0.897 and this shows that the data were reliable since the value was above 0.7.

 

4. FINDINGS

In this section, the findings obtained in the study are discussed in the context of the objectives of the study. The data obtained were analysed using the Statistical Package for Social Scientists (SPSS) version 20.

4.1 Medical insurance customer perceptions of quality variables

Table 2 shows the results obtained on the medical insurance customers perceptions of service quality variables.

 

 

As indicated by the mean scores, the highest perceptions were recorded in the tangible dimension (m=3.5192) showing that medical insurance customers perceived their companies as offering pleasant and excellent facilities; this was followed by the empathy dimension (m=3.2479) showing that customers perceived medical insurance companies as showing empathy; next was the assurance dimension (m=3.0545) showing that medical insurance customers perceived their companies as offering slight assurance; this was followed by responsiveness (m=2.8444) showing that medical insurance customers did not perceive their companies as being responsive; and lastly there was reliability dimension (m=2.6514) showing that medical insurance customers did not perceive their companies as having reliability. These results indicate that the service quality is generally regarded as poor by medical insurance customers.

These results confirm earlier findings where insurance providers were found to give great significance to the 'Tangibles of service' whilst giving less importance to 'core service' Gopalkrishna, Rodrigues and Varambally (2008:49-61).

4.2 Medical insurance customer expectations of quality variables

The results on medical insurance customers' expectations pertaining to service quality are shown in Table 3.

 

 

As shown in table 3 above, the highest mean scores were recorded in the reliability dimension (m=4.6762), indicating that medical insurance customers expected their companies to offer more reliability. This was followed by the responsiveness dimension (m=4.6678) indicating that they expected their companies to be more responsive. They also expected their companies to offer more assurance (m=4.6562); furthermore, they expected their companies to be more empathetic (m=4.6161) and to provide more appealing facilities (tangibles) (m=4.4554). The highest expectations recorded in the reliability dimension show that medical insurance customers place greater value in the provision of core benefits, which include the settling of medical bills in this case. In addition, the high expectations in all service quality dimensions indicate that medical insurance customer's desire and expect value from health insurers on obtaining membership.

4.3 Service Quality Gaps experienced

The results on the service quality gaps experienced by medical insurance customers are shown in table 4.

 

 

Table 4 above shows that all the Gap scores for medical insurance customers are negative. This shows that the medical insurance customers' expectations exceeded their perceptions and thus the medical insurance customers were dissatisfied with the services offered of medical insurance companies.

The highest Gap score was recorded in the reliability dimension (-2.0434), followed by responsiveness (-1.8434), assurance (-1.6017), empathy (-1.3245) and tangibles (-1.0420).The highest gap recorded in the reliability dimension implies that medical insurance companies are failing to perform the promised services dependably. Knowledge about service quality gaps in the Zimbabwean medical insurance industry forms the basis for setting clear standards that enhance service delivery in the industry (Chikwendu, Ejem & Ezenwa 2012:119; Naidoo and Mutinta 2014:219). This also assists medical insurance customers in building the competitive advantages necessary for retaining and attracting new members and for surviving in the industry.

4.4 Inferential statistics

In order to do this further analysis, all the scores for each of the statements in the five dimensions were added to get the overall scores. The overall scores were then tested for normality. Since the overall scores were not normally distributed, non-parametric tests namely the Kruskal Wallis and Mann Whitney tests were used for further analysis.

H1: There is a statistically significant difference in the medical insurance customers' perceptions of the service quality dimensions between customers of different age groups.

Table 5 shows results obtained concerning the above hypothesis (H1).

 

 

The results indicate that there is a statistically significant difference in the customers perceptions of the assurance dimension between the different age groups in the sample (p<0.05). Although all age groups in the sample perceived their medical insurance companies as showing only slight assurance, the strongest positive perceptions were recorded in the age group 21-30 years followed by the age group of 20 years and below. These age groups may possibly perceive their companies as showing assurance because they have fewer medical problems and use their insurances less frequently than other age groups. They could have been impressed by the knowledge, courteousness and the confidence of the employees in their few service encounters with their medical insurance companies. These views are supported by Padma et al. (2009:171) who notes that in the healthcare industry, the needs of patients vary with age and other demographic variables.

H2: There is a statistically significant difference in the medical insurance customers' expectations of the service quality dimensions between customers of different age groups.

The results for the above hypothesis (H2) are shown in table 6.

 

 

The results indicate that there is a statistically significant difference in the medical insurance customers' expectations of the responsiveness, assurance and empathy dimensions between participants in different age groups in the sample. On the responsiveness and assurance dimensions, although all age groups expect their companies to offer more of these in their service delivery, the strongest expectations were recorded from the >50years age group. This could possibly be due to the fact that this age group is aging (many suffer from chronic diseases) and they frequently require medical insurance services. For that reason, their expectations tend to increase. Furthermore, many years of service encounters between the aging population and its medical insurance companies can be taken to justify the increased acquired knowledge, beliefs and attitudes which could be the reason for the high expectations among customers in this age group.

On the empathy dimension, although all the age groups expect their medical insurance companies to be more empathetic, the strongest expectations were recorded in the <20years age group. This may possibly be because this age group is still growing and they need more attention and therefore demand more of this service quality dimension. Furthermore, this group comprises the young and educated members who are enlightened about customer rights and customer care and therefore tend to have high expectations about the empathy dimension. These views are supported by Zeithaml et al. (2009:82) who claim that the personal needs of a customer shape what the customer desires in a service.

H3: There is a statistically significant difference in the medical insurance customers' expectations of the service quality dimensions between the five medical insurance companies.

The results on the above hypothesis (H3) are shown in table 7 below.

 

 

There is no statistically significant difference in the customer expectations of the tangibles dimension between participants in the sample from different medical insurance companies (p>0.5). However, there is a statistically significant difference in the customer expectations of all the other service quality dimensions (namely reliability, responsiveness, assurance and empathy) between participants in the sample from different medical insurance companies (p<0.05). These results provide an answer to long-standing debates in service expectations which are mainly centred on whether or not customers hold different or similar expectation levels for companies which belong to the same industry (Zeithaml et al. 2009:78). The differences in expectations could emanate from the differences in service delivery between the companies and the different backgrounds and exposure that customers exhibit.

H4: There is a statistically significant difference in the medical insurance customers' perceptions of the service quality dimensions between the five medical insurance companies.

Table 8 below shows results on the above hypothesis (H4).

 

 

The results indicate that there was a statistically significant difference in the medical insurance customers' perceptions of all the service quality dimensions between the participants in the sample from different medical insurance companies (p<0.05). In the reliability, responsiveness, assurance and empathy dimensions, the strongest perceptions were recorded in First Mutual Health participants followed by CIMAS, and these companies are privately owned. However weakest perceptions were recorded amongst participants from PSMAS which is government owned. These results confirm the results from earlier studies in which the service quality of privately-owned companies was found to be better than that of publicly-owned companies (Chawla & Sharma 2017:47; Gopalkrishna et al. 2008:51).

H5: There is a statistically significant difference in the service quality gaps between customers in the five different medical insurance companies.

The results on whether there are significant differences in service quality gaps between customers in the five different medical insurance companies are shown in table 9 below.

 

 

The findings indicate that there were statistically significant differences in the Gap scores for all the dimensions, between customers in the different medical insurance companies (p<0.01). Therefore, hypothesis H4 was accepted. This shows that medical insurance companies in Zimbabwe have different service offerings. However, institutional arrangements limit the switch by between companies (Shamu et al. 2010:2) as shown by the large membership at PSMAS where weaker customer perceptions were obtained.

H6: There is a statistically significant difference in the service quality gaps for medical insurance customers in different age groups.

The results on the above hypothesis (H6) are shown in table 10 below.

 

 

The results indicate that there were statistically significant differences in the responsiveness and assurance Gap scores between customers of different age groups (p<0.05). Thus the hypothesis is accepted.

Customers in the 21-30 years age group had the highest gap scores. This shows that medical insurance customers in this age group have higher expectations to the effect that their medical insurance companies should be more responsive and give them more assurance than customers in other age groups. This could be due to the fact that this age group falls into the reproductive age group with many health care needs which demand more health insurance services. Besides being reproductive with little ones to look after, their schedules tend to be busy due to work-related and home-care demands. Therefore, their expectations in responsiveness tend to be higher than in other age groups. These variances in gap scores among different age group have greater implications in the formulation of medical insurance plans that suit customer needs.

However, the study did not find any significant difference in GAP scores for tangibles, reliability and empathy between customers in different age groups at the 95% level (p>0.05). This implies that broad strategies targeted along these dimensions are likely to satisfy diverse customer needs in these areas.

 

5. DISCUSSION

The study revealed that medical insurance customers perceived service quality as being very low, with the lowest perceptions being recorded in the reliability (m=2.6514) and responsiveness (m=2.8444). Although the customers' perceptions of service quality were above 3 (m>3) in the tangibles, empathy and assurance dimensions, these perceptions were very low and could not match customer expectations which were all above 4(m>4). These results concur with the studies of Ding and Keh (2017:1) and Gopalkrishna et al. (2008:49-61) whose findings showed that services' and insurance providers give more importance to the 'Tangibles of service' and give less importance to 'core services'. Furthermore, these findings support the view that poor knowledge of service quality in organisations causes managers to focus much more on things of less importance to the customer (Storey & Larbig 2017:2).

The findings of the study also show that customers were highly dissatisfied with the services on offer in the health insurance sector as further shown by negative gap scores in all service quality dimensions. The highest expectations and gaps recorded in the reliability dimension confirm the findings from earlier studies in which reliability was found to be the most critical determinant of service quality among insurers (Pashaie et al. 2013:17 Gera, Mittal, Batra & Prasad 2017:1).The findings also show that medical insurance customers desire to deal with health insurers that keep their promises about core service attributes and outcomes as found by Zeithaml et al. (2009:113).

Customer perceptions and expectations also varied across members in different medical insurance companies and different age groups. These findings are also similar to those of earlier studies where demographic variables were found significant in determining customer perceptions and expectations (Mitchell & Boustani 2015:663). Stronger perceptions recorded from CIMAS and First Mutual customers and weaker perceptions recorded from PSMAS members confirm earlier views that service quality in private insurance providers is slightly better than that of the public sector (Chawla & Sharma 2017:47; Gopalkrishna et al. 2008).

The research findings of this study provide the basis for setting clear standards for service delivery in the health insurance sector as shown in the managerial implications below.

 

6. MANAGERIAL IMPLICATIONS

There is a need for Zimbabwean health insurers to address service quality deficiencies in order to improve service delivery and increase their chances of survival in the industry. In this process, the top management needs to channel more resources towards settling the medical claims of customers in a more dependable manner (improving reliability). This is essential in retaining existing customers and attracting new ones in an industry threatened by competitive pressures and harsh economic conditions.

In their strategies to enhance service reliability, medical insurance companies' management should note that consistently delivering the basic services that customers expect, relies heavily on how well various elements in a service system function together. These elements include the personnel who perform various services and the equipment and systems that support these performances. This also means that medical insurance companies should work on their capabilities to retain, attract and employ high quality employees who will enable them to cope with dynamic business conditions.

Medical insurance companies should also come up with different medical insurance plans that suit customers in different age groups since they have different service quality expectations. This is because the results of this study indicated that there were statistically significant differences in the responsiveness and assurance Gap scores between customers of different age groups. Furthermore, their service delivery should be designed to cater for the particular needs of clients in different age groups. Medical insurance employees should show more responsiveness and assurance when dealing with the 50 and above age group so that they remain loyal to the company. Likewise employees should also show more empathy when dealing with customers in the <20 years age group.

Functional managers should ensure that employees are trained to deal with customers in a more positive manner so as to reduce the gaps in responsiveness, reliability, assurance and empathy. In this regard, stronger customer relationships can be harnessed through the use of emerging technologies like social media that facilitate real time communication and accurate understanding of customer expectations. The service quality gaps identified in the five service quality dimensions are useful in designing marketing strategies for the services offered by medical insurance companies as highlighted in the recommendations below.

 

7. RECOMMENDATIONS

The following recommendations are put forward to close the gaps along the service quality dimensions:

7.1 Reliability

The highest mean gap scores recorded in the reliability dimension (-2,0434) show that medical insurance companies are not dependable or reliable in providing financial coverage to the sick. Therefore, the following recommendations are suggested in order to close the service quality gaps recorded in this dimension:

■ Medical insurance companies should provide all medical benefits as promised in their medical insurance plans.

■ They should also settle medical claims at the time they promise to do so.

■ They should also be dependable in solving customers' queries.

7.2 Responsiveness

The negative gap scores recorded in the responsiveness dimension show that medical insurance employees do not show willingness to assist clients and to offer timely services. The following recommendations are therefore given to improve service quality along this dimension:

■ Employees of medical insurance companies should always be willing to help customers.

■ Medical insurance companies should also settle customers' medical claims promptly.

■ Medical insurance companies should keep customers informed about when payments for their medical claims will be made.

7.3 Assurance

The study revealed that participants perceived medical insurance companies to be offering assurance only to a slight extent and a negative gap score was also recorded in this dimension. In an effort to improve the services offered along this dimension, employees of medical insurance companies should be trained so that:

■ They are able to instil confidence in customers.

■ They are able to make customers feel safe in their transactions.

■ They are consistently courteous and have the knowledge to answer customers' questions.

Medical insurance companies should also concentrate on their core business of providing financial cover to the sick people. In this process, they should sub-contract some of their services to reputable service providers in their managed health care systems and avoid performing the services themselves since this has failed to improve service delivery in the industry.

7.4 Empathy

Although the participants here had positive perceptions regarding the empathy dimension (3.2479), the mean gap score was negative (-1.3245), which calls for improvements in the following areas:

■ Employees should be trained to give customers individual attention.

■ Employees should also be trained to have customers' best interests at heart.

■ Employees should also be trained to be able to understand the specific needs of their customers.

7.5 Tangibles

The study revealed that most participants perceived the companies as offering pleasant and excellent facilities. However, the negative gap scores indicate that some improvements are required and therefore the following recommendations are given:

■ Medical insurance companies should invest in modern equipment especially in their managed health care systems.

■ They should also upgrade their physical facilities like buildings so that they can continue to be visually appealing, but these should accurately reflect the quality of services that they offer.

 

8. LIMITATIONS AND FUTURE RESEARCH

The first limitation of the study is that non-probability sampling techniques (quota and convenient sampling) were employed. This makes generalisations to other medical insurance companies in Zimbabwe difficult to draw and apply. Furthermore, the use of closed-ended questions in the questionnaires made it difficult to follow up respondent responses to some service quality issues. Lastly, the study was conducted at five health institutions in Harare only, and was not extended to health institutions in other towns in Zimbabwe. This was due to budgetary and time constraints. However, despite the above limitations some contributions to the body of knowledge of service quality were made, and some insights about service quality were gained in the least-researched areas of medical insurance which can be useful in improving service quality in the industry. Further study can also be undertaken across all customers from the 31 medical insurance companies in Zimbabwe. This could give a comprehensive analysis of how medical insurance customers view service quality in the industry.

 

9. CONCLUSION

This study sought to examine customer perceptions of the service quality rendered by Zimbabwean medical insurance companies. The empirical findings of the study revealed some service quality deficiencies in the medical insurance sector shown by customer expectations which far exceeded customer perceptions in all the dimensions evaluated. The highest levels of dissatisfaction recorded in the reliability dimension, point that medical insurance companies should channel more resources towards providing dependable financial coverage to sick members. This is likely to help companies to build a competitive advantage and ensure customer loyalty and survival in the highly competitive industry threatened by economic challenges. The results obtained in this study and the recommendations given form the basis for formulating service quality strategies that ensure profitability and survival in the industry. Furthermore, the knowledge obtained also gives policy makers the basis for formulating policies to improve quality standards that will promote the sustainability of the industry. Thus, this study has both theoretical and practical implications for the medical insurance industry and the services industry in general.

 

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