An Empirical Study on the Association Between Financial Risk and Service Quality in Physiotherapy
Abstract
Patient choice is widely implemented in healthcare and the decision a patient makes have financial repercussions for firms. Eventually, if firms fail to fulfil patients’ expectations, they will be forced to exit the market due to unsuccessful business performance. Our study focuses on firms’ quality investments and their association with financial risk in physiotherapy organised for disabled individuals by the Social Insurance Institution of Finland (Kela). We use data on physiotherapy from two contract periods (2007–2010 and 2011–2014), and we use random and fixed effects regressions in our estimations. Our results show an association between financial risk and service quality. Firms with higher financial risk have lower quality. It seems that firms either are incapable of committing to quality investments or they have failed in marketing, and thus, they have increased their financial risk by losing customers due to patient choice.
Authors
Piia Pekola, Ismo Linnosmaa, Hennamari Mikkola
Additional Information
- Peer-Reviewed: yes.
- Open Access: yes.
- Cite as: Pekola, P., Linnosmaa, I., & Mikkola, H. (2017). An Empirical Study on the Association Between Financial Risk and Service Quality in Physiotherapy. NJB, 66(2),107–120. http://njb.fi/wp-content/uploads/2017/10/NJB_66_Pekola_et_al.pdf
