Understanding patient perceptions of hospital encounters is crucial for the continuous efforts to improve quality of care in the United States. Abundant research has examined the influence of different service process dimensions on customer satisfaction, but scant research has explored how the organizational context affects customer perceptions of service providers. The authors propose a more comprehensive model of customer satisfaction that moves beyond the service process to incorporate organizational and market factors that affect customer experiences directly and indirectly through their influence on the service process. Three organizational and market factors lie at the center of the health care debate: physician ownership, hospital specialization, and market competition. The authors employ the Hospital Consumer Assessment of Healthcare Providers and Systems to determine patient ratings and the American Hospital Association Annual Survey to determine organizational and market factors. The results show that physician ownership, specialization, and market competition positively affect patient ratings. Dimensions of the service process act as a mediator between organizational and market factors and patient ratings. This study provides new insights into the importance of including both organizational and market factors and service process dimensions when examining customer ratings and offers implications for governance and strategy in service organizations.
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