Strategic Service Design Attributes, Customer Experience, and Co‐Created Service Choice: Evidence from Florida Hospitals

Abstract

Services are typically characterized by the direct participation of customers in the production process. The service‐dominant (S‐D) logic argues that value to consumers is always co‐created by service providers and consumers jointly and reciprocally. While prior research has addressed the indirect impact of structural, infrastructural, and technology service design attributes on a customer’s perceived value via the realized service delivery system, an important question remains unanswered: Do these strategic service design attributes directly affect co‐created service choice? In this study, we explicitly consider the extent to which service delivery design characteristics—structural, infrastructural, and technology attributes— directly affect this co‐created choice. Using detailed patient‐level data from Florida hospitals on elective hip and knee surgeries, we find evidence of structural, infrastructural, and technological influences on patient–surgeon co‐created choice of hospitals. We also find that the characteristics of the service encounter—in this case, the interpersonal care experience—interact in essential ways with these design attributes to influence co‐created service choice. Specifically, structural and technological attributes may serve as a substitute for interpersonal care experience in determining co‐created choice of a hospital. These results inform our understanding of how patients choose hospitals for elective surgeries under conditions of information asymmetry. An extended analysis of data for elective heart surgery patients generally supports our framework. Theoretical and practical implications of our results are discussed.