Significant growth along with higher purchasing power of Indian customers has led to stiff competition in Indian healthcare sector. Customer perception of service quality plays a significant role when choosing or preferring a particular hospital. The objective of this study is to find out customer preference for healthcare services delivered by both public and private hospitals in India. For this purpose ‘SERVQUAL’ instrument was used to measure patients’ perception about service quality delivered by both public and private hospitals located in the capital city of India. An analysis covering 192 patients revealed gap between patients' expectations and perceptions across public and private hospitals with reference to quality of services delivered on selected parameters. In this article logistic regression analysis was used to forecast the probability of a patient to visit public hospital over private hospital and vice versa. The regression model used had a classification accuracy of 94.9%. Preference for a particular hospital across various clusters was identified using cluster analysis. The findings of the present study aims to provide hospital managers an insight for efficient resource allocation and mobilization based on patients' evaluation of service quality delivered by these hospitals.