Patients in today's competitive healthcare market expect more than just satisfaction. As a result, patient satisfaction has become a high priority for hospitals and health plans across the country, and it is the hospital's most important determinant. Patient satisfaction is extended to which patients are expectation are met and satisfied with the services provided by the hospitals. Improved patient satisfaction will lead to good health outcomes and patient loyalty. The aim of the study is to analyse the patient satisfaction and its impact on patient loyalty towards hospital services. The study was conducted by using the survey method using structured questionnaire. The study was conducted among the 100 patients of the Madurai district using questionnaire The study uses simple random probability method to choose samples(patients). The study found that there is a relationship between patient satisfaction with respect to gender, age, residential area and service quality factors. The female and people from semi urban area are less satisfied towards the services of hospitals.  Empathy ranks low among the service quality factors. The study also confirms that patient satisfaction impacted on the patient loyalty. The hospitals employees have to improve caring and warming attitude towards patients. Moreover, the policy makers plan policy related to satisfy the expectation of the semi urban people and women.