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The objective of this paper is to examine the impact of digitalization on the profitability of small- and medium-sized private healthcare companies. Previous studies suggest that digitalization has positive implications for a company’s performance, but contradictory results have been published according to the performance measurement used. This paper presents a survey of private healthcare companies in Finland and sheds light on the diverse and complex factors influencing profitability in these companies. This quantitative investigation uses the contingency theory to prove that the process of digitalization has an influence on a company’s performance. The results of two different multilinear regression analyses showed that digitalization negatively impacts the company’s performance when the EBIT-to-sales ratio is considered as the performance measurement especially in micro enterprise data. However, when performance is measured with ROA, the use of the internet in the innovation process has a positive impact but not significant. Similar findings were obtained for media as an innovation source while other tools for innovation had no significant effect. These effects were unexpected, since internet and media are assumed to positively boost the performance of a company. In conclusion, the present findings indicate that the connection between digitalization and profitability may not be positive in all business areas or companies of all size, and that the choice of the profitability indicator may have an impact on this relation.

The impact of internet and innovation on the profitability of private healthcare companies