The impact analysis of digital transformation on upper-middle-class hospital performance through business model innovation

This study investigates the influence of digital transformation (DT) and resource integration (RI) on hospital performance (HP) in upper-middle-class hospitals in Indonesia, with business model innovation (BMI) examined as a mediating factor. A quantitative research design was employed, using a 5-point Likert scale questionnaire to collect data from 241 hospitals. The data were analyzed using SmartPLS to assess the relationships between DT, RI, BMI, and HP. The results show that DT does not exert a direct impact on HP, while RI has a positive and significant direct effect. Both DT and RI, however, significantly influence BMI, which in turn has a strong positive effect on HP. This underscores BMI’s role as a vital mediator in translating DT and RI into performance improvements. The findings confirm that business model innovation is a crucial mechanism through which digital transformation and resource integration improve hospital performance. Hospital managers should prioritize developing innovative business models and invest in staff training to maximize the benefits of DT and RI. These strategies can enhance patient outcomes, operational efficiency, and overall performance, providing valuable insights for healthcare administrators and policymakers. • Business Model Innovation mediates Digital Transformation and Hospital Performance. • Digital Transformation affects performance only through Business Model Innovation. • Resource Integration directly improves Business Model Innovation and performance. • Study uses data from 241 Indonesian Class A & B hospitals with SmartPLS-SEM. • Findings guide hospital leaders to boost performance via innovation and integration.