Mediclinic will freeze ‘nonessential new hires’ and offer severance packages to administrative staff.
Many feared the adoption of Artificial Intelligence (AI) would result in jobs being redundant, as companies would opt to use the machines instead of humans. This fear has become a reality.
Remgro, the parent company of Mediclinic Group, told investors on Monday that it would freeze ‘nonessential new hires’ and offer severance packages to administrative staff under the hospital group.
These positions will be replaced by AI, and the group will save nearly R2 billion in annual savings to be delivered by 2027.
ALSO READ: AI ‘here to make us better humans, not replace us’ – experts
Why AI to replace humans?
Bertrand Levrat, Mediclinic Group chief operating officer (COO) told The Citizen the strategy is part of their ongoing commitment to delivering world-class healthcare services. “Mediclinic Group is evolving its operating model to ensure we remain fit for purpose in a rapidly changing healthcare landscape.
“This transformation includes the realignment of our corporate office structures, reinforcing our ability to support our facilities in providing exceptional patient care.”
The vacancies that will be affected do not include nurses and doctors. He said the job cuts will enable the group to reduce its administrative costs.
How will AI be implemented?
To ensure the successful execution of the strategy, the group has appointed an AI, data, and automation team, led by a chief data officer. So far, the group said a strong foundation has been established. They have also initiated data transformation and incremental technology deployment.
“This evolution will strengthen our organisation and ensure we remain competitive, sustainable, and best positioned to meet the needs of our patients, clients, and stakeholders.
“This transition is being implemented in a phased approach across the Group in all regions. Importantly, these changes are intended to have a progressive impact on our business operations and healthcare facilities, which will continue to operate as usual and maintain the highest standards of care,” added Levrat.
ALSO READ: Why companies shouldn’t rely on AI for job profiling
Is it working so far?
Its presentation to investors shows that it has deployed AI to predict client no-shows. The group’s trial phase of AI adoption has also resulted in 100 additional bookings in a day. “Through AI, there has been an improved operational efficiency by reducing standby time.”
Some areas in which Mediclinic is deploying data are bots, clinical coding, and revenue cycle management, a move that will make traditional human roles redundant.
Remgro completed the acquisition of Mediclinic in June 2023. According to Remgro’s website, a consortium led by Remgro acquired the remaining shares of Mediclinic that Remgro did not already own.
Mediclinic operates in South Africa, Namibia, Switzerland and the Middle East.
Who is Bertrand Levrat?
Bertrand Levrat was appointed group COO in June 2024, and it looks like he was brought in to spearhead this new era the hospital group will be entering.
Before joining Mediclinic, Levrat served 11 years as CEO of the Geneva University Hospital, the largest hospital in Switzerland, and President of the Swiss Association of University Medicine.
During his time at Geneva University Hospital, he led the implementation of AI applications in areas such as administrative task simplification and patient flow optimisation, which happen to be the areas where Mediclinic is targeting efficiency gains.
Is Mediclinic in financial trouble?
Levrat assured investors that the hospital group is not in financial trouble and is, in fact, in a sound financial position.
According to Mediclinic’s financial results for the six months ended 30 September 2024, the group recorded a revenue increase of 6% to R44.3 billion and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 14% to R6.11 billion.
