Mediclinic has become one of the first major local companies in South Africa's healthcare sector to ignite fears of machines replacing humans in traditional roles with its ambitious plan to revolutionise its operations using artificial intelligence (AI).
But MedicalBrief reports that the bold move, driven by the need to slash cuts and keep up with rapidly evolving medical technology, comes as a recent study warns of the potential harms to patients with the switch to AI, and highlights the crucial role of human oversight in AI-driven healthcare (see story in side bar).
The researchers in The Netherlands suggested that while AI-driven outcome prediction models are promising, their mathematical models demonstrate a potential downside – if trained on data reflecting historical disparities in treatment or demographics, AI could perpetuate inequalities.
Mediclinic, meanwhile, has frozen all non-essential new hires (excluding doctors and nurses) and offered severance packages to save nearly R2bn by 2027.
COO Bertrand Levrat told investors on Monday that while South Africa’s biggest private hospital group was in a sound financial position, the healthcare system was evolving, and the company had to stay ahead of the changes, reports BusinessLIVE.
The plan is to achieve about R2bn in annual savings by 2027, said Levrat, who joined Mediclinic a year ago after overseeing operations at Switzerland’s largest university hospital since 2013.
Speaking at an investor briefing of parent company Remgro, he said Mediclinic had put a freeze on all new recruitments in the group, and that the transition to AI-driven operations coincides with the “changing healthcare landscape, characterised by medical innovation, decreasing affordability and evolving population factors”.
His experience in implementing AI systems in hospital settings appears central to Mediclinic’s transformation strategy, reports Daily Maverick.
During his tenure at Geneva University Hospitals (GUH), Levrat oversaw AI applications in areas such as administrative task simplification and patient flow optimisation – precisely the areas where Mediclinic is now targeting efficiency gains.
Hard pivot
The company has established a dedicated AI, data and automation team under its chief data officer, focusing on immediate implementation of technologies that promise the greatest returns.
Documents show that robotic process automation (RPA) is already performing “significant hours of work annually” in back-office shared services, “leading to cost reduction through staff efficiency”. Additional automation initiatives include predictive systems to reduce client no-shows and automated coding and eligibility checks.
The great replacement
Mediclinic’s move reflects a broader shift in how AI is disrupting workforces across industries.
Sashen Naidu, global vice-president for customer experience services at NTT, told Daily Maverick about the dramatic impact of automation on staffing needs.
“You have fantastic use cases that can reduce people costs by 60% or 70%,” he said in a broader conversation about the transformative effect of AI. “A lot of the transactional capabilities are going to be handled by AI agents. We’re already seeing that right now. But there’s a shift in terms of the agents to handle far more complex queries.”
Naidu illustrated the cost efficiencies driving these changes: “A typical transaction is around four to six minutes… we’re talking about a significant decrease in costs when comparing AI solutions to human workers.”
Robin Fisher, head of Europe, Middle East and Asia growth markets for Salesforce, revealed at the company’s Agentforce conference that businesses were reconsidering their hiring strategies:
“It’s going to be really critical that the agents we use are adding value because that’s a nice problem to have, your need to hire personnel – in a call centre, you don’t want to constantly hire low-skilled people – that costs the company a fortune.”
This shift toward a “digital labour force enhancing your labour force” raises significant questions about the future of work in healthcare settings like Mediclinic, where administrative and support functions may be prime targets for automation.
Imported solutions strategy
Mediclinic’s AI strategy extends beyond cost-cutting to include clinical applications. The company is exploring AI for improving the quality of care, such as earlier detection of deteriorating patients using wearable monitoring systems.
It has also partnered with companies like Geneyx in the Middle East to deploy AI for analysing genetic data.
The company aims to balance its efficiency drive with enhanced patient experience through technology and the creation of new revenue streams from digital health solutions.
In the briefing on Remgro’s underlying assets, Mediclinic said it had bought two radiology companies and will scale up its in-house capabilities.
“We run radiology services in the United Arab Emirates (UAE) and Switzerland quite efficiently. So, it’s only natural we are starting to look at that in SA. The idea is to buy some of these practices and afterwards to start developing our own services,” said Group CEO Ronnie van der Merwe.
The Mediclinic group, which was founded by the Remgro group in the 1980s, operates 74 hospitals, five sub-acute hospitals, six mental health facilities, 20 day-case clinics and 28 outpatient clinics in SA, Namibia, Switzerland and the Middle East.
Mediclinic also holds a 29.9% interest in UK-based private healthcare group Spire Healthcare, which is listed on the London Stock Exchange.
See more from MedicalBrief archives:
Growing role for AI in everyday medical interactions
Mediclinic and Remgro reach agreement on buyout offer
Mediclinic Group’s grave warnings to Parliament over NHI Bill