“Seizing opportunities should be done in a sustainable and responsible manner to ensure that companies, as good corporate citizens, are in the long term able to maintain a positive impact not only on their clients, but also on the industry, on the planet, and on their employees, partners and surrounding communities.”
Dr Ronnie van der Merwe
Chief Executive Officer
The rapidly changing healthcare environment offers an abundance of opportunities for companies that are poised and ready to adapt to evolving regulatory requirements and unique client needs. Seizing such opportunities should, however, be done in a sustainable and responsible manner to ensure that companies, as a good corporate citizens, are in the long term able to maintain a positive impact not only on their clients, but also on the industry, on the planet, and on their employees, partners and surrounding communities.
Guided by its purpose of enhancing the quality of life, Mediclinic is refining its strategic goals to address current industry challenges and ensure sustainability through best use of its exceptional knowledge base and world-class infrastructure. During the year, the Group remained committed to creating value for all stakeholders by following a holistic approach that, in the context of our purpose, balances financial returns with our ethical responsibility toward its clients, its employees and the planet.
Mediclinic recognises its accountability to its stakeholders and is committed to effective and regular engagement with them, and to publicly report on its sustainability performance. Mediclinic’s key stakeholders are those groups who have a material impact on, or are materially impacted by, Mediclinic and its operations, including: patients, medical practitioners, employees and trade unions, suppliers, healthcare funders, government and authorities, industry associations, investors, the community and the media. The Group’s key stakeholders, methods of engagement, topics discussed or concerns raised are outlined in the 2019 Sustainable Development Report. The Board’s engagement with stakeholders is also reported on in the Corporate Governance Statement available on the Company’s website.
Effective communication with stakeholders is fundamental in maintaining Mediclinic’s corporate reputation as a trusted and respected provider of healthcare services and positioning itself as a leading international private healthcare group. Mediclinic’s commitment to its stakeholders to conduct its business in a responsible and sustainable way, and to respond to stakeholder needs, is entrenched in the Group’s values and supported by the Group’s Ethics Code. A wide variety of communication vehicles are used to engage with stakeholders, which serve as an impact assessment to assess stakeholders’ needs and to effectively respond thereto. Stakeholders’ legitimate expectations have been taken into account in setting the Group’s key sustainability priorities, as reported on in the 2019 Sustainable Development Report available on the Company’s website. The Group continually looks for ways to improve its use of online channels to communicate with its stakeholders through the corporate website and webcasting.
This report provides an overview of the Group’s sustainability initiatives, with specific reference to our material sustainability issues. For more information, please refer to the detailed 2019 Sustainable Development Report and the GRI Standards Disclosure Index available on the Company’s website.
AWARDS AND ACCOLADES SUMMARY for the reporting period
A constituent of FTSE4Good*, an index that recognises the performance of companies demonstrating strong environmental, social and governance (“ESG”) practices.
A constituent of FTSE/JSE Responsible Investment Index, an index that recognises such companies listed on the JSE Ltd that meet the required FTSE Russell ESG rating.
Achieved Global B List status from the Climate Disclosure Project (“CDP”) for water conservation and climate change actions.
Ranked second in the healthcare sector among more than 500 enterprises in Switzerland and Liechtenstein by Best Recruiters, an independent recruitment study.
17 out of its 18 hospitals are registered as CO2-reduced businesses by the Energy Agency of the Swiss Private Sector on behalf of the Swiss Federal Office of Energy, and were awarded with CO2 & kWh-reduced certificates.
Hirslanden Klinik Stephanshorn certified by the Network of Corporate Health Management with the quality label “Friendly Work Space”, based on the recommendations of Health Promotion Switzerland.
Mediclinic Southern Africa
Mediclinic Southern Africa brand ranked 14th in the Top 20 Brand South Africa rankings for 2018, being the top South African healthcare provider for five years in succession according to Brand Finance and Brand Africa.
Mediclinic Midstream received the Khanyisa Service Excellence Award in the category: Private Acute Care Hospitals from the Gauteng Department of Health.
Aliné Hall (Clinical Quality Specialist: Mother and Child) was recognised by The Forum for Professional Nurse Leaders in the category of individuals who have excelled in their individual endeavours and contributed to nursing leadership.
Dr Melanie Stander (Emergency Medicine Manager) received the Dr Cristina Costin International Emergency Medicine Award by the American Academy of Emergency Medicine, an award which honours a female emergency physician who has made a significant and sustained impact on the development of emergency medicine in her country.
Three hospitals included in Discovery Health’s Top 20 Private Hospitals in South Africa 2018, based on the results of patient surveys.
Mediclinic Middle East
Mediclinic City Hospital was named the winner of the Healthcare Innovation Award by Dubai Healthcare City Authority, acknowledging the hospitals work in Robotic Knee Surgery which saw two patients undergo partial and total knee replacements using a robotic system for the first time in the Middle East.
Mediclinic Middle East was awarded Superbrand status by the UAE Superbrands Council for 2019, in addition to awards received in 2015, 2016 and 2018.
Mediclinic has various economic, social and environmental responsibilities, including creating employment opportunities; training and developing employees; using of natural resources responsibly; investing in local communities; and promoting black economic empowerment in South Africa.
In terms of the Group Sustainable Development Policy, the Clinical Performance and Sustainability Committee annually reviews the Group’s material sustainability issues. This is done to ensure that management initiatives are directed at those sustainable development issues that are most significant to the business, and which directly affect the Group’s ability to create value for its key stakeholders.
The Clinical Performance and Sustainability Committee’s assessment identified the following three material issues, as illustrated in Figure 1, which constitute the focus of this report:
- developing an engaged and productive workforce;
- minimising environmental impact; and
- being an ethical and responsible corporate citizen.
FIGURE 1: MATERIALITY ASSESSMENT MATRIX
Mediclinic’s shareholders, patients and employees are key to its sustainability. Relationships with these stakeholders inform how the Group manages strategy, performance and risks. The link between the Group’s three material sustainability issues and the Group’s strategy is indicated in this report. The Group’s strategic priorities in the year under review, which are further detailed in the Our strategy, goals and progress section are:
- putting Patients First;
- improving Group and operational efficiencies;
- pursuing attractive growth opportunities; and
- leveraging the Group’s international scale; while
- continuing to invest in employees, information and communications technology and analytics.
MATERIAL ISSUE 1: DEVELOPING AN ENGAGED AND PRODUCTIVE WORKFORCE
Why this is important to the business
Employee engagement is a vital aspect that is essential to the overall success of the business. It is also fundamental to employee retention and for creating a dynamic working environment. The attraction of suitably qualified healthcare professionals is essential in delivering the Group’s Patients First strategy. The Group aims to provide a working environment with a supporting culture where employees can thrive and be emotionally committed to Mediclinic’s goals. These initiatives include engagement, corporate health and wellness, continuous development, mentoring and coaching. It requires a long-term focus and genuine transformation of practices to be successful. These initiatives will be continued and expanded to create a diverse and inclusive environment that enables the optimal performance of employees.
Workforce optimisation has been a key focus for the year, especially in the clinical environment. Continued focus on workforce planning and forecasting will ensure that the goal of operational efficiency is achieved as required in order to deliver on the Patients First strategy.
Link to strategy
- Invest in employees
- Improve safe, quality clinical care
- Improve patient experience
- Improve efficiency
- Employees and trade unions
- Medical practitioners
Risks to the business
- Inability to recruit healthcare practitioners to meet business demand
- Poor clinical outcomes and services
- Medical malpractice liability
- Reputational damage
- Delayed new nursing qualifications framework, causing a gap in the education pipeline in Southern Africa
- Ageing nursing workforce with decreasing entrants to profession
- Employee engagement and wellness
- Fraud and ethics failures
Mitigation of risks
- Extensive training and skills development programmes
- Governance of suitable selection processes with a focus on skills assessments, employment references and verification of credentials
- Targeted sourcing and recruitment initiatives, with a strong focus on agile sourcing techniques to ensure that the best fit candidate talent is channelled to appropriate vacancies, supported by a seamless hiring process
- A proactive international recruitment programme supplementing anticipated medium-term skills gaps
- Tailored retention strategies, supporting the retention of priority audiences within each business unit
- Succession planning and/or career management initiatives within scarce skills disciplines, to ensure the proactive development of high-performing employees with the potential to fulfil supervisory and leadership roles
- Monitoring of medical practitioner satisfaction through continuous dialogue
- Deployment of integrated talent strategies in support of core business areas
- Monitoring of employee engagement and satisfaction through a standardised process and structured, systematic action planning
key performance indicators
|*||Refer to Sustainable development overview for more information on the increase in the turnover rate.|
OUR PEOPLE –
MEDICLINIC MIDDLE EAST
The Mediclinic Middle East Employee Wellness Programme offers comprehensive health and wellness services tailored to individual and organisational needs, taking into account the specific challenges in the current economic and social environment.
The programme, which was launched in January 2018, is aimed at encouraging a culture of physical, mental, social and financial wellness, the benefits of which will also ultimately filter through to the quality of service provided to patients and their families. A comprehensive wellness strategy will improve credibility as a leading healthcare organisation when dealing with regulators and insurers and simultaneously set an example for the industry, which is currently nascent in terms of corporate wellness.
In June 2017, an initial workgroup consisting of representatives across various functions and business units was tasked with investigating and recommending a wellness solution for employees based on the vision of senior leadership.
Offering employees access to comprehensive employee wellness services is a natural progression of employment benefits, especially given the leading role Mediclinic plays in international healthcare. The benefits of such a programme is sure to ultimately filter through to the quality of service offered to patients and their families.
The workgroup evolved into a Wellness Committee which considered design principles relevant to the region, as well as international best practice, such as:
Wellness is not an isolated state, but rather the result of a habit of healthy living. Programmes should be aimed at continuous reinforcement to ensure sustainable change in behaviour for the long term.
Wellness initiatives should be tailored to the needs of employees. As such, the employees own the initiatives and clearly understand the benefits; they are also given the opportunity to provide input.
Great care must be taken to ensure that employees do not feel forced to participate. Mandatory programmes may increase the stress levels of employees, which will be contrary to the intended objective.
Leadership commitment and support
The senior leadership should clearly communicate their vision and strategy for the promotion of health; they should actively support the initiatives and continuously support and, where possible, participate in health education.
A health culture
Business decisions that affect everyday activities should be made in alignment with wellness goals to reinforce the division’s commitment to creating a health-conscious culture.
POLICY, Approach and performance
Mediclinic’s human capital is strongly supported by policies and best practice guidelines and is governed to ensure compliance to achieve global best practice and to minimise possible risks as mentioned above.
The human resources strategy focuses on harmonising and embedding enhanced human resources processes and practices throughout the Group. This is achieved by standardising processes where possible, sharing best practice and integrating systems. In this way, the human resources functions is positioned as an enabling partner that can deliver visible, credible and value-adding services to the business.
Employee recruitment and retention
All divisions are experiencing challenges regarding the global shortage of healthcare professionals specifically to specialist nurses and clinicians. Proactive strategies and action plans are continuously deployed to address the shortages within each of the divisions to ensure a consistent supply of applicants to fill critical vacancies. These strategies are regularly reviewed to ensure alignment with organisational requirements and industry challenges. This is supported by a highly tailored focus on employer branding to position each division as the preferred employer in the relevant geographies where the Group operates. The Group constantly and actively monitors industry and external talent pool trends. This allows it to proactively amend its strategy to mitigate the risks in the competitive healthcare labour market.
To address the challenges of attracting and retaining scarce skills, specific strategies are formulated to support the needs of the areas that are under pressure due to a limited talent supply in their local market. These strategies will be entrenched and further refined to align to the current priorities emerging from the existing workforce plan. This includes a continued focus on the training of healthcare professionals in relevant divisions, revised on-boarding programmes as well as pro-active talent pool management. Special emphasis is also placed on building sustainable and positive relationships with the candidates with critical talent. Other additional initiatives include continuous targeted internships, on the job training, student placements, career planning and development.
The alignment of recruitment and selection processes across divisions remains a key focus. This includes exploring the benefits of standardisation of generic elements and the sharing of best practices. Planning also commenced for the implementation of an international enterprise resource planning (“ERP”) system, supporting the recruitment and employer branding process during the course of 2019 and 2020. This supports the move to an integrated and digitalised human resources landscape, with an emphasis on data analytics to inform key human capital decisions. This will provide the Group with tools to identify of international and local trends and mitigate potential risks proactively. The Your Voice employee engagement survey results are scrutinised for generic themes and used to address themes that affect the retention of the workforce.
The Group’s workforce composition is provided in Figure 2. Controllable Employee Turnover rate is provided indicating a decrease in Switzerland and Mediclinic Middle East, but a slight increase in Mediclinic Southern Africa. Although not a significant increase, the reasons for employee turnover are monitored in a rigorous manner and themes are proactively addressed to minimise the loss of employees. With the ever-increasing shortage of skilled employees, we are experiencing increased competition in the market place. As a result, emphasis is placed on retention and effective utilisation of available skills. The Group has various measures in place with the aim to be regarded as an employer of choice: regular engagement; offering attractive working conditions (e.g. flexible employment contracts for part-time employees in Switzerland); career development; a consistent performance management system; and fair remuneration practices. Information on the divisions’ turnover rate by age group and gender; new appointments versus employment terminations; and return to work after maternity leave are provided in the Sustainable Development Report available on the Company’s website.
|1||Mediclinic International plc has one employee based in the United Kingdom.|
|2||The increase in Hirslanden employees from 2018 to 2019 was influenced by the acquisition of Clinique des Grangettes, effective October 2018.|
|3||The increase in Mediclinic Middle East employees from 2018 to 2019 was largely attributable to overall business growth.|
Training and skills development
The Group continues to invest considerably in training and skills development to maintain employee engagement and improve the quality of service delivery. The Group’s commitment to providing quality care for its patients can only be ensured if its employees have suitable, evolving skillset. This is achieved through many learning initiatives provided by the Group each year.
A consistent performance management system is applied throughout the Group, which enables it to identify and manage the training needs of individual employees, and to discuss career development. Performance tracking discussions take place on a continuous basis throughout the Group. The Group is committed to optimising the quality of these discussions where expectations regarding performance and development are shared and personal development plans are compiled accordingly. These discussions also provide the opportunity to translate the organisational strategic goals into individual employee objectives, activities and deliverables.
Succession planning, career management, diversity and inclusion
Succession planning and related leadership development remains vital to the organisation. The talent pipeline to Group and divisional key positions is reviewed on an annual basis and strengthened through a well-structured process under the guidance of the Nomination Committee and divisional Talent Review Committees. Successors are supported with tailored development plans and progress is monitored to ensure the readiness of the pipeline through proactive development.
An internationally standardised process is followed with local adaptation to support divisional challenges. There is a continued focus on the sharing of best practices to the benefit of all divisions. This process will be enabled during 2019 and 2020 when an international talent management system is implemented as part of the deployment of the international human resources ERP. This will equip the relevant committees and line managers with better tools to identify and develop talent toward key roles. The additional functionality will also give employees greater access to career opportunities and enable them to indicate their aspiration to these.
The diversity of the workforce and related internal talent pools remains a key consideration. A diversity and inclusion strategy was agreed upon that are currently being deployed to guide the Group toward the achievement of the stipulated goals. This includes testing the workforce perceptions and exploring these through various initiatives that can be considered to ensure a sustainable and optimal workforce reaping the benefits from a truly diverse and inclusive organisation. Progress in this regard is actively monitored on a regular basis by the Group and divisional executive teams and reported annually to the Nomination Committee, which monitors progress holistically.
Employee remuneration, recognition and benefits
The Group remunerates employees in a manner that supports the achievement of the Group’s vision and strategic objectives, while attracting and retaining scarce skills and rewarding high levels of performance. This is achieved through establishing remuneration practices that are fair, reasonable and market-related while at the same time maintaining an appropriate balance between employee and shareholder interests. To encourage a performance-driven organisation, the Group rewards employees for achieving strategic objectives as well as performance targets. Benefits to employees may include participation in a retirement fund and a medical aid scheme. The Group further covers the liability insurance for medical employee and other employees where liability insurance is required. Managers who are eligible to receive variable remuneration receive short-term incentives and senior management receive a combination of short and long-term incentives. The Group’s management remuneration structures consist of a fixed as well as a variable component.
Employee benefits and the value they add to the overall employment proposition are key factors in attracting and retaining proficient employees. Details of benefits offered to permanent employees per division are included in the 2019 Sustainable Development Report available on the Company’s website.
Employee health and safety
The Group recognises the role it has to play toward employee wellness. It believes in promoting employee health and reducing absenteeism. The Group is committed to supporting the overall well-being of employees and recognises the importance of employee wellness in the workplace and building a more caring culture for its employees by applying sound wellness practices.
Health and safety policies and procedures are in place across the Group to ensure a safe working environment for the Group’s employees, patients and visitors. The health and safety of the Group’s employees are critical and contribute to the sustainability of quality care to patients. The programmes and procedures differ within the various business units to mitigate health and safety risks.
The Group believes in building sound long-term relations with its employees and employee representatives, which supports its goal of being the employer of choice in the healthcare industry. This is measured by the Your Voice employee engagement survey and continuous assessment of the Group’s employment conditions.
The Group respects and complies with the labour legislation in the countries in which it operates and ensures that the internal policies and procedures are evaluated regularly to accommodate continual amendments to relevant legislation. The employee relations policies of the divisions, which deal with matters relating to misconduct, incapacity of employees and the disciplinary and grievance procedures, are communicated to new employees as part of their on-boarding process. These policies are also available to all employees to ensure that they are aware of the avenues to put forward grievances, should they have the need to.
Details of trade union membership throughout the Group is provided in the 2019 Sustainable Development Report available on the Company’s website.
Since 2015, Mediclinic, in partnership with Gallup®, have annually administered the Your Voice employee engagement survey across all divisions to measure the levels of employee engagement, identify gaps at a departmental level and support line managers in developing action plans to address engagement concerns.
In the last survey, the Group achieved an 82% (2017: 77%) participation rate and 45% (2017: 40%) of employees showed high levels of engagement. The 2019 Your Voice survey identified principal strengths and opportunities in terms of the employee engagement levels of Mediclinic. Mediclinic Southern Africa performs well on the basic engagement needs of employees while Hirslanden and Mediclinic Middle East perform well on the Management Support and Teamwork levels of the Gallup® engagement hierarchy respectively.
MATERIAL ISSUE 2: MINIMISING ENVIRONMENTAL IMPACT*
* This section does not include data pertaining to Clinique des Grangettes in Hirslanden.
key performance indicators
Unless indicated to the contrary, all environmental data reported is per calendar year. This is to ensure the accuracy of the data reported and to align the reporting to the annual submission of reports to the CDP.
|**||The intensity measures of CO2 emissions, water usage and energy consumption per bed day are not appropriate for the UAE, and not comparable with that of Southern Africa and Switzerland, as the total emissions, water usage and energy consumption include only seven hospitals, two day case clinics and 18 outpatient The extreme weather conditions in the UAE also negatively affects its energy and water consumption, which is being managed through various initiatives. Mediclinic Middle East has begun working toward a comprehensive energy and water use reduction plan for the year ahead to decrease overall consumption.|
Why this is important to the business
Without natural resources, Mediclinic would not be able to provide a service to its patients. The Group remains committed to reducing its impact on the environment and is constantly investigating opportunities to this end. Using resources responsibly can also be a source of strategic advantage for the Group, allowing it to manage and contain its operating costs and ensure ongoing access to water and energy supplies.
The Group’s main environmental impacts are the utilisation of resources, predominantly water and energy, electricity consumption, and the disposal of healthcare risk waste and healthcare general waste. During the year, water conservation and waste disposal were top priorities as per revised GRI Standards.
Regulatory changes, environmental constraints and climate change, including rising costs; reduced access to facilities; interruptions in service; and incidents of extreme weather events due to climate change, could greatly affect operations. Additionally, climate change can lead to water shortages (especially in Southern Africa and the UAE) and weather-induced pandemics and disease outbreaks which could cause high mortality rates.
During the period under review, there were no incidents of material non-compliance with any environmental legislation, regulations, accepted standards or codes applicable to the Group, with no significant fines imposed.
Link to strategy
- Improve efficiencies
- Employees and medical practitioners
- Governments and authorities
Risks to the business
- Business interruptions due to water shortages
- Business interruption due to electricity supply
- Increased operational costs due to cost of electricity, water and healthcare risk waste
- Reputational damage
- Impact of Carbon Tax and Climate Change legislation
At Group level, the Board mandated both the Audit and Risk Committee and the Clinical Performance and Sustainability Committee to monitor the risk management process and systems of internal control of the Group, and to identify any opportunities for minimising environmental impact that may occur due to climate change. The objective of Group risk management is to establish an integrated and effective risk management framework within which important risks are identified, quantified, prioritised and managed to achieve an optimal risk/reward profile. The ERM Policy defines the risk management objectives, risk appetite and tolerance, methodology, process and responsibilities of the various risk management role players in the Group and is subject to annual review. The Clinical Performance and Sustainability Committee has the role of evaluating whether any risks or climate-related difficulties provide opportunities for minimising environmental impact within the Group. At asset or operational level, the Group has an Environmental Policy to identify aspects of business that could have a significant impact on the environment. All business divisions within the Group are required to implement environmental management systems such as the ISO 14001 standard and have it certified by an internationally recognised body.
OUR PLANET –
Within the peaceful surroundings of Cham, the unmistakable architecture of AndreasKlinik is easy to locate. The hospital is well known for its obstetrics and gynaecology expertise. But it is below this modern facility that its latest accomplishment provides an unseen but significant contribution to daily operations.
The installation of a heat pump at AndreasKlinik in July 2017 has resulted in significantly reduced costs and energy consumption within only a year, with further room for optimisation. As part of the installation, 16 geothermal probes (also known as borehole heat exchangers) were installed at a depth of 250m, using approximately 17km of pipeline.
The heat pump has both hot and cold functionality, to a large extent replacing the existing gas heating and ensuring significantly lower CO2 emissions. The saving in natural gas consumption is due to the fact that the heat pump is able to single-handedly meet the bulk of the energy requirements; cooling energy is simultaneously generated and used to cool the MRI machines, even in winter.
The new system replaced an existing chiller from 1995 and a corresponding re-cooler located on the roof. A gas heating system is still available to supplement the heat pump at peak times.
How does a heat pump work?
In principle, a heat pump works in the same way as a refrigerator, but inversely. While a refrigerator extracts heat from its interior and emits it to the outside, a heat pump extracts heat from the outside and emits it to the facility as heating energy.
In the case of Hirslanden AndreasKlinik, soil is used as an environmental heat source. Heat from the geothermal probes feed an evaporator and is then transferred to the heat pump. As the refrigerant in the heat pump has a low boiling point, the soil temperature is sufficient to quickly cause it to reach a vaporous state. In the compressor, the steam is compressed and thus heated. In the condenser, the hot steam finally transfers its heat to the water circuit of the heating system.
The installed system offers both heating and cooling functionality. When cold is produced, heat is generated and vice versa.
In the cooling operation, the waste heat is transferred to the heating system whenever possible. In heat pump operation, the heat source from the geothermal probes is used. If no heat is required in cooling operation, the waste heat can be returned to the soil. This allows the geothermal probe field to regenerate or heat up again and ensures that the soil does not cool down completely and can be used sustainably to generate heat when needed.
POLICY, Approach and performance
Effective environmental management system
The Group Environmental Policy, available on the Company’s website, aims to minimise Mediclinic’s environmental impacts and guides the identification and management of all risks and opportunities relating to water use and recycling, energy use and conservation, emissions and climate change, and waste management and recycling. Mediclinic is committed to ensuring that its environmental management systems and practices are aligned with international best practices to safeguard its reputation and provide assurance regarding the environmental quality, safety and reliability of its processes and services.
Hirslanden has committed itself to comply with the Swiss legalisation concerning the environment, defines programmes to continuously improve environmental management and actively promotes its employees’ environmental awareness. Furthermore, Hirslanden formulates targets to prevent environmental pollution and minimise the company’s effect on the environment. Suppliers and service providers are encouraged to implement environmental programmes to further restrict negative impact on the environment.
Mediclinic Southern Africa is committed to ensuring that its environmental management systems and practices are aligned with international best practices to safeguard its reputation and provide assurance about the environmental quality, safety and reliability of Mediclinic’s processes and services. The ISO 14001:2015 Environmental Management System encourages good management practices that limit the impact of industry on the environment and ensure legal compliance. The purpose of the system is to conserve resources, use them effectively and minimise waste. Categories managed in the environmental aspect register are the utilisation of resources and waste management, which include electricity, water, gases, paper, healthcare risk waste, hazardous waste and normal waste. Currently, 44 of Mediclinic’s 52 hospitals are ISO 14001 certified by an external assurance provider (British Standards Institute), as accredited by the UK Accreditation Services. All the Group’s hospitals are ISO 14001 trained, follow the same environmental management practices and are subject to annual internal audits. Adhering to the system procedures and processes is expected to reduce the likelihood and magnitude of the risk. Mediclinic Southern Africa has transitioned from ISO 14001:2004 to the 2015 revision of the standard.
Mediclinic Middle East is acutely aware of its commitment to environmental sustainability and responsibilities. It undertakes significant efforts to minimise the effects of its operations on the environment and new projects have been designed to incorporate the latest environmental technology. Mediclinic Middle East is committed to complying with UAE legislation and regulations concerning the environment and issues related to climate change. It promotes employee awareness on environmental sustainability, waste reduction and energy saving. Furthermore, the division has formulated key performance indicators (“KPIs”) for environmental sustainability and has included the development of environmental initiatives as part of its strategic objectives.
Reduction of carbon emissions
The CDP is a global initiative measuring companies around the world, their reporting on greenhouse gas emissions and climate change strategies. It is regarded as a global leader in capturing and analysing data that record the business response to climate change, including management of risks and opportunities, absolute emissions levels, performance over time and governance. Participation and disclosure of the results are voluntary. The project was launched in South Africa in 2007 in partnership with the National Business Initiative, in which JSE-listed companies are measured. Mediclinic has participated in the project since 2008, initially only in respect of Mediclinic Southern Africa. Limited information on Mediclinic Middle East has also been included since 2010, although it still remains an initiative focusing mainly on Mediclinic Southern Africa’s data. Mediclinic’s CDP reports can be obtained on the CDP website at www.cdp.net, with the most recent reports also available on the Company’s website.
Financial optimisation calculations are implemented: Rising electricity costs have been an incentive to reduce electricity consumption and resultant carbon emissions through investments in energy efficient equipment and alternative renewable energy sources.
With the assistance of external consultants, the divisions measure their carbon footprint using the Greenhouse Gas Protocol. These measures include in varying degrees:
- Direct emissions (scope 1 emissions), Mediclinic Southern Africa-owned or -controlled equipment (stationary fuels); air-conditioning, refrigeration gas refills; anaesthetic and other gas consumption; ER24 emergency response vehicles; and fleet and pool vehicles (mobile fuels).
- Indirect emissions from the consumption of purchased electricity (scope 2 emissions).
- Indirect emissions in the supply chain (scope 3 emissions), Mediclinic’s business travel activities, its employee commuting, upstream and downstream third-party distribution, the consumption of office paper, electricity transmission and distribution losses and waste are also included; and
- Non-Kyoto Protocol greenhouse gas emissions such as Freon, which is used in air-conditioning and refrigerant equipment. With the assistance of external consultants, these emissions data were converted into a carbon dioxide equivalent (“CO2e”) using recognised calculation methods, emission factors and stating assumptions made, where relevant.
The Group’s main environmental impacts are the utilisation of resources and waste which have a direct effect on carbon emissions. Items listed in the aspect register relating to regulatory compliance, water, electricity, healthcare risk waste, hazardous waste, organic food waste, waste to landfill paper usage, and gases not only could have a significant impact on the environment, but also informs strategy on climate change related risks and opportunities.
The carbon emissions per division, reported per calendar year, are reported in the Sustainable Development Report as summarised in Figures 3–5.
Figure 3: Total CARBON EMISSIONS (HIRSLANDEN) (per calendar year)
FIGURE 4: TOTAL CARBON EMISSIONS (MEDICLINIC SOUTHERN AFRICA)
Figure 5: Total CARBON EMISSIONS (MEDICLINIC MIDDLE EAST)
|*||Since CDP 2017, the Mediclinic Middle East figures include the Al Noor business, whereas in previous years it only included the Dubai business. These figures are therefore not directly comparable with those of previous years.|
|**||Mediclinic Middle East figures are now based on calendar year 2018 rather than financial year. Data for 2018 includes acquisitions and the new Mediclinic Parkview Hospital, as well as additional data which was previously not collected such as air conditioning, additional business travel and third party vehicle consumption. The figures are therefore not directly comparable with those of previous years.|
Electricity is the main contributor to the Group’s carbon footprint. All of its divisions are taking steps to reduce their electricity consumption intensity through the adoption of ISO 14001:2015 environmental management standards. This will lead to improved operational efficiency of technical installations, the introduction of various new energy-efficient and renewable technologies and changes in employee behaviour regarding energy use.
The direct and indirect energy consumption per division, for the periods as specified therein, is reported in the 2019 Sustainable Development Report.
Responsible water use
Access to fresh water is essential for all life on earth and a human right recognised by the United Nations, yet this precious resource is increasingly under pressure. The total volume of water withdrawn from water utilities throughout the Group, for the periods as specified therein, is reported in the 2019 Sustainable Development Report.
In Switzerland, there are no significant water shortages. Hirslanden’s water usage is supplied by the public water utilities and all waste water is treated directly by the local municipalities and monitored locally by the group’s hospitals. Various measures are in place to monitor and reduce water consumption throughout the division, such as the installation of water-flow limiters at water taps, the replacement of kitchen dishwashers and the insertion of water-saving valves in the toilets.
During the reporting period, the Western Cape region had its worst drought on recorded history. This resulted in increased levels of water restrictions, water tariffs and the threat of severe disruptions to water supply that culminated in the proposition of “Day Zero”, when municipal water supplies would be cut off and a quota system implemented with reference to strategic businesses and residences. This constitutes a substantive impact due to the financial cost to mitigate against the risk. The primary response was to establish a Water Resilience Committee to govern the water usage affairs of the 11 hospitals located in the Western Cape region. Through this committee, Mediclinic engaged with policy makers and initiated various water augmentation initiatives and strategies at the hospitals, as elucidated on below.
The division’s hospitals have installed dedicated water meters with pulse monitoring capabilities, which meters are linked to the SCADA monitoring systems. These systems allow for the continuous monitoring of the water consumption of the hospitals.
The three verification methods implemented to ensure the accuracy and reliability of the electricity consumption, equally apply to water data.
Through the ISO 14001:2015 Environmental Management System, water consumption of the hospitals is measured and verified. The total water consumption decreased by 77 355kl from 1 185 271kl in 2017 to 1 107 916kl in 2018 (6.53%). The drive in changing human behaviour via the ISO 14001:2015 Environmental Management System and the recent drought in the Western Cape was the biggest contributor to the reduction in water consumption.
The water consumption intensity is calculated in litres per bed day sold. The water consumption intensity decreased from 0.594kl/per bed day sold in 2017 to 0.555kl/per bed day sold in 2018; this is a reduction of 0.039kl/per bed day sold (6.57%).
Bulk water storage facilities have been installed at hospitals and boreholes were sunk for strategic sustainability. Planned maintenance procedures have been implemented for the measurement and control of water quality. We have instituted initiatives to reduce water consumption, which include employee awareness training and monitoring of uncontrolled leakages. Furthermore, we have installed efficient technologies such as water-saving instrument washers, water-saving washing machines for laundry, and water-saving autoclaves. Certain hospitals also facilitate the recycling of autoclave water.
Mediclinic Middle East utilises various measures to minimise water consumption, such as reclaiming water from steam sterilisers and all air-handling units for redistribution to gardens and other non-clinical areas; monitoring of hot water consumption to reduce energy on hot water tanks, installing of control sensors on taps in hospital wards and reducing the pressure of water points. Water consumption is monitored at each unit and action taken to further reduce consumption where required. Total water consumption per bed day has increased by 7.68% in the past year.
Safe waste and hazardous waste management
Stringent protocols are followed to ensure that refuse removal within the Group complies with all legislation, regulations and by-legislation. The Group regards the handling of waste in an environmentally sound, legal and safe manner as its ethical, moral and professional duty. During the reporting period, there were no incidents at the Group’s facilities or offices leading to significant spills.
MATERIAL ISSUE 3: BEING AN ETHICAL AND RESPONSIBLE CORPORATE CITIZEN
key performance indicators
|*||Fifteen high-priority cases were reported to the Group’s ethics lines during the year, five have been investigated and closed, while 10 are still under investigation.|
|**||This figure does not include reference to Clinique des Grangettes.|
Why this is important to the business
Governance and corporate social responsibility (“CSR”) are integral to Mediclinic’s approach to running a sustainable, long-term business. In line with the Group’s vision of being preferred locally and respected internationally, it:
- enforces good corporate governance standards throughout the organisation;
- acts as a responsible corporate citizen;
- builds constructive relationships with its local stakeholders; and
- acts as a valued member of the community in the regions where it operates.
The Group has entrenched a range of policies, processes and standards to support the Group’s governance and corporate social investment (“CSI”) programmes and provide a framework of the standards of business conduct and ethics that are required of all divisions, Directors and employees within the Group. These include the Ethics Code, the ERM Policy, the Fraud Risk Management Policy, the Regulatory Compliance Policy and the Anti-bribery Policy.
Adherence to these policies is monitored through the various risk management and assurance initiatives implemented throughout the Group. Non-adherence to these policies is immediately highlighted as a corrective action and addressed accordingly. The Group risk management department regularly monitors the status of these corrective actions.
These policies are intended to create a culture within the Group where ethical values are displayed on a day-to-day basis. It encourages employees to act transparently and be vigilant for any suspicious or unethical behaviour. These policies provide clear guidelines and frameworks to assist in achieving set objectives, for example, compliance with applicable legislation and regulations. The policies are communicated to all relevant employees and where necessary training is provided. The enhanced training and awareness of Group policies are planned for the year ahead.
Link to strategy
Although not directly linked to any particular Group strategic priority, governance and CSR are regarded as key enablers and the basis from which the Group conducts its business.
- Healthcare funders
- Governments and authorities
Risks to the business
- Fines, prosecution or reputational damage
- Inability to continue business due to legal and regulatory non-compliance or changes in the regulatory environment
- Financial and reputational damage caused by poor governance, unethical practices and inadequate risk management
- Reputational damage at local community level due to inadequate community involvement
Mitigation of risks
- Visible ethical leadership
- Regular fraud and ethics feedback to management, the Board and relevant Board committees
- Ethics lines available to all employees and external parties, with reported incidents monitored and investigated
- Established Group Risk Management and Compliance department and Internal Audit function
- Compliance risks assessed as part of risk management process, with regular internal self-assessments, with necessary advice and support by the various company secretarial and legal departments within the Group
- Group Compliance and Data Protection Manager appointed to implement compliance framework and monitor compliance maturity
- Monitoring of CSI initiatives by senior management, with feedback to the Clinical Performance and Sustainability Committee
OUR PURPOSE –
Through a number of planned collaborations between Mediclinic Southern Africa and provincial health structures, the division has been able to play an important role in developing workable solutions to some of the challenges facing the South African healthcare sector.
To ensure a viable future for healthcare in South Africa, it is imperative for all healthcare players to engage with one another – private and public alike. Through its involvement in public private initiatives, Mediclinic Southern Africa now has the opportunity to add value beyond its traditional patient base and values the opportunity to draw alongside provincial health structures to seek practical means to support and strengthen the work already being done in the public sector. The aim of these partnerships is to help broaden access to quality healthcare while alleviating the heavy burden of long public surgery waiting lists.
To date, Mediclinic has partnered with the provincial health structures in several provinces, including the Western Cape, Limpopo, Free State, KwaZulu-Natal and Gauteng. Initially surgeries included cataracts, ear, nose and throat and urology procedures, but in the prior year the success of the association has allowed for expansion to include cleft palate, knee surgery, as well as unique procedures such as deep brain stimulation.
Over the past 24 months, Mediclinic has facilitated free surgical procedures for more than 200 public-sector patients. The Mediclinic surgical facilities, nursing employees and expertise from Mediclinic-associated medical practitioners are provided free of charge in collaboration with the local public-sector hospitals.
Dr Nomafrench Mbombo, Head: Department of Health Western Cape, explains the importance of these types of surgeries: “With an increasing acute load due to trauma, providing elective surgeries has in recent years become increasingly sought after. Trauma cases demand prioritisation, thus pushing back elective surgery. Also within the context of diminishing resources, this is a welcome chance to catch up some of the elective surgeries and improve the quality of life of our patients.”
“We’ve been trying to get help for eight years. Medical aids did not want to help us because they said the surgery is cosmetic. For my daughter the cleft palate surgery is life-changing. It’s not cosmetic for us,” said her father. “The pro bono surgeries we are performing are about more than just repairing external features – they are about changing lives,” says Dr Sharan Naidoo, a maxillofacial and oral surgeon at the same hospital. “I am passionate about giving opportunities to these families where they have had to wait for surgery for their children. There is huge pressure on state facilities and our partnership will allow a measure of relief for their waiting lists.”
“In Limpopo province we find it difficult to attract specialist doctors,” says Dr Ntodeni Ndwamato, acting Deputy Director-General for Tertiary Health Services and Academic Development at the Limpopo Department of Health. “This means patients can wait years to receive treatment. We appreciate the effort Mediclinic has made to reach out into the community. They supply the expertise and consumable materials required to really give these patients a better quality of life.”
POLICY, Approach and performance
Ethics, anti-bribery and anti-corruption
The Group’s commitment to ethical standards is set out in the Group’s values, and is supported by the Group’s Ethics Code as well as its Anti-bribery Policy, available on the Company’s website. The Ethics Code provides a framework for the standards of business conduct and ethics that are required of all business divisions, Directors and employees. The Ethics Code is available to all employee and is included in new employee inductions.
The Group adopts zero-tolerance to unethical business conduct, including bribery, fraud and corruption.
Any employee or external stakeholder is able to report any wrongdoing throughout the Group in confidence to the ethics lines. All reports are dealt with in a non-discriminatory manner and any person making use of the independent ethics lines has the option to remain anonymous. No form of retaliation against an employee or other person making a report in good faith shall not be tolerated. A dedicated ethics contact person per division is available to deal with matters pertaining to the Ethics Code. The number of calls received through the Group’s ethics lines is indicated in Material issue 3. All complaints are investigated in accordance with the Ethics Code. Over the years, the majority of calls were of a grievance nature. Only in exceptional cases has information been received that has led to the discovery of unethical, corrupt or fraudulent behaviour.
The Group’s Anti-bribery Policy governs the granting and acceptance of gifts, hospitality and entertainment, which will only be approved if it is acceptable business practice, there is a proper business case and no potential to adversely affect Mediclinic’s reputation. This policy prohibits the direct sponsorship of supplier and/or third party events, ensuring that all such sponsorships are administered and overseen by the relevant division.
The Group’s Fraud Risk Management Policy facilitates the development of controls for the prevention of fraud and corruption. Feedback on ethics and fraud is provided to the Audit and Risk Committee at every meeting, with regular feedback to the Clinical Performance and Sustainability Committee.
Further details regarding the Group’s management of these matters are included in the report in Risk management, principal risks and uncertainties and the Audit and Risk Committee Report.
A summary of the Group’s approach to clinical ethical issues, are set out in the Clinical services overview.
During the period under review, there were no incidents of material non-compliance with the Ethics Code, Anti-bribery Policy or any legislation, regulations, accepted standards or codes applicable to the Group concerning antitrust matters or matters relating to corruption and bribery, with no significant fines being paid in this regard.
Cost of healthcare
The Group contributes in various ways to a sustainable healthcare system by, inter alia, focusing on efficiency and cost-effectiveness, conducting tariff negotiations in a fair and transparent manner, expanding facilities based on need, and actively participating in healthcare reform.
The Group is focused on streamlining and centralising its procurement processes to improve efficiency and cost-effectiveness. During the reporting period, good progress was made on a range of international procurement initiatives including:
- refining the classification and matching of products used across all its divisions to compare prices and drive procurement strategies;
- procurement spend management and development of KPIs to measure procurement value;
- concluding global contracts with key multi-national suppliers to reduce prices and efficiencies related to surgical products and implants;
- Hirslanden entering into a collaboration agreement with Sana Kliniken AG to increase buying power;
- better prices through pooling of capital equipment purchases across the three divisions;
- direct importing and distribution of more cost-effective surgical and consumable products; and
- adopting a total cost of ownership approach when concluding transactions to include operational costs.
Supply chain management
In order to deliver its services, Mediclinic is dependent on a large and diverse range of suppliers who form an integral part of the Group’s ability to provide quality hospital care. Mediclinic believes in building long-term relationships with suitable suppliers and establishing a relationship of mutual trust and respect. Regular meetings are held with suppliers to ensure continuity of service. The Group relies on its suppliers to deliver products and services of the highest quality in line with Mediclinic’s standards. Various other criteria play an important role in selecting suppliers, such as: compliance with applicable international and local quality standards, price, compliance with appropriate specifications suited to the Group’s markets, stability of the organisation and the relevant equipment brand, good-quality and cost-effective solutions, support network, technical advice and training philosophy.
The availability of products and services is imperative to enable the Group to deliver quality care to its patients, and therefore an important criterion in its supplier selection process although not always the case, this often leads to local suppliers being preferred, which adds to better and faster service delivery and knowledge of local legislation and regulations, particularly with regard to pharmaceutical products.
Maintain high-quality healthcare infrastructure
To ensure a safe and user-friendly environment for both its patients and employees, the Group strives to provide high-quality healthcare facilities and technology, focusing on capital investments, maintenance of facilities and optimal use of facilities. As a result, the Group continuously invests in capital projects and new equipment to expand and refurbish its facilities and the replacement of existing equipment, as well as on the repair and maintenance of existing property and equipment. Refer to the key performance indicators and to the Chief Executive Officer’s Review, the Divisional Reviews and Our strategy, goals and progress included in the remainder of the 2019 Annual Report.
Hospitals are high-risk environments in which complex treatment processes are executed using sophisticated equipment and techniques. The process of external accreditation ensures that international standards are adhered to in all aspects of hospital operations. For more details on accreditation, please refer to the 2019 Clinical Services Report, available on the Company’s website.
Information and cybersecurity
Information and cybersecurity are paramount in enabling Mediclinic to conduct its business in a safe and secure manner. The need is even greater because Mediclinic is in the healthcare industry, where ensuring data privacy is an imperative.
Mediclinic and its divisions operate by way of an inter-connected international network, with localised data networks in each of the jurisdictions. The extensive ICT landscape and associated information assets, the continuously increasing threat to data security, and the vast landscape of data protection legislation and regulations, creates a dynamic and complex environment.
To this end, the Group has established an information security and cybersecurity programme. Some of the key objectives of the programme are:
- to implement effective measures and controls;
- increase end-user education and threat awareness levels; and
- provide ongoing assurance toward reduced risk levels and increased compliance.
The programme is executed at a divisional level. Each division has well-established ICT structures and is governed from a central point through the Group Information Security Committee, represented by dedicated divisional Information Security Officers. This Group Information Security Committee annually reviews the security programme to stay vigilant against cyber attacks thereby reducing the inherent risks associated with information security and cybersecurity.
Several international standards are subscribed to in order to shape, maintain and continuously enhance the Group’s security programme, including those contained in Control Objectives for Information Technology (“CoBIT”), ISO27001/27002/27799 security standards, Centre for Internet Security and National Institute of Standards and Technology control frameworks. Information security and cybersecurity policies are reviewed annually to ensure alignment with legislative requirements in the different jurisdictions where the Company operates. In addition, various mechanisms are used to ensure that information security and cybersecurity remains relevant, such as management self-assessments, independent security reviews, internal and external audits and management oversight processes.
Overall ICT risk profiles, reviews, outcomes, actions and remediation plans are maintained and tracked through a central risk management system. Risk management of ICT and information security forms part of the Group’s ERM process and regular assessments ensure that risks associated with information security and cybersecurity are appropriately highlighted, positioned and prioritised within the Group.
The Group’s information and cybersecurity programme is supported by both the Board and the Group Executive Committee and is overseen by the Group’s ICT Management Committee, which comprises the Group CIO and divisional CIOs.
Privacy and Data Protection
Mediclinic is committed to conducting its business in accordance with all applicable data protection legislation as may apply from time to time in the various divisions as well as other jurisdictions that apply to Group companies. Maintaining and respecting the privacy of employees, Directors, patients, affiliated medical practitioners, suppliers and stakeholders remains priorities. Mediclinic has reaffirmed its commitment to protecting the personal data of its stakeholders by embarking on a group-wide data privacy project to align and ensure compliance with relevant data protection legislation, as may be applicable in the various countries of operation, including the EU’s GDPR. The Group Privacy and Data Protection Policy has been aligned to the GDPR standards and various initiatives have commenced to ensure that core components maintain their compliance status as it was at 25 May 2018, which is the date the GDPR came into effect. During the project rollout to the rest of the Group, compliance to applicable data protection legislation is ensured through customisation of the standardised project plan.
Information security policies and controls are in place throughout the Group regulating, inter alia, the processing, use and protection of own, personal and third-party information. Personal data flow across country borders are dealt with through formal arrangements in line with country-specific legislation. There were no material data breaches reported during the year under review.
The Group has appointed Data Protection Managers in each of its divisions as well as at its Corporate Office to ensure compliance to the Group Privacy and Data Protection Policy and successful integration of data privacy into all its operations.
Support of external training institutions
The Group is committed to educational development in all three divisions and provides financial and other necessary support toward advancing healthcare education.
Respecting human rights
The Group is committed to conducting its business in a manner that respects and promotes the human rights and dignity of people and avoids involvement in human rights abuses throughout its operations and relationships. This commitment is entrenched in the Group’s Ethics Code, which is further supported by the Group’s commitment to:
- avoid and not contribute to any indirect adverse human rights impacts that are directly linked to the Group’s operations or services by its suppliers or other business relations;
- respect patients’ rights, including but not limited to privacy, confidentiality, dignity, no discrimination, full information on health status and treatment, a second opinion, access to medical records, self-determination and participation, refusal of treatment and the right to complain;
- value diversity and equal opportunities for all in the workplace; and
- not tolerate any form of unfair discrimination, such as relating to access to employment, career development, training or working conditions, based on gender, age, religion, nationality, race/ethnic origin, language, HIV/Aids status, family status, disability, sexual orientation or other form of differentiation.
Modern slavery and human trafficking
The Mediclinic Modern Slavery and Human Trafficking Statement, which is available on the Company’s website, sets out the steps Mediclinic has taken to prevent any form of modern slavery and human trafficking, which includes any direct form of forced labour or child labour in its business, or indirectly through its supply chain. During the year, Mediclinic has developed additional steps to strengthen its position in monitoring slavery and human trafficking activities, to ensure that these practices are not taking place in its supply chains.
The Group values diversity and provides equal opportunities in the workplace, a matter which has received significant focus by the Nomination Committee during the year. The diversity representation (by race, gender and age) of the Group’s most senior governing bodies, as well as direct reports to members of those governing bodies, are provided in the Corporate Governance Statement and the Nomination Committee Report. Please also refer to the 2019 Sustainable Development Report for more information.
Broad-based black economic empowerment (South Africa)
Mediclinic Southern Africa’s commitment to transformation within the South African context has culminated in a comprehensive review of its transformation strategy. Mediclinic has embarked on a transformation journey which is to embed a transformation strategy encompassing diversity and inclusivity to meet business imperatives while ensuring that legislative compliance is maintained. Mediclinic Southern Africa believes that Broad-Based Black Economic Empowerment is not simply aimed at redressing the wrongs of the past, but a pragmatic growth strategy that aims to realise the country’s full economic potential.
Mediclinic Southern Africa’s five-year (2018–2022) employment equity plan was approved by the Department of Labour in November 2018. The summarised employment equity report is included in the 2019 Sustainable Development Report.
The number of black employees increased year-on-year from 72.1%to 72.8% of total employees; and black management representation increased from 11.0% in 2006 to 29.0% in 2019, with a slight decrease between 2018 and 2019 (2018: 29.4%), based on Mediclinic Southern Africa’s financial reporting period although the decrease in percentage does not imply a decrease in heads as far as black managers are concerned.
Due to the expatriate nature of the population in the UAE the workforce of Mediclinic Middle East includes staff from multiple nationalities and cultures and therefore the current focus is more on gender diversity, especially at managerial level. The UAE Government is driving a program called Emiratisation to promote the employment of UAE nationals in the private sector. Mediclinic Middle East has specific Emiratisation strategies aimed at the employment of UAE nationals with specific targets set for business units at division level.
Corporate social investment
The Group contributes to the well-being of the communities within which it operates by investing in continuing initiatives that address socio-economic problems or risks. It has established itself as an integral member of these communities, enriching the lives of many communities throughout Switzerland, Southern Africa and the UAE.
The Group’s CSI activities are structured around the improvement of healthcare through training and education, sponsorships, donations, employee volunteerism, public private initiatives and joint ventures. Many of the Group’s initiatives relate to providing training and to the financial support of training. Due to the socio-economic conditions in Southern Africa, the majority of the Group’s CSI contributions are by Mediclinic Southern Africa.|