Private hospital firm replacing staff with AI in South Africa

Mediclinic owner Remgro has informed investors that it has frozen all new recruitment and offered a voluntary early retirement package to corporate office and shared service personnel as it enhances its operating model.

This was revealed during Remgro’s 2025 Capital Markets Day. The improved operating model will leverage artificial intelligence (AI) to strengthen Mediclinic’s core business by focusing on operational efficiency.

Mediclinic’s chief operating officer, Bertrand Levrat confirmed that the hiring freeze and early retirement offer will help cut administrative costs.

“For SA-based corporate office people and shared services people, we have offered early retirement package. These will enable us to reduce the administrative costs of the group,” he said.

Levrat was appointed chief operating officer at Mediclinic in June 2024 and appears to have been brought in to lead the company’s AI evolution. He was previously the chief executive officer at Geneva University Hospitals.

During his tenure at Geneva, Levrat oversaw AI applications, including simplifying administrative tasks and optimising patient flow — areas in which Mediclinic wants to improve efficiency.

Mediclinic said the strategy could help the firm save nearly R2 billion by 2027. The company emphasised that the hiring freeze does not apply to nurses and doctors.

The company said its South African business was included in implementing its new operating model, and formed part of Mediclinic’s broader strategy to leverage AI and automation.

Mediclinic highlighted several successful examples of the adoption of AI and automation in the medical field:

• An AI model for scheduling appointments with doctors in AI has helped improve operational efficiency through reduced standby time and resulted in an additional 100 bookings per day at Mediclinic Middle East.
• The implementation of an AI agent to procure clinical documentation is saving man-hours, resulting in cost savings in staff time.
• The automation of clinical coding through AI is showing the potential for increased efficiency and accuracy in billing.
• AI agents deployed in revenue cycle management are showing the potential for cost savings in administrative processes.
• Mediclinic has started deploying AI models to read and interpret radiology, improving radiologists’ efficiency.

Mediclinic has appointed a team operating under its chief data officer to implement the AI, data, and automation strategy.

The team is responsible for establishing governance, processes, and technology frameworks surrounding AI and automation. The company will also provide ongoing AI upskilling and education for its workforce.

Following early reports on Mediclinic’s plans, Levrat emphasised that AI will not be used to replace full-time employees.

“This transformation includes the realignment of our corporate office structures, reinforcing our ability to support our facilities in providing exceptional care to our patients,” he told Daily Maverick.

“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.”

Strong financial performance

During his Capital Markets Day presentation, Levrat emphasised that the private hospital firm isn’t in financial trouble, but in a sound financial position.

Its latest financial results for the six months ended 30 September 2024 revealed a 6% increase in revenue over the same period in 2023.

Revenue grew from $2.2 billion (R40.8 billion) to $2.34 billion (R43.3 billion) during the period.

“The group delivered satisfying results for the period in a challenging operating environment,” Mediclinic reported.

At the same time, its operating profit increased by 26% from $132 million (R2.4 billion) as of September 2023 to $166 million (R3.2 billion) as of September 2024.

However, the company’s net profit remained consistent at $5 million (R93 million).

“The Group’s performance for the six months ended 30 September 2024 was driven by good volume growth across all divisions,” it said.

Looking at Mediclinic Southern Africa, revenue grew by 10% from $557 million (R10.3 billion) to $613 million (R11.4 billion), while operating profit increased by 15% to $76 million (R1.4 billion).