sustainable development report - mediclinic...

expertise You can trust.

sustainaBLe DeVeLopMent report for the year ended 31 March 2013

SCOPE AND BOUNDARY OF REPORT 1

REPORTING PRINCIPLES 2

ORGANISATIONAL STRUCTURE 2

EXTERNAL RECOGNITION AND ACHIEVEMENTS 4

KEY PRIORITIES: PERFORMANCE AGAINST OBJECTIVES 5

ASSURANCE 9

MANAGEMENT APPROACH 10

ETHICS AND COMPLIANCE 10

ENGAGEMENT WITH OUR STAKEHOLDERS 12

Patients 13

Employees and trade unions 15

Doctors 16

Suppliers 17

Healthcare funders 19

Government and authorities 21

Industry associations 23

Investors 25

Community 25

Media 25

QUALITY OF CARE AND FACILITIES 26

Clinical quality 26

Quality of facilities and equipment 26

Patient satisfaction 29

BROAD-BASED BLACK ECONOMIC EMPOWERMENT 30

ECONOMIC IMPACTS 33

Access to and affordability of healthcare 33

Efficiency and cost-effectiveness 34

Healthcare reform 35

Public private initiatives 36

contents

More inForMationThis Sustainable Development Report is published as part of a set of reports in respect of the financial year ended 31 March 2013, all of which are available on the Company's website at www.mediclinic.com.

OUR PEOPLE 38

Employee composition and turnover rate 38

Labour relations and working conditions 40

Performance management 40

Employee recruitment, retention and remuneration 41

Diversity and equal opportunities 44

Health and safety at work 45

TRAINING AND SKILLS DEVELOPMENT 48

Employee training 48

Continuous professional development of doctors 52

Supporting academic institutions 52

INVESTING IN THE COMMUNITY 54

ENVIRONMENTAL PERFORMANCE 58

Environmental policy 58

Environmental management and risk assessment 58

Emissions 60

Waste management and recycling 63

Water consumption and recycling 64

Energy conservation 65

Material use 66

Biodiversity 66

Compliance 66

FEEDBACK 66

GRI G3.1 DISCLOSURE INDEX 67


notice oF annuaL GeneraL MeetinG 2013 anD proxY ForMTHIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.


application of King iii principles 2013

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Application of King III Principles 2013


annual financial statements for the year ended 31 March 2013

Annual Financial Statements 2013

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Notice of Annual General Meeting 2013 and Proxy Form


integrated annual report for the year ended 31 March 2013

Integrated Annual Report 2013

MeDicLinic SUSTAINABLE DEVELOPMENT REPORT 2013 1

As a Group, Mediclinic is firmly committed to managing our business in a sustainable way and upholding the highest standards of ethics and corporate governance practices. The benefits of delivering on these commitments are many – through our sustainability efforts we maintain our business integrity, we maintain and improve the confidence, trust and respect of our stakeholders, we offer improved access to capital by providing a responsible investment proposition, and we increase our ability to attract and retain staff.

Mediclinic’s track record on delivering growth and creating long-term value in all its business operations in Southern Africa, Switzerland and the UAE is testament to our strategy of being a long-term player and delivering a sustainable business. While growth, profitability and creating shareholder value are certainly major strategic drivers, with a compounded annual growth rate for the past seven years of 28.9% in Group revenue and 29.3% in normalised EBITDA, this cannot be achieved unless we have the best possible clinical quality standards for our patients; value our employees by following fair labour practices and offering competitive remuneration, training and development opportunities; respect the communities within which we operate and contribute to the well-being of society; and carefully manage our impacts on the environment by focusing on our carbon footprint, use of energy, and water resource and waste management.

It is evident from the Group’s risk profile that regulatory reforms are changing healthcare, where private healthcare providers are often the key focus group. We manage these risks effectively,

as reported in our risk Management report and the operational reviews included in the integrated annual report. Despite the many challenges facing private healthcare today, we are confident that Mediclinic is a growing and sustainable business delivering value to all our stakeholders in the short, medium and long term.

scope anD BounDarY oF reportThis report is Mediclinic’s 11th Sustainable Development Report in respect of the financial year ended 31 March 2013. An abridged version of this report is included in our integrated annual report in respect of the financial year ended 31 March 2013.

With this report, we aim to provide our stakeholders with information on the non-financial aspects of the corporate practice of the Group and all its business divisions in Southern Africa, Switzerland and the United Arab Emirates (“UAE”) that, in turn, create economic, social and environmental value. The scope of this report includes the Group’s operations in Southern Africa, Switzerland and the UAE, but as a JSE-listed company with the majority of our operations based in South Africa and with largely South African investors, particular emphasis is placed on our Southern African operating platform. Although we are a private hospital group with materially the same principles applying in each of our operating platforms, each of our operating platforms is managed separately and they have some cultural and economic differences – we therefore provide information about each platform under separate headings to give our stakeholders a better understanding of the variances within each of our three operating platforms.

Please refer to the glossary of terms included in the integrated annual report of Mediclinic for the financial year ended 31 March 2013 published at www.mediclinic.com. References to other reports (such as the Operational Reviews, Risk Management Report and Clinical Services Report) also refer to the reports included in the integrated annual report.

An abridged version of this report is included in the integrated annual report.

2 MeDicLinic SUSTAINABLE DEVELOPMENT REPORT 2013

reportinG principLes The principles and recommendations on integrated sustainability reporting contained in the King Report on Governance for South Africa 2009 (“King III”) as well as the G3.1 Sustainability Reporting Guidelines developed by the Global Reporting Initiative (“GRI G3.1”) form the basis of this report. The report was prepared in accordance with application level C of the GRI G3.1. The Gri G3.1 disclosure index, which identifies the location of the standard disclosures required by the Global Reporting Initiative’s sustainability reporting guidelines, is included as an annexure to this report.

As referred to in the integrated annual report, we have also noted and applied several of the recommendations contained in the local and international discussion papers and consultation drafts on integrated reporting issued by the Integrated Reporting Committee of South Africa and the International Integrated Reporting Committee. As a constituent of all the JSE SRI (socially responsible investment) indexes conducted to date, which index showcases those listed companies meeting a set of criteria that measure economic, social and environmental commitment and performance, due regard is also given to the JSE SRI index criteria.

orGanisationaL structureMediclinic is an international private hospital group with three operating platforms in Southern Africa (South Africa and Namibia), Switzerland and the UAE, with its Head Office situated in Stellenbosch, South Africa. The Group’s management and operational structure is also divided into three operating platforms, as illustrated in Figure 1. The three operating platforms operate separately from one another, each with its own management team. Mediclinic International, as the holding company of the Mediclinic Group, sets the strategic objectives and governance framework for the Group. The management teams of the operating platforms report to the Executive Committee of Mediclinic on a regular basis. Because of the Group’s structure, reporting on each element included in this report is done per platform, unless Group standards apply.

The Group concluded a formal process to strategically re-align the international Group’s organisational structures to be more nimble and efficient. In the process we addressed the structures at operating platform and the international level after an in-depth analysis performed by international advisors. The changes included the streamlining of board and sub-committee structures at platform level, the appointment of discipline-specific cross-platform synergy teams with defined governance structures, the streamlining of regional management structures in Mediclinic Southern Africa and the gradual standardisation and centralisation of support services at Hirslanden. The required organisational re-alignment of the Southern African platform will be planned in more detail and implemented during the next financial year.

One of Mediclinic’s strategic objectives is to position itself as a leading international private hospital group and in this regard we recognise the importance of our brand. The Mediclinic brand identity with its new logo and slogan “Expertise you can Trust.” was launched in 2011 in respect of the Company and its Southern African operations and now well entrenched. During the year, the brand was selected by Superbrands, an independent arbiter of branding, as one of the leading brands in South Africa. The Group’s operations in Dubai were rebranded to Mediclinic during the year in line with the Group’s brand. The Group’s operations in Switzerland continue to operate under the highly respected Hirslanden brand, but minor changes were also made during the year to the logo and other communication material to align it with the Mediclinic brand.

as a Group, MeDicLinic is FirMLY coMMitteD to ManaGinG our Business in a sustainaBLe waY anD uphoLDinG the hiGhest stanDarDs oF ethics anD corporate GoVernance

FiGure 1: ORGANISATIONAL STRUCTURE


100% owned through wholly owned subsidiaries.

100% owned through wholly owned subsidiary (with some

group companies partly owned and doctor shareholding in hospital

investment companies).

100% owned through wholly owned subsidiaries.

nature oF ownership

6 508 (which include full-time and part-time permanent employees)

Operates 14 private hospitals with 1 487 beds in Switzerland.

countrY oF operation

Operates 49 private hospitals throughout South Africa and three in

Namibia, with 7 436 beds in total.

hospitaLs anD cLinics in operation

Operates two hospitals and eight clinics with 382 beds in Dubai in

the United Arab Emirates.

14 927 (18 594 full-time equivalents, which include agency staff)

2 040

nuMBer oF eMpLoYees

BranD or traDinG naMe

South Africa and Namibia United Arab EmiratesSwitzerland


FiGure 2: ExTERNAL RECOGNITION AND ACHIEVEMENTS Group Included in the 2012 JSE SRI Index for the ninth consecutive year, an initiative of the JSE which

showcases those JSE-listed companies meeting a set of criteria that measure economic, social and environmental commitment and performance.

Report prepared in accordance with GRI G3.1 sustainable development reporting guidelines with a self-declared application level C.

Finalist in the Internal Marketing Programmes category for “Mediclinic Group Conference”, with media partner Jupiter Drawing Room, at the prestigious Loerie Awards.

southern africa Thirty-three hospitals accredited by the Council for Health Services Accreditation of Southern Africa (COHSASA), an agency accredited by the International Society for Quality in Healthcare to accredit hospitals.

Thirty-nine of the group’s 52 hospitals ISO 14001:2004 (environmental management) certified.

Ranked joint 4th position in the Carbon Disclosure Project 2012.

Externally assessed BBBEE scorecard at Level 4 contributor.

Mediclinic Southern Africa, with communication consultants Stone, won awards in the Social Media for the Public Relations and Digital Media Relations categories at the Public Relations Institute of South Africa’s PRISM Awards 2013.

Mediclinic Family magazine received a highly commended award in the Education, Health, Conservation, Safety & Security category at the 2012 PICA Awards, in which the Magazine Publishers’ Association of South Africa recognises excellence in magazine publishing industry standards.

Selected by Superbrands, an independent arbiter of branding, as one of the leading brands in South Africa.

One of the group’s Nurse Educators was awarded the Young Nurse Leaders Award at the 2012 Leadership Awards of the Forum for Professional Nurse Leaders, which award honours outstanding young nurse leaders (35 years and younger) for distinguishing achievements.

switzerland All 14 hospitals and head office ISO 9001:2008 (quality management) certified.

Klinik Hirslanden, Klinik Im Park and since 2013 also Klinik Stephanshorn recognised as CO2-reduced businesses by the Swiss Energy Agency for the Economy on behalf of the Swiss Federal Office of Energy. This achievement recognises the contracted commitment to reduce CO2 emissions within operations.

All 14 hospitals and head office underwent self-assessment under the EFQM (the European Foundation for Quality Management) Excellence Model. Klinik Hirslanden recognised for four stars and AndreasKlinik Cham Zug recognised for three stars against the EFQM Excellence Model.

The six-storey extension to Klinik Hirslanden in Zurich which opened in May 2013 adheres to the MINERGIE® standards for buildings. The MINERGIE standards are voluntary building standards on sustainable use of energy and a broad use of renewable energy sources resulting in a reduced environmental impact.

uae Both hospitals are Joint Commission International (JCI) accredited. JCI is an international accreditation organisation for healthcare organisations focused on improving the safety of patient care through accreditation. Both hospitals will go through the re-accreditation process in July 2013, along with the first accreditation of the group’s eight clinics. The accreditation of the clinics will result in the group’s clinics being the second network of clinics to receive the JCI network accreditation in the UAE.

The pathology laboratories of both hospitals are ISO 15189:2009 certified. All five clinics with in-house laboratories also achieved this accreditation during the year.

Mediclinic City Hospital’s pathology laboratory is accredited by the College of American Pathologists (CAP) and will undergo re-accreditation in August 2013.

Mediclinic Welcare Hospital was accredited as a Center of Excellence in Minimally Invasive Gynaecology by the Surgical Review Corporation, endorsed by the American Board of Surgeons. As part of the accreditation, four doctors from Mediclinic Welcare Hospital were named Center of Excellence designees.

Mediclinic Welcare Hospital achieved Gold Standard in its re-accreditation by the American Heart Association.

externaL recoGnition anD achieVeMentsWe are proud of the external recognition and achievements during the reporting period highlighted in Figure 2.


FiGure 3: PERFORMANCE AGAINST OBJECTIVES (refer also to Figure 2: External recognition and achievements)

oBJectiVes inDicators oF our perForMance

For more information refer to

prioritY 1: QuaLitY anD saFetY oF patient carecontinued focus on clinical quality

Comprehensive clinical governance programme consisting of focus areas in leadership and accountability, healthcare workforce, infrastructure and environment, clinical care management and clinical information management.

Clinical Hospital Committees with various sub-committees established throughout the Group.

Focused clinical audits used at most hospitals throughout the Group.

Clinical outcomes are benchmarked throughout the Group through participation in external initiatives such as the Vermont Oxford Network, aimed at measuring and improving the quality of care in neonatal intensive care units; the Adult Cardio-thoracic Database, aimed at measuring and improving the clinical outcomes of cardio-thoracic surgery; APACHE III-j, a hospital mortality prediction methodology for adult intensive care patients used to evaluate the quality of care in this complex setting; and the IQIP clinical indicators.

Important clinical indicators such as mortality, extended stay and re-admissions are measured and compared within the Group.

Thirty-three hospitals accredited by the Council for Health Services Accreditation of Southern Africa (COHSASA), an agency accredited by the International Society for Quality in Healthcare to accredit hospitals, which is currently led by a Mediclinic patient safety expert.

All Mediclinic Southern Africa hospitals are participating in the “Best Care…Always” patient safety initiative, a collaborative quality industry initiative to promote patient safety between the public and private sector. Participation shows marked reductions in healthcare-associated infections (HAIs) and continued implementation of changes to address HAIs.

A new cardiac electrophysiology laboratory established at Mediclinic Panorama – the second cardiac electrophysiology laboratory in Mediclinic Southern Africa.

Piloting the application of an internal model for accrediting Hirslanden competence centres at different levels.

Successful introduction of the concept of patient-centred care at Hirslanden group. EFQM model implemented throughout Hirslanden, with all 14 hospitals and head office completing an EFQM self-assessment during the year.

All 14 Hirslanden hospitals and head office ISO 9001:2008 (quality management) certified.

Development of clinical key performance indicators (KPIs) that will be included in the annual doctors’ performance review process at Mediclinic Middle East.

Both Mediclinic Middle East hospitals JCI accredited, with re-accreditation due to take place in July 2013 along with the first accreditation of the group’s eight clinics.

The pathology laboratory of both Mediclinic Middle East hospitals ISO 15189:2009 certified, with all clinics with in-house laboratories achieving accreditation during the year.

College of American Pathologists (CAP) accreditation of the laboratory of Mediclinic City Hospital. Re-accreditation will take place in August 2013.

A Hospital Information System (“HIS”) implemented at Mediclinic Welcare Hospital and One EMR, a centralised electronic medical record software application, implemented across all units to maximise efficiency and ensure all patient records can be accessed from any facility.

Integrated Annual Report: Clinical Services Report

KeY priorities: perForMance aGainst oBJectiVesA few highlights of the Group’s performance against its key sustainability priorities for the period under review are summarised in Figure 3.

All of these focus areas are dealt with in greater detail throughout this report or the integrated annual report in respect of the financial year ended 31 March 2013, also published on the Company’s website at www.mediclinic.com.


FiGure 3: PERFORMANCE AGAINST OBJECTIVES (CONTINUED) (refer also to Figure 2: External recognition and achievements)



prioritY 1: QuaLitY anD saFetY oF patient care continued

provide and maintain high-quality hospital infrastructure

Expenditure on capital projects and new equipment to expand and refurbish facilities, as well as repairs and maintenance of facilities during period under review:

• R968m (2012: R797m) in Southern Africa

• R1 556m (CHF172m) (2012: R1 161m (CHF138m)) in Switzerland

• R150m (AED65m) (2012: R86m (AED42m)) in UAE

Comprehensive maintenance and asset management systems applied throughout the Group.

Integrated Annual Report: Operational Reviews

Sustainable Development Report: Quality and care of facilities

ensure adequate supply and optimal utilisation of skilled and experienced employees

Continuous training and development of our employees (see “employee training and development” below) to ensure retention of staff where skills shortage is most critical.

Various initiatives between Mediclinic Southern Africa and local and national government authorities to collaborate on training needs.

Foreign recruitment drives for nurses from India to alleviate critical nurse shortage in Southern Africa. Hirslanden also recruits from other European countries to address local skills shortages in Switzerland. The majority of Mediclinic Middle East’s staff is recruited from abroad.

Integrated Annual Report: Operational Reviews Sustainable Development Report:– Priority 2:

Nursing and general skills shortage in this Figure 2 below

– Our People: Employee recruitment, retention and remuneration

– Training and skills development

excellent patient and doctor satisfaction levels

Patient satisfaction surveys conducted throughout the Group’s hospitals, with the average patient satisfaction levels at 76% for Mediclinic Southern Africa (with target at 77%), 87% for Hirslanden (with target at 88%) and 93% for Mediclinic Middle East (with target at 90%).

patient satisfaction levels2009/10 2010/11 2011/12 2012/13

Mediclinic Southern Africa 73% 75% 76% 76%Hirslanden* 86% 85% 93% 87%Mediclinic Middle East 90% 89% 89% 93%

* The patient satisfaction results for the period under review are based on the Picker

patient satisfaction survey that was conducted in 2012. It is not comparable to the

2011/12 results which were based on the ANQ (the Swiss National Association for Quality

Development) satisfaction survey. The results shown above, prior to the 2011/12 results,

are also based on the Picker review.

Patient Journey programme initiated at Mediclinic Southern Africa to improve patients’ experience in our hospitals; and discussions under way as to how it can be implemented at Mediclinic Middle East.

Patient satisfaction survey of Mediclinic Southern Africa expanded to include 14 questions on clinical outcomes.

Regular doctor satisfaction surveys conducted throughout the Group.

Hirslanden commenced with the implementation of a Customer Relationship Management System in 2011, which includes a complaint management system and the integration of the existing Hirslanden Healthline database and the database of all affiliated doctors. After evaluation of the pilot project at Klinik Hirslanden, the roll-out to the rest of the group commenced in April 2012 and is progressing well.

Integrated Annual Report: – Chief

Executive Officer’s Report

– Clinical Services Report

Sustainable Development Report:– Engagement

with stakeholders (specifically sections dealing with engagement with patients and doctors)

– Quality of care and facilities: Clinical quality; and Patient satisfaction





prioritY 2: nursinG anD GeneraL sKiLLs shortaGeDevelopment and training of staff to maintain and improve quality service delivery

The average spending on training expressed as a percentage of payroll was 4% (2012: 4%) by Mediclinic Southern Africa, 4.2% by Hirslanden and 0.3% (2012: 0.3%) by Mediclinic Middle East.

Performance reviews to develop staff and identify training needs conducted with all Hirslanden and Mediclinic Middle East employees and with 95.4% of Mediclinic Southern Africa employees.

At Mediclinic Southern Africa 36 274 structured learning interventions were recorded, with 6 187 at Mediclinic Middle East. At Hirslanden, 700 apprentice employees received formal training (federal certificate, higher college, college or graduate students) across 27 professions, of which 599 students were healthcare professionals and 28 junior doctors. In-house leadership and management courses were attended by 232 management employees. Furthermore, approximately 1 000 in-house training sessions were conducted by the group’s 14 hospitals.

The first results of a KPI system to measure Mediclinic Southern Africa’s training performance was developed during the previous year, used as a tool for implementing initiatives to address areas where training results can be improved.

Strong focus on continuous professional development of medical staff at all three platforms.


Sustainable Development Report:– Our people:

performance reviews


retention of staff The Group offers market-related salaries and benefits to our employees, based on the principles of internal equity, external equity and fairness in accordance with the Group’s Remuneration Policy.

Periodic employee satisfaction surveys conducted. Other key performance indicators measured on a continuous basis include turnover rate and absenteeism.

Recruitment approach consistent with promoting the Group as an employer of choice.

Sound performance management procedures in place to identify areas for improvement and training needs, recognising good performance and promoting opportunities for career development and contributing to a contented workforce.

Mediclinic Middle East has reduced working hours for all units from 50 hours to 45 hours per week, an initiative which has gained very positive feedback from employees.

Integrated Annual Report: Remuneration Report

Sustainable Development Report:– Our People:

Labour relations and working conditions; Performance management; and Employee recruitment, retention and remuneration


alleviate shortage of nurses and general skills shortage through in-service training and support of external training institutions

Refer also to the performance indicators under “development and training of staff to maintain and improve quality service delivery” in this Figure 2.

All six of Mediclinic Southern Africa’s learning centres offer the Diploma in General Nursing and the Diploma in Operating Room Practice registered by the Department of Higher Education and Training.

Financial support of more than R4.4m provided to academic institutions in Southern Africa.

Public forums to address skills shortages attended on regular basis and good relations maintained with relevant legislative bodies.

Joint collaboration with Western Cape Department of Health to train Operating Room Practitioners for Groote Schuur Hospital and Tygerberg Hospital.

During the 2012 academic year 520 students completed basic nursing courses; 70 students completed post-basic nursing courses; 978 learners completed other Mediclinic Southern Africa courses in various disciplines.


Sustainable Development Report:– Our People:

Performance management; and Employee recruitment, retention and remuneration






prioritY 3: BBBee (south aFrica onLY)sustainable transformation in all elements of BBBee scorecard

Level 4 contributor on generic BBBEE scorecard, as externally verified.

Number of black employees increased year-on-year from 62.7% to 64.1% of total employees.

Black management representation increased from 11% in 2006 to 22% at year end.

Diversity workshops held at all the facilities throughout the group. Further follow-up workshops were held with management teams during the course of the year.

Sustainable Development Report:– Broad-based

black economic empowerment

prioritY 4: csi/coMMunitY inVoLVeMentimproving the health and well-being of communities in which we operate

Approximately R5.8m (2012: R5.0m) spent on CSI in Southern Africa, of which R2.8m (2012: R2.5m) was donated to 52 accredited community organisations.

Various health awareness campaigns throughout the Group.

Mediclinic Southern Africa partnered with various Departments of Health making our facilities and staff available at no cost:

– 87 surgical procedures to reduce waiting lists at the Red Cross Children’s Hospital in the Western Cape Province;

– 120 female patients screened for breast cancer at three public hospitals in KwaZulu-Natal;

– 52 accredited organisations received monetary support in the amount of R2.75m.

Hirslanden spent CHF1.7m on CSI projects during the period under review through donations.

Mediclinic Middle East contributed approximately AED400 000 (2012: AED400 000) to corporate social responsibility projects during the reporting period. Initiatives included free health screenings, health talks, awareness campaigns on particular health topics and blood donation campaigns. For the year ahead AED500 000 has been budgeted for corporate social responsibility projects and the key focus areas will be health, education, sport and welfare of individuals affected by war and natural disasters in the region.


Sustainable Development Report:– Our

community involvement

prioritY 5: ManaGinG our enVironMentaL iMpactseffective environmental management systems to monitor and minimise impacts

ISO 14001 environmental management standards implemented at all 52 Mediclinic Southern Africa hospitals.

Ranked joint 4th position in the Carbon Disclosure Project 2012.

Mediclinic Southern Africa’s total CO2e emissions decreased from 113 to 111 tonnes CO2e per bed day.

Klinik Hirslanden, Klinik Im Park and since 2013 also Klinik Stephanshorn recognised as CO2-reduced businesses by the Swiss Energy Agency for the Economy on behalf of the Swiss Federal Office of Energy. This achievement recognises the contracted commitment to reduce CO2 emissions within operations.

The six-storey extension to Klinik Hirslanden in Zurich which opened in May 2013 adheres to the MINERGIE® standards for buildings. The MINERGIE standards are voluntary building standards on sustainable use of energy and a broad use of renewable energy sources resulting in a reduced environmental impact.

At Mediclinic City Hospital electricity consumption increased by only 2%, even though there was a 20% increase in bed days.


Sustainable Development Report:– External

recognition and achieve-ments

– Environmental performance


FiGure 4: COMBINED ASSURANCE

assurance output Business processes assureD proViDerIndependent external auditor’s report Financial reporting PricewaterhouseCoopers Inc.Internal auditor’s report (also expanded to Mediclinic Middle East during the year)

Risk-based selection of audit areas Remgro Internal Audit

Internal risk management All key business risk areas Internal management surveysExternal calculation of carbon footprint based on carbon emissions data of Mediclinic Southern Africa

Carbon footprint calculation Carbon Calculated

ISO 14001:2004 certification of 39 of Mediclinic Southern Africa’s 52 hospitals

Environmental management system NQA (National Quality Assurance Limited)/UKAS (United Kingdom Accreditation Service)

COHSASA accreditation of 33 of Mediclinic Southern Africa’s 52 hospitals

Quality standards of healthcare facilities

COHSASA (Council for Health Services Accreditation of Southern Africa), which is accredited by ISQua (the International Society for Quality in Health Care)

BBBEE Level 4 contributor verification

Broad-based black economic empowerment

AQRate

ISO 9001:2008 certification of all 14 Hirslanden hospitals and Hirslanden Head Office

Quality management Swiss Association for Quality and Management Systems (SQS)

Self-assessment against EFQM Excellence Mode by all 14 Hirslanden hospitals and Hirslanden Head Office

Assessment against the EFQM Excellence Model, a framework for organisational management systems aimed at promoting sustainable excellence within organisations.

EFQM Excellence Model

JCI accreditation of both Mediclinic Middle East hospitals (accreditation of clinics planned for June 2013)

Quality and safety of patient care Joint Commission International (JCI)

ISO 15189:2009 certification of the pathology laboratories of both Mediclinic Middle East hospitals

Pathology laboratories of both Mediclinic Middle East hospitals

International Organisation for Standards

College of American Pathologists (CAP) accreditation of the laboratory of Mediclinic City Hospital

Laboratory of Mediclinic City Hospital College of American Pathologists

assuranceThe independent assurance of sustainability reporting and disclosure is recommended in King III, the integrated reporting guidelines and GRI G3.1. There is an increasing trend in South Africa to have limited external assurance on selected non-financial information. We accept our accountability to our stakeholders to present information that is relevant, accurate and reliable. We follow a combined assurance model, with

assurance between management, internal audit and external assurance, as illustrated in Figure 4. We believe that these assurance methods provide the necessary independent assurance over the quality and reliability of those processes and the information presented. The different options and levels of external assurance available are continuously being considered to determine the way forward on external assurance.


ManaGeMent approachThe Group Sustainable Development Policy, Group Environmental Policy, Group Social Affairs Policy and Code of Business Conduct and Ethics codify our long-standing commitment to conducting business responsibly. The policies are reviewed annually by management, with recommendations to the Board as part of the annual policy review. A review was performed in 2013 with no material amendments approved.

The most senior executive manager responsible for coordinating sustainable development throughout the Group is the Company Secretary and Executive: Group Services, Mr Gert Hattingh.

The management approach to the sustainability indicators reported on is dealt with in this report in the relevant sections pertaining to them.

ethics anD coMpLianceCODE OF BUSINESS CONDUCT AND ETHICS

Please visit the governance section on our website at www.mediclinic.com for a copy of our Code of Business Conduct and Ethics and the contact details of the relevant Ethics Contact Persons within the Group.

Conducting business in an honest, fair and legal manner is a fundamental guiding principle in the Mediclinic Group, which is actively endorsed by the Board and management. Ethical behaviour has always been a fundamental guiding principle and management continually focuses on establishing a culture of responsibility, fairness, honesty, accountability and transparency in the Group. This commitment is firmly entrenched in the Group and supports its vision to be regarded as the most respected and trusted provider of hospital services by our patients, doctors and funders of healthcare. The Group’s commitment to ethical standards is set out in the Group’s values, and is supported by the Group Code of Business Conduct and Ethics (“the Code”). The Code provides a framework for employees of the standards of business conduct and ethics that are required of all business divisions, directors and employees within the Group in order

to promote and enforce ethical business practices and standards throughout the Group. The code is available to all staff and also communicated to all new employees as part of the on-boarding process.

ETHICS LINESAny employee or external stakeholder throughout the Group is able to report any wrongdoing on a confidential and anonymous basis to the Ethics Lines of Mediclinic, Mediclinic Southern Africa, Hirslanden and Mediclinic Middle East.

The number of calls received through the ethics lines during the year is indicated in Figure 5. Over the years, the majority of the calls were of a grievance nature. Only in exceptional cases have information been received that has led to the discovery of unethical, corrupt or fraudulent behaviour – a clear indication of an overall commitment to ethical behaviour throughout all levels of the Group.

Mediclinic Southern Africa’s Ethics Line is managed by an independent service provider, which ensures that each call will be treated with the utmost confidentiality; the service is available on a 24-hour basis to all staff and outside stakeholders. All complaints are investigated in accordance with the Code.

FRAUD AND CORRUPTIONThe Group adopts a no-tolerance policy with regard to unethical business conduct, in particular also fraud and corruption, which is addressed in the Code. Strict policies relating to any invitations, gifts or donations received from suppliers or any other party, in terms of which personnel are compelled to declare these to management for approval, apply throughout the Group. Staff members involved in the purchasing of equipment or consumables are also bound to strict ethical principles, ensuring that an impeccable standard of integrity is maintained in the Group’s business relationships.

The Code further prohibits the making of donations to political parties, unless this has been pre-approved by the board or Executive Committee of the relevant operating platform and reported to the Executive Committee of Mediclinic.

FiGure 5: SUMMARY OF REPORTS TO ETHICS LINES

nature oF reportMeDicLinic

internationaL

MeDicLinicsouthern

aFrica hirsLanDenMeDicLinic

MiDDLe east totaLAlleged fraud/corruption – 1 – – 1Alleged theft – – – – –Grievance/complaint 2 60 9 – 71Other – – – – –TOTAL 2 61 9 – 72


No donations to political parties were made by Mediclinic Southern Africa or Mediclinic Middle East during the period under review. In Switzerland the financing of political campaigns through third-party contributions is an official and standard practice. During the period under review, CHF42 560 was sponsored by Hirslanden to several political parties, institutions and associations.

The Audit and Risk Committee assesses incidents of attempted fraud or corruption throughout the Group at each committee meeting. The material incidents of fraud or corruption during the reporting period were an incident of fraud to the value of approximately CHF160 000 at Hirslanden, and two incidents of fraud to the value of approximately R660 000 at Mediclinic Southern Africa. The employees are no longer in the employ of the Group and the necessary corrective action has been taken.

COMPETITIONThe Group supports and adheres to the relevant competition and anti-trust laws applicable in the various countries in which the Group operates. These laws are complex and the Group has therefore issued guidelines to its employees on competition law compliance within their relevant jurisdiction, which are reviewed and updated at least annually.

During the course of the year the South African Competition Commission approved Mediclinic Southern Africa’s involvement in the company which will own the new Centurion hospital, but imposed a condition that certain provisions contained in the shareholders’ agreement pertaining to Mpilo Investment Holdings 2 (RF) (Pty) Ltd between Mediclinic and Phodiso (which is the investment vehicle of a Pretoria-based doctors’ grouping) in relation to the black economic empowerment transaction concluded with Phodiso during 2005, in terms whereof Phodiso, inter alia, provided certain exclusivity undertakings to Mediclinic, had to be removed. Although Mediclinic did not agree with the Competition Commission’s reasoning in this regard it nevertheless agreed to accept the condition and arranged for the agreement to be amended as required, as it did not regard the relevant provisions to be material or to have any significant commercial value.

The shareholders’ agreement pertaining to Mpilo Investment Holdings 1 (RF) (Pty) Ltd between Mediclinic and MP1 Investment Holdings (Pty) Ltd (previously known as Circle Capital Ventures (Pty) Ltd) (“Circle Capital”), in terms whereof Circle Capital (which is an investment entity controlled by the Phosa and Biko families) entered into in relation to the black economic empowerment transaction concluded with Circle Capital in 2005, contained similar exclusivity provisions. Even though this was not a requirement of the Competition Commission, Mediclinic, in order to be prudent and because it also considered the relevant provisions in this agreement to be immaterial, similarly arranged for this agreement to be amended so as to remove the relevant provisions.

The relevant changes to the shareholders’ agreements were effected after the JSE confirmed that Mediclinic did not require shareholder approval for this purpose.

The South African Competition Commission intends to conduct a market inquiry into the private healthcare sector in South Africa within the year ahead. Mediclinic is engaging with the Commission’s representatives on the envisaged process and the draft Terms of Reference, which were released in May 2013. The Commission stated that it wishes to finalise the inquiry by December 2014.

No legal action for anti-competitive, anti-trust or similar conduct was instituted against the Group during the year.

CUSTOMER PRIVACYInformation security policies are in place throughout the Group regulating, inter alia, the processing and protection of own and third-party information. Apart from the one incident mentioned below, there were no substantiated complaints regarding a breach of customer privacy or loss of customer data against the Group during the year. There was, however, one unfortunate event during 2013 where archived patient files of one of Mediclinic Southern Africa’s hospitals were dumped in an open field while in possession of the hospital’s service provider contracted to destroy the files. Fortunately the files were discovered shortly thereafter and returned to the relevant hospital.


Mediclinic views this incident in a very serious light and the necessary action to prevent any similar incident in the future has been taken.

COMPLIANCE During the year, there were no incidents of material non-compliance with any laws, regulations, accepted standards or codes applicable to the Group, with no significant fines being imposed, including concerning specifically:

• health and safety impacts of the Group’s services;

• marketing communications, including advertising, promotion and sponsorships;

• the provision or use of the Group’s services; and • the environment.

enGaGeMent with our staKehoLDers Our commitment to our stakeholders to conduct our business in a responsible and sustainable way, and to respond to their needs, is entrenched in our values and supported by the Group Code of Business Conduct and Ethics. The nature of our business implies close engagement with our stakeholders, as indicated in the stakeholder map (Figure 6). Effective communication with our stakeholders is fundamental in maintaining our corporate reputation as a trusted and respected provider of healthcare and in positioning ourselves as a leading international private hospital group

through our brand philosophy “Science of Care”. A wide variety of communication vehicles are used to engage with stakeholders, which serves as an impact assessment to assess stakeholders’ needs and to effectively respond thereto. Stakeholders’ legitimate expectations have been taken into account in setting our key sustainability priorities (see Figure 3), as reported on throughout this report.

The Company and the three operating platforms regularly publish information relevant to their stakeholders on their respective websites: www.mediclinic.com for Mediclinic International; www.mediclinic.co.za for the Southern African operations; www.hirslanden.com for the Swiss operations; and www.mediclinic.ae for the UAE operations and also makes use of various social media communication methods. During the year, Mediclinic Middle East’s website was completely redesigned in line with the Mediclinic brand.

There have been no incidents of material non-compliance with any applicable regulations or legislation concerning marketing communications.

In South Africa, information is provided in respect of all legitimate requests for information received in terms of the South African Promotion of Access to Information Act. In Switzerland, access to information is governed by the Federal Constitution of the Swiss Confederation granting the right to

FiGure 6: MEDICLINIC’S STAKEHOLDER MAP

Patients

Employees and trade unions

Doctors and clinical services

Suppliers

Healthcare funders

Government and authorities

Industry associations

Investors

Community

Media

MeDicLinic


information. No requests for information were received on this basis. No similar legislation applies in the UAE.

PATIENTS The well-being of our patients forms the cornerstone of the Group’s business; hence its core purpose is to enhance the quality of life of patients by providing comprehensive high-quality hospital services in such a way that the Group will be regarded as the most respected and trusted provider of hospital services by, among others, our patients. The Group is committed to delivering excellent healthcare focusing on the needs and satisfaction levels of its patients and to communicating with its patients through various media. The Group therefore continuously measures patient satisfaction (see latest results in Figure 3) through ongoing satisfaction surveys to identify potential focus areas for improvement in order to ensure the continuous delivery of a quality service at the Group’s hospitals. Mediclinic Southern Africa expanded its patient satisfaction survey by including 14 questions on clinical outcomes. The implementation of standardised satisfaction surveys across the Group is planned for the year ahead, which will enable comparative measurement of patient satisfaction between the Group’s operating platforms and benchmarking against international norms. Some examples of the patient engagement methods specific to each operating platform are outlined below.

SOUTHERN AFRICA

The focus on patient-centric care as an integral part of the company’s brand philosophy has led to the development of the Patient Journey strategy, which is defined as ‘every interaction a patient, family member or visitor has with the Mediclinic community’. After an extensive period of research, which included international best practices, more than 300 touch points during a patient’s interaction with a Mediclinic hospital were identified. These were further investigated to determine how they could be improved to enhance the patients’ experience of our hospitals. A Patient Journey Manager has been appointed and a multi-disciplinary Patient Journey team has been formed to steer the programme.

The Mediclinic Family magazine, aimed at our patients and their families as well as the general public, presents healthy lifestyle and general health-related information. It was awarded a highly recommended certificate in the Education, Health, Conservation, Safety & Security category at the Magazine Publishers’ Association of South Africa’s PICA Awards for 2012, which recognise excellence in magazine publishing.

As a progression of its new brand positioning, Mediclinic Southern Africa launched a comprehensive integrated social media engagement strategy to build brand reputation, harness brand value, engage key stakeholders and inform public opinion. Using its comprehensive network of established media relationships to leverage the digital platforms, all messages communicated through traditional mediums (publications, media releases, media roundtables and press conferences) were cross-pollinated with messages on social media platforms. The first phase was launched in August 2012 with the roll-out of a Facebook page, Twitter account and LinkedIn, as well as two blog sites – Mediclinic Info Hub and The Future of Healthcare. The former is aimed at answering questions related to medical and lifestyle conditions by drawing on the expertise of our associated doctors, while the latter provides informed, well-researched opinions about the multifaceted healthcare landscape in South Africa. For the next financial year, focus is on quality content, which when published and shared more effectively creates opportunity to engage with communities, including healthcare professionals.

One of the two awards Mediclinic Southern Africa, with communications consultants Stone, received at the Public Relations Institute of South Africa’s PRISM Awards 2013 was in the Social Media for the Public Relations category for the strategy and research behind the launch of Mediclinic’s social media platforms.

The group’s two client alliance programmes, Mediclinic Baby and Mediclinic Senior, are aimed at increasing the value-added offering to patients and thereby enhancing their experience both inside and outside our hospitals. Mediclinic Baby


is exclusively designed for new parents of babies born at Mediclinic hospitals and is intended to assist them through every stage of their pregnancy, birth and baby care journey. Benefits include antenatal classes, baby clinics and birth registration, as well as UIF services to special offers and gifts such as the Pregnancy Journal and Baby Bag. In addition, the Baby Wellness DVD and a dedicated pregnancy and baby website (www.mediclinicbaby.co.za) have been introduced as part of the service.

Mediclinic Senior is a free loyalty programme for the over 50s created to optimise health and well-being through education, health awareness and regular medical screening. This involves information sessions, health-screening clinics and quarterly packs. A new product initiative was the introduction of the Mediclinic Senior Retreats, which incorporate a speaker programme by medical professionals covering a wide range of health-related topics and health screening sessions. Retirees are a critical extension of Mediclinic’s brand and culture and as such a retirees’ engagement strategy was implemented following the Mediclinic Southern Africa rebranding in 2011. Retirees are included in the Mediclinic Senior programme as a result.

There is also a 24-hour helpline to support these programmes, which answers medical and hospital facility enquiries, as well as client alliance programme questions. Our objective is to build long-term relationships as a trusted healthcare service provider through these programmes.

In addition, Mediclinic supported a number of National Department of Health initiatives during the year, including the heart and stroke and diabetes campaigns. About 10 000 people underwent blood glucose, cholesterol and blood pressure levels screening at the hospitals during each event. An extensive pregnancy awareness project was held in February 2013.

SWITZERLAND

Health-related information is provided to current and former patients through local hospital magazines, the group’s website and a call centre offering information on the group’s doctors

and hospitals, as well as advice on medical and healthcare matters. The website is recognised as a strong interaction platform, offering relevant healthcare information to patients. In addition to the website, the group hosts specific sites dedicated to medical centres of expertise such as to oncology, heart diseases, radiotherapy and urology.

UAE

Mediclinic Middle East engages with its patients and prospective patients on multiple levels. All activity is designed to educate, inform and make the patients’ interaction with the group’s facilities as easy and seamless as possible. The company produces a variety of patient education literature, which is available in public areas at all hospitals and clinics; it offers a variety of patient education seminars and group meetings (both free and for a fee), e.g. mothers’ support groups and diabetes education groups; it sends updates on special offers and new doctors to registered patients by email and SMS, and gives patients the option of requesting their appointments online. With the rebranding to Mediclinic taking place during the reporting period, as well as the closure of the Emirates Diagnostic Clinic and the opening of Mediclinic Beach Road, regular patient engagement to communicate the changes was especially important. Patients received regular updates, all patient literature was rebranded, all social media sites were renamed but retained all existing followers, the website was redesigned and an extensive media advertising and PR campaign was conducted. This included various editorial articles and interviews, magazine and newspaper advertisements, radio advertising, digital advertising and advertising on billboards throughout Dubai.

As reported last year, social media was adopted as a key communication platform for patients and prospective patients. During the year, the Mediclinic Middle East Facebook pages have seen significant growth in followers. To coincide with the brand relaunch in December 2012, a Mediclinic Middle East (@MediclinicME) Twitter feed was launched which is also seeing an encouraging upward trend in followers.


During the year, Mediclinic Middle East also launched its first mobile application. The application gives users the opportunity to find information about our facilities, locate their nearest hospital or clinic, search for a doctor and request an appointment, view virtual tours and see our latest news and special offers. During the year ahead, Mediclinic Middle East plans to integrate its IT systems to enable patients to, among other things, access test results and medical records electronically. The mobile application will become a vital tool in achieving this goal.

EMPLOYEES AND TRADE UNIONSThe Group’s employees are an asset highly valued. The employees’ trust and respect are vital to Mediclinic’s success. Listening to and responding to the Group’s employees’ needs through effective communication and sound labour relations are important components in being regarded as an employer of choice among existing and prospective employees and vital to maintain a contented, loyal workforce. Mediclinic’s staff members are treated fairly, remunerated competitively and are involved in the day-to-day running of the organisation, contributing to the success of the Group. Throughout the Group communication with employees is conducted through a variety of media, including magazines providing Group news, newsletters updating staff on human resources-related information, e-mail updates, video conferences and satisfaction surveys. Leadership video conferences are conducted through a satellite communication channel between top management and senior employees across the Group. The inter-platform electronic newsletter, Medi-a, shares news and information between the management staff of the Group’s three operating platforms. Please review the our people section of this report for further information relating to our labour relations. Some further examples of engagement methods specific to each operating platform are outlined below.

SOUTHERN AFRICA

Staff engagement takes place using various media such as Milieu, a quarterly staff magazine available in print and digitally; Nursing Magazine, an annual magazine published to coincide with International

Nurses Day; People’s Interest, a newsletter containing human resources information; and Medibytes, short e-mail news messages. A quarterly electronic newsletter, IPC Acumen, was successfully launched during the year as an educational tool for nurses on infection control.

During the year, the Patient Journey strategy was communicated to staff in a practical and deliberate manner, and was officially launched internally during the annual leadership roadshow. A change management strategy has been put in place to embed the principles and methodologies of the Patient Journey within the culture of the company across all levels. This process includes an intranet-based portal housing stories of exceptional patient experiences, a discussion platform and progress reports on current projects and initiatives. Patient Journey hospital committees will be established during the year ahead.

Company loyalty is recognised with annual long-service awards at hospital as well as at head and regional office level.

Currently 12.4% (2012: 14.1%) of Mediclinic Southern Africa’s staff are covered by collective bargaining agreements with trade unions. The human resources department continuously engages with union representatives in order to promote constructive union relationships. Sufficiently representative unions at locality level form part of hospital committees to encourage dialogue between stakeholders. The company has recognition agreements in place with all unions that have sufficient representation at locality level. Where unions enjoy collective bargaining rights at a locality, salary negotiations are initiated annually in May.

SWITZERLAND

Apropos is a staff magazine providing content on business strategy and new developments; local hospital magazines are intended primarily for patients, but also distributed to staff with local information.

There is no trade union membership among Hirslanden employees.

eFFectiVe coMMunication with our staKehoLDers is FunDaMentaL in MaintaininG our reputation as a trusteD anD respecteD proViDer oF heaLthcare


UAE

The morale of the group’s employees is seen as critical to the ongoing success of the company. Mediclinic Middle East endeavours to keep its staff fully abreast of company news, successes, events and procedures through the intranet site, which is updated daily. Our employees are actively encouraged to participate on the group’s Facebook and Twitter pages.

During the year, Mediclinic Middle East also established a corporate LinkedIn page as part of its social media strategy with the purpose of improving the recruitment process and widening our audience of potential joiners. Since the launch of the official LinkedIn page in July 2012, followers of the company on LinkedIn have grown significantly.

Mediclinic Middle East aims to recognise and reward the contribution of all staff by running a series of staff functions which during the period under review included a staff loyalty/long-service awards event recognising 130 employees for their long service ranging from five to 15 years.

Mediclinic Middle East also organised CME (continuous medical education) events for both internal and external nursing staff and a nursing awards event where nurses who had completed postgraduate educational programmes were honoured. The company also celebrated International Nurses’ Day with a media campaign and gifts for its own nurses.

Trade unions are not permitted in the UAE by law and there is therefore no trade union membership among Mediclinic Middle East employees.

DOCTORS Supporting doctors are significant stakeholders in the Group and play a vital role in Mediclinic’s commitment to quality care, while their freedom of association and clinical independence are simultaneously acknowledged. The ongoing relationship with existing supporting or employed doctors and the recruitment of new doctors remain

critical focus areas. Due to the different clinical models in the operating platforms (as detailed in the organisational overview included in the integrated annual report), our engagement with doctors differs in each operating platform. Any initiative to improve the quality of clinical care needs the support and engagement of the treating doctors. For this reason our Group is actively involved with various programmes to engage with our supporting doctors. Some examples of engagement methods specific to each operating platform are outlined below.

SOUTHERN AFRICA

A referral development model is in place where representatives of the group meet regularly with doctors and their staff to obtain an understanding of their needs and build relationships between the hospital and supporting specialists, as well as between the supporting specialist and the referring general practitioner.

An ad hoc newsletter, MediDr, is distributed to our supporting doctors to keep them informed about company activities. Mediclinic will be launching a unique concept in doctor communication in the year ahead. A Doctor Portal will be hosted on the company’s website, which will give our associated doctors access to peer discussions, an events calendar, a news feed, practice and locum opportunities on a totally secure internet-based platform. The development of the portal is planned to allow doctors to have remote access to their electronic patient files. The Doctor Portal is the first step in the development of a Doctor Journey which, similar to the Patient Journey, will be designed to enhance our supporting doctors at various touch points at the group’s hospitals.

In Southern Africa the structure of the clinical committees at each hospital was revisited and improved. Representatives of the hospital clinical committees now also meet annually to discuss more strategic clinical issues on a national basis.


SWITZERLAND

Doctor satisfaction surveys are conducted every three years with the next survey to be conducted during the last quarter of 2013.

Hirslanden’s network marketing function coordinates the communication and interaction between Hirslanden and the doctor community, and between general practitioners and specialists. A network marketing programme, similar to what applies in Mediclinic Southern Africa, was launched in two test regions in 2012 and in an additional region in 2013. The aim is to extend the programme to further regions during 2013. The feedback from the doctor community is overwhelmingly positive.

Our dedicated internet platform for affiliated doctors (www.hirslandenprofessional.ch) provides our doctors with relevant information about the medical facilities and technology in the Hirslanden group as well as upcoming events and professional education programmes conducted throughout the group. This online initiative is reinforced by our continuous professional education offering to doctors conducted throughout the group with a new brand, the “Hirslanden Academy”.

There are a number of medical networks in place where affiliated physicians of one specialisation get together – anaesthesiology, radiology and general medicine in particular are very active in defining group-wide standards for procedures and materials. These networks are very helpful in learning about the requirements of the participants in their relation to the hospitals. Doctors are involved in different projects of the group, such as the recently launched Lighthouse Project. This project deals mainly with the introduction of electronic patient records in one of the hospitals.

The Hirslanden annual report is distributed to affiliated doctors.

UAE

Approximately 59% of the doctors working within Mediclinic Middle East are directly employed by the group, with the remaining 41% community-based specialists (“CBS”) who either have

admission rights at the group’s hospitals or who have outpatient clinics in the facilities. For doctors employed by the group we run monthly meetings to address current issues and concerns. The Chief Clinical Officer also chairs a monthly Clinical Forum meeting, which is attended by the group’s hospital directors, medical directors and nursing directors, group clinic manager and business support service manager to discuss all clinically related issues in the group.

Mediclinic Middle East is the only hospital group in the UAE that has a Network Marketing office, which is responsible for establishing and building relationships with the CBS doctors. The network marketing department oversees orientation programmes for the CBS doctors and assists them with the licensing process, medical malpractice insurance if required, facilitates insurance approvals for their patients and also collects fees if necessary. It also acts as the link between a CBS doctor and the facility when an outside referral is made. This ensures that an appointment can be made smoothly and swiftly. Some marketing activities and hospital information training are also provided to CBS doctors with clinics at the group’s facilities.

In addition to the seminars for Continuous Medical Education (“CME”) set up by individual hospitals and clinics, Mediclinic Middle East also organised several CME seminars at a company level during the reporting period, which were open not only to Mediclinic Middle East doctors but also to community-based doctors. These CME sessions offer doctors the chance to earn educational and licence accreditation points which are required for licensing purposes.

SUPPLIERS In order to deliver our services we are dependent on a large and diverse range of suppliers, who form an integral part of our ability to provide quality hospital care; we believe in building long-term relationships with suitable suppliers, establishing a relationship of mutual trust and respect. Regular meetings are held with suppliers to ensure continuity of service. We rely on our suppliers to deliver products and services of the highest quality in line with our own 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 for our markets, stability of the organisation and the relevant equipment brand, good-quality and cost-effective solutions, support network, technical advice and training philosophy. In Southern Africa the BBBEE status of a supplier is also a factor in the selection process.

The availability of products and services is imperative in enabling us to deliver quality care to our patients and therefore an important criterion in our supplier selection process. Although not always the case, this often leads to local suppliers being preferred, which also adds to better and faster service delivery and knowledge of local laws and regulations, particularly with regard to pharmaceutical products. In Southern Africa all procurement is done with local suppliers or the local agents of international suppliers. Similarly, in Switzerland approximately 90% of the procurement is from local suppliers or agents of international suppliers. In Dubai all international suppliers and manufacturers are required by law to operate through local agents. As such Mediclinic Middle East is legally required to procure from local suppliers or agents, except in cases where a product is not available in the UAE, where permission to import from foreign vendors is granted. Mediclinic Middle East procures approximately 97% of its supplies from local agents.

Because of the geographic spread of the Group’s operations, the potential of possible cost savings, less administration and improved efficiency, Mediclinic has initiated international procurement initiatives with the aim of unlocking synergies and possibly implementing standardisation for the greater benefit of the Group. This initiative was strengthened by the recent appointment of an International Procurement Manager to focus on the development of an international procurement strategy aimed at lowering costs of pharmaceutical and medical procurement for the Group. It is envisaged that this dedicated resource will align international procurement activities and

optimise current and future saving initiatives. This position will establish an effective communication framework for engagement of stakeholders across the Group’s platforms.

International consolidated data comparisons remain a key driver of international procurement. Mediclinic initiated a project to develop a master data management (“MDM”) strategy that will support the key strategic objective of international procurement. The Group is faced with numerous regulations worldwide, which hinder certain procurement strategies as would be the case with non-regulated consumables. A growth incentive system has been established with the top suppliers of capital medical devices to all platforms. Procurement expenditure volumes during the period under review exceeding agreed baselines due to standardisation and growth have resulted in tangible benefits to the Group.

Any form of perverse incentives is prohibited and the Group’s Ethics Lines are available to all suppliers. Staff members involved in the purchasing of equipment or consumables are also bound to strict ethical principles ensuring that an impeccable standard of integrity is maintained in the Group’s supplier relationships.

Annual Supplier of the Year award ceremonies are established in Southern Africa and the UAE, recognising the important role of our suppliers in our business and honouring their service excellence.

SOUTHERN AFRICA

Formal and uniform procurement processes apply with regard to tenders, contracting and preferred supplier agreements to promote a transparent procurement process and the application of sound supplier selection criteria. Mediclinic Southern Africa has introduced an electronic tender system that focuses on pharmaceutical products (excluding medicine). This system will allow for more accurate tender scoring and promotes transparency in the procurement process.


SWITZERLAND

Standardised terms and conditions governing Hirslanden’s supplier relations were defined and implemented during the year.

UAE

Mediclinic Middle East also facilitates interaction between suppliers and doctors by offering suppliers the opportunity to co-host CME (continuous medical education) events. Mediclinic Middle East maintains high levels of communication and professional working relationships by formalising its supplier evaluations in a detailed and structured manner.

HEALTHCARE FUNDERSAll role players in healthcare funding, such as the medical schemes, administrators and managed care companies, play a key role in Mediclinic’s business, with privately insured patients remaining the Group’s largest client base. We aim to maintain our healthy relationship with funders by meeting regularly with them to debate possible cost savings and healthcare delivery improvements. We conduct tariff negotiations with funders in a transparent and fair manner.

Healthcare funders most often express concern regarding the price/cost of healthcare in private hospitals, network arrangements, which limit the members’ choice of hospitals in exchange for a reduced tariff from the hospitals, quality of care rendered in hospitals and patient satisfaction with the service rendered. Mediclinic addresses these concerns by continuously trying to find ways to offer our services more efficiently in order to reduce costs and therefore tariff/price inflation. We aim to ensure all our hospitals are, as far as possible, included in all schemes’ hospital networks. In terms of quality and patient satisfaction, we continuously share studies and information gleaned from both internal and external data to address healthcare funder concerns.

SOUTHERN AFRICA

Private healthcare funding in South Africa is principally provided by medical schemes, with approximately 90% of the group’s hospital admissions and revenue funded by medical

schemes. The significance of the role of the medical schemes in the business of Mediclinic is clear, with continual engagement and fostering of relations being paramount. In recent years, the funder market has experienced an ongoing trend of consolidation. An analysis of medical schemes in 2011 indicated that concentration within the market is increasing, with the four largest schemes covering 59% of total beneficiaries. This increasing concentration is due to the introduction of the Government Employees Medical Scheme (“GEMS”) in 2006, as well as the above average growth of the largest medical scheme, Discovery.

The medical scheme administrators and managed care organisations are two further key stakeholder groups closely associated with medical schemes and perform key functions in the operations of a medical scheme.

Administrators are contracted by a significant proportion of medical schemes to perform, among other functions, the negotiation of the annual tariff with Mediclinic, collection of membership contributions and maintenance of membership records as well as settling medical bills of medical scheme members. Administrators, who often serve a number of medical schemes and have a countervailing market concentration, exercise significant influence in the private healthcare sector in terms of pricing, reimbursement models and many other key aspects of private healthcare development.

A study undertaken in 2011 demonstrates the administrator market concentration. The Herfindahl-Hirschman Index (“HHI”) is an economics tool used to measure the concentration within a particular market. Markets with an index in excess of 1 800 points, suggest that the market may be concentrated. In 2012, the HHI for the administrator market was estimated to be around 2 181 points. The corresponding figure for the private hospital market was estimated to be around 2 164. Although this suggests that both markets may be concentrated, an important observation is that these figures indicate that the funder and provider market are in fact evenly balanced. In 2011, three administrators represented 76% of total beneficiaries. There has since been further

prouDLY seLecteD BY superBranDs, an inDepenDent arBiter oF BranDinG, as one oF the LeaDinG BranDs in south aFrica


consolidation within the funder market, while concentration levels in the private hospital market has remained largely unchanged. These trends observed in the funder market need to be closely monitored and effective stakeholder engagement with funders is necessary to ensure Mediclinic Southern Africa is well adapted for the market changes ahead.

Managed care organisations are regularly contracted by medical schemes to provide a service aimed at cost containment and clinical appropriateness of services to members.

Each important stakeholder in the funder market requires tailored engagement to ensure the continued favour of Mediclinic as a first choice provider of hospital services. Much of this is reliant on data collection, mining and reporting as it facilitates a factual understanding of funder expenditure. Our engagement and negotiations with funders are conducted in a fair and transparent manner. Funders increasingly face affordability constraints due to, among other things, medical inflation, deteriorating member risk profiles, ageing membership and legislative constraints. Funders are progressively looking to utilisation management and provider networks to address affordability concerns and Mediclinic is investing resources and time in such initiatives going forward, as further detailed in the section of this report dealing with access to and affordability of healthcare under Economic Impacts.

Funders are incentivised to focus increasingly on measures to manage utilisation, understanding that healthcare expenditure is not singularly a function of the price of services and medical inflation, but rather a combination of factors including utilisation. Mediclinic has and continues to keenly pursue mechanisms to improve efficiencies in our engagement with funders, including implementation of B2B, EDI and faster payment turnaround in the interests of passing back gains and containing the medical inflation. In managing utilisation, funders have progressively employed a strategy of implementing provider networks. Many have employed sophisticated data systems to consolidate all associated independent costs of an

event, i.e. consider the professional fees, radiology and pathology in addition to the hospital costs, into a comparable cost per event (CPE) and with this information devise a cost-efficient network of hospitals. In many instances, Mediclinic has performed well in this framework and we will invest further resources to develop this performance and further position ourselves as the provider of choice to the funders.

SWITZERLAND

Hirslanden has contracted with 150 funders relating to tariff determination. These contracts cover about 90% of all admissions, with the remaining 10% being self-payers. During our regular engagement with funders, the quality of care, infrastructure and increased efficiency are raised as important issues.

UAE

Funders are extremely important stakeholders in Mediclinic Middle East’s business, with approximately 75% of its revenue attributable to privately insured patients. The UAE healthcare industry remains fragmented with no central representation or governance to guide the development of the market. Increased regulatory involvement is expected in this regard in the future. The recent introduction of an electronic claims submission (e-claims) system by the Dubai Health Authority (DHA) has certainly strengthened the DHA’s ability to collect clinical and financial data for the entire industry, as all claims now flow through a central portal, mandated by the DHA. Further recent developments from the DHA such as capacity planning studies, exploration of DRG-based tariff structures, and a proposed revision of healthcare legislation certainly points to their increased involvement in the coming years.

Mediclinic Middle East supports these initiatives and aims to work closely with both the DHA and private insurers to achieve mutually beneficial outcomes. An example of this collaboration was the development of the e-claims system, where Mediclinic Middle East was the only provider elected by the DHA to participate. The group’s Funder Relations Department has been restructured to allow greater participation in such strategic development opportunities.


GOVERNMENT AND AUTHORITIESNo financial assistance is received from government by any of the Group’s operating platforms.

SOUTHERN AFRICA

Department of Health Mediclinic Southern Africa is involved in ongoing communication and interaction with the national and provincial Departments of Health (“DoH”). Issues pertaining to, inter alia, licence applications, inspection of facilities, approval of building plans and comment on draft legislation and regulations are dealt with on a continuous basis. There are dedicated stakeholder engagement plans by both Mediclinic Southern Africa and the Hospital Association of South Africa. Through the group’s engagement initiatives, we aim to create greater understanding of, and insight into, key issues facing the private hospital industry.

The group is assisting the DoH with several of their initiatives, including the revision of staffing norms for nurses, the roll-out of the National Nursing Strategy and the “Best Care... Always!” initiative, a collaborative quality initiative to promote patient safety between the public and private sector.

All available information pertaining to the government’s planned implementation of a National Health Insurance (“NHI”) to provide healthcare to all citizens in an equitable manner is monitored closely. The group’s health policy unit focuses on research and the development of a suitable NHI position paper. The health policy unit will also take part in public debates and individual engagement opportunities with the DoH and other health stakeholders such as non-governmental organisations and universities’ Health Economics departments.

Since the release of the NHI Green Paper, Mediclinic has embarked on a comprehensive integrated NHI public affairs strategy to provide positive contributions. The three-tiered strategy (engagement, lobbying and research provision) has facilitated significant process influence and improved understanding of the NHI issues at hand. Part of the strategy involved a media forum

in which the company’s executive management contextualised various matters surrounding the proposed legislation with members of the media.

South African Nursing Council Mediclinic Southern Africa engages with the South African Nursing Council on all issues relevant to the profession. The Council’s failure to finalise the proposed new nursing qualifications continues to impact the group’s ability to train nurses. This situation is being addressed through the industry body.

Council for Medical SchemesThe Council for Medical Schemes is an autonomous statutory body established by the Medical Schemes Act tasked with the responsibility to provide regulatory supervision of private health financing through medical schemes in order to ensure that the best interests of medical scheme members are attended to by all South African medical schemes. The Council monitors, among other factors, the financial stability of medical schemes and reports on this annually in September (data relating to the preceding year). The data, albeit delayed, is of great value to Mediclinic Southern Africa in terms of trends in healthcare spending and the financial stability of individual medical schemes. In recent times, we have, however, raised concerns with the Council regarding the consistency, accuracy and conclusions reached from their data – specifically pertaining to spending and utilisation in private hospitals. We have continued to engage these challenges through various industry platforms.

Health Professions Council of South AfricaThe Health Professions Council of South Africa (“HPCSA”) has very specific ethical rules that guide the relationship between medical practitioners and private hospitals, inter alia, prohibiting the employment of doctors by private hospitals in general. Mediclinic Southern Africa, however, has permission from the HPCSA to employ doctors in its emergency centres. Although it is the responsibility of the individual health professionals to adhere to the ethical rules governing their profession, Mediclinic Southern Africa endeavours to structure its relationships with medical practitioners according to these guidelines.


Interaction between the group and the HPCSA takes place from time to time in order to discuss issues of interpretation and application of the ethical guidelines.

South African Pharmacy Council The South African Pharmacy Council is a statutory health professional council responsible for ensuring the provision of quality pharmaceutical services in South Africa by developing, enhancing and upholding universally acceptable standards, professional ethics and conduct, ongoing competence and pharmaceutical care. Mediclinic Southern Africa’s Executive: Pharmacy Services serves as an elected Council member. The Human Resources in pharmacy remains a focus point on the council agenda. The development of a curriculum for a mid-level worker to be a Pharmacy Technician is planned. Mediclinic Southern Africa strives to ensure compliance with all legislative requirements as well as to provide input on the issues surrounding the Good Pharmacy Practice guidelines of the group’s pharmacies, which are assessed by means of regular internal audits, as well as inspections by the inspectorate of the Council and that of the Department of Health.

Engineering councilsMediclinic Southern Africa participates in working groups through various associations to develop health technology regulations relating to the management of healthcare. Through the South African Federation of Hospital Engineering (“SAFHE”) the group held discussions with the Department of Health on ways to assist them with training of technical and clinical personnel working in the health sector. The group and SAFHE hosted a workshop at the bi-annual conference to discuss the Infrastructure Unit Support Systems (IUSS) Project which is a structured collaboration between the Department of Health and other organisations aimed at optimising the acquisition, operation and management of South Africa’s public healthcare infrastructure through all stages of the building lifecycle.

The Clinical Engineering Association of South Africa (“CEASA”) is participating in talks with the Engineering Council of South Africa (“ECSA”) regarding the proposed regulation of the

registration of clinical engineering practitioners. The Department of Health published regulations relating to medical devices during the previous year. Mediclinic Southern Africa has submitted detailed comments to the Department of Health and awaits their response.

SWITZERLAND

The revised Federal Health Insurance Act, which became effective in January 2012, has brought about fundamental changes regarding the financing of hospitals and the reimbursement of hospital services. These amendments also triggered changes to related cantonal healthcare regulations. In the context of these changes, Hirslanden aimed at the inclusion of all of the group’s hospitals on the cantonal hospital lists, and thus to be on an equal footing with public hospitals regarding the provision of hospital services to the general public. The application of the Hirslanden hospitals for cantonal listing as prerequisite for cantonal service mandates involved extensive communication with the cantonal governments and health authorities. The content of these discussions showed that there was a strong need for explaining that a purely state-directed healthcare sector without meaningful competitive elements cannot ensure high quality and affordability. While the application and decision processes have not been concluded in all cantons, the outcomes to date show that Hirslanden has been highly successful in pursuing this strategy.

The current situation regarding the political environment in the Swiss healthcare sector is further elaborated upon in the hirslanden operational review included in the integrated annual report.

UAE

Mediclinic Middle East’s senior management holds regular meetings with the Ministry of Health, Dubai Health Authority, Dubai Healthcare City and the federal government authorities, and actively participates in many public private forums where healthcare legislation and protocols are discussed. The unique nature of certain systems in Dubai warrants a more detailed explanation of our engagement with government and authorities in the UAE.


Ministry of HealthAs required in terms of UAE laws, management engages regularly with the Ministry of Health (“MoH”) to obtain approval of the group’s marketing material, including electronic, broadcast and print media prior to publication, distribution or broadcasting. The MoH is also responsible for all licensing and registration associated with pharmacies, pharmacy staff and medication. Mediclinic Middle East strives to comply with all MoH rules and regulations at all times and enjoys a mutually agreeable working relationship.

Dubai Healthcare CityMediclinic City Hospital is located within the Dubai Healthcare City (“DHCC”) free zone. Free zones have uniquely been designed to contribute to Dubai’s growth and development, allowing foreign companies to legally operate within them, in contrast to the local ownership requirements that apply outside the free zone. Mediclinic Middle East engages regularly with the DHCC’s Centre for Healthcare Planning and Quality (“CPQ”), which sets and maintains international best practice in healthcare delivery and patient care within its precincts about matters such as the issuing of licences for our facilities and healthcare professionals, and the approval of building alterations and advertisements.

Dubai Health Authority Mediclinic Middle East maintains a close working relationship with the Dubai Health Authority (“DHA”), which licenses healthcare professionals to practise at each of the group’s Dubai facilities, apart from Mediclinic City Hospital. Matters of concern such as licensing criteria and examination processes are debated and private sector input is highly valued. Infection control and notification of disease issues are handled closely with the DHA. As reported in the section dealing with engagement with healthcare funders, the group worked closely with both the DHA and private insurers in the development of a new e-claims system, where Mediclinic Middle East was the only provider elected by the DHA to participate.

Nursing and Midwifery CouncilMembers of the nursing team at Mediclinic Welcare Hospital have been invited to serve on numerous government task forces such as the Nursing and Midwifery Council (“NMC”) for the UAE; Scientific Committee for Nurse Specialist Licensing Requirements for the UAE, a sub-committee of the NMC; Scientific Committee for Education Training Requirements and establishment of Centres for Training for Nurses in the UAE, including master’s-level training; Scientific Committee for Examination of Midwifery for the NMC; and Theatre Specialisation Committee.

The Nursing Directorate at Mediclinic City Hospital and Mediclinic Welcare Hospital are involved in the Specialisation Committee, a sub-committee of the UAE NMC, where they are working on defining the specialisation model for nurses in the UAE, including the scope and standards of practice.

Mediclinic Welcare Hospital’s nursing department serves on the Ministry of Health’s Federal Nursing Policy and Practice Committee. Here they have an opportunity to create excellent working relationships with these partners and their input is highly regarded. They also serve on the Federal Nursing Policy and Practice for Psychiatry and Emergency Care task forces.

Mediclinic Welcare Hospital is also sponsoring the first UAE Nursing and Midwifery Conference, organised by the Ministry of Health.

INDUSTRY ASSOCIATIONSHospital associationsSOUTHERN AFRICA

HASA (Hospital Association of South Africa) is an industry association which represents the collective interests of the more than 200 private hospitals representing over 90% of the private hospital industry in South Africa. Mediclinic Southern Africa is a member of HASA and also has representation on its board.

incLuDeD in the Jse sri inDex For the ninth consecutiVe Year, acKnowLeDGinG the Group’s econoMic, sociaL anD enVironMentaL coMMitMent anD perForMance


In light of the healthcare climate in South Africa, HASA undertook a change of direction two years ago to ensure a better focus in the way it engages stakeholders, especially government. As part of this process the association has adopted a new strategy and has comprehensively rebranded and repositioned itself in order to be relevant, transformed, sensitive to national sentiment and in touch with its members’ requirements so as to represent them effectively. Member representation is key in all HASA structures and activities.

A process of integrating all its activities and processes is under way and the association has introduced specific performance measures that will allow its members to ascertain the value they derive from their membership. HASA has described its high-level objective as that of expanding access to healthcare and preserving quality of healthcare services.

Through the hands-on participation of its members, HASA has identified several critical research projects that are aimed at informing the current government-led national health reform initiatives, and is also embarking on a sophisticated stakeholder management drive to create the necessary platforms required for conveying and sharing this information. In order to execute these objectives more effectively, HASA has realigned and integrated its structures, including head office and board committees.

A comprehensive marketing and communications strategy has also been approved to maximise HASA’s assets in supporting its new strategy, new website and the annual conference as important tools for sharing research and opinions with both the public and stakeholders.

We continually engage in constructive debate on issues pertaining to the private healthcare industry and are working closely with the body in engaging with the government on formulating a national health policy that brings affordable, accessible healthcare to a greater cross-section of our population.

Mediclinic Southern Africa has continued to support the publication of research through HASA. These research initiatives serve to provide greater understanding of the South African health system. Examples include research projects by Econex, an economics consulting firm, such as research on factors driving medical scheme expenditure on private hospitals. Research outputs from HASA have become an important source of information in the policy discourse within the country, as they are frequently referenced in policy forums.

SWITZERLAND

Hirslanden, as the largest privately owned hospital group in Switzerland, is a prominent member of the Swiss healthcare community and plays a leadership role in the development of the Swiss hospital sector. Hirslanden is an active member of PKS (Privatkliniken Schweiz), the association of Swiss private hospitals, as well as H+ (H+ Die Spitäler der Schweiz), the hospital association for public and private hospitals in Switzerland. During the year under review, a member of Hirslanden’s Executive Committee served as the President of PKS and also served on the board of H+, with two other senior Hirslanden management members also serving on the board of PKS. Through these memberships and involvement Hirslanden plays an active role in shaping the Swiss hospital industry as well as associated legislation and regulation.

UAE

There are no relevant industry associations in existence in the UAE.

Engineering associations SOUTHERN AFRICA

Mediclinic Southern Africa, through the South African Federation of Hospital Engineering (“SAFHE”) and Clinical Engineering Association of South Africa (“CEASA”), has successfully completed its third round of training delegates from East Africa. Representatives from Burundi, Kenya, Rwanda, Tanzania and two from Uganda completed the 2013 session. Mediclinic is well represented in these associations, with the roles of previous President of SAFHE, Chairman of the SAFHE branch in the


Central region and Secretary of the CEASA being fulfilled by Mediclinic management. SAFHE and CEASA are recognised as voluntary associations with the Engineering Council of South Africa.

SWITZERLAND

Hirslanden regularly engages with IHS (Ingenieur Hospital Schweiz), the Swiss Association for Hospital Engineering; SWKI (Schweizerische Verein von Gebäudetechnik-Ingenieuren), the Swiss Society of Building Technology Engineers; Electrosuisse, a professional organisation for electrical, energy and information technology; as well as SIA (Schweizerischer Ingenieur- und Architektenverein), the Swiss Engineering and Architecture Association, on matters such as policy and requirements relating to construction (buildings, heating, ventilation, cooling, etc.) with which Hirslanden complies.

INVESTORS Mediclinic’s primary objective is to create value for our shareholders as the owners and providers of equity capital to the business. We are accountable to our stakeholders and reporting to our shareholders and the public is aimed at providing a clear understanding of the Company’s financial, economic, social and environmental performance, both positive and negative. Firm protocols are in place to control the nature, extent and frequency of communication with the investment community, and to ensure that shareholder information is made available to all parties timeously and simultaneously. The Group interacts openly on regulatory and other key topical matters with its shareholders at its annual general meeting. Shareholders with significant interests in the Company that are represented on the Company’s Board of Directors are Remgro holding a 43.4% equity interest and the Company’s black partners, MP1 Investment Holdings (previously named Circle Capital Ventures) and Phodiso Holdings, holding a 2.83% and 4.76% equity interest respectively. The Company further interacts with investment funds and analysts through the year-end and interim results webcast presentations, where access to operational management is provided, as well as through regular one-on-one sessions (about 30 per year) and visits by this community to the Group’s operations.

The most recent and historical financial and other information is published on the Company’s website at www.mediclinic.com.

COMMUNITY Mediclinic is committed to close, enduring and long-term relations with communities and follows a policy based on mutual understanding, trust and reliability. For more information on the Group’s engagement with the community, please refer to the section in this report dealing with our community involvement through our corporate social investment initiatives (investing in the community).

MEDIAThe media play an important role in the Group’s engagement with all our stakeholders. We interact with the media through a range of platforms, including press releases and interviews on company and industry developments.

SOUTHERN AFRICA

Mediclinic Southern Africa continues to actively engage with the media about different aspects of its business including financial results, corporate social investment projects, medical innovations and developments in the country’s NHI strategy and other healthcare-related issues.

According to independent analysis, Mediclinic’s share of voice (topics that are covered in the media where the original source is Mediclinic) has continued to strengthen in the public domain, especially as a result of a strategy of thought leadership, which includes consciously engaging with the media around issues facing the healthcare industry.

Our media engagement is supported by a blog site entitled ‘The Future of Healthcare’, which is an integral part of the social media strategy. It was developed to house the background, media statements and other material pertaining to the NHI and other healthcare-related issues. It also serves to inform the media of innovative treatments and procedures taking place at our hospitals.


Mediclinic Southern Africa, with communications consultants Stone, won an award at the Public Relations Institute of South Africa’s PRISM Awards 2013 for the unique opportunity digital media, particularly The Future of Healthcare blog, presented in managing its reputation as a trusted South African private healthcare provider by demystifying the misconceptions, specifically issues related to excessive pricing and the sensible deployment of the NHI.

SWITZERLAND

In Hirslanden a range of active media events were held during the year. Hirslanden responded to 209 media enquiries and released 54 media releases. A media ticketing system was introduced at group level to assist with the management and organising of media contacts and media enquiries.

UAE

Mediclinic Middle East regularly engages with all types of media through its dedicated Public Relations department. During the period under review Mediclinic Middle East, its facilities or doctors participated in 73 interviews, 59 features and eight press releases.

QuaLitY oF care anD FaciLitiesMediclinic is committed to quality care and aspires to be regarded as the most respected and trusted provider of hospital services by patients, doctors and funders of healthcare. Its focus on quality healthcare extends from the skills of supporting doctors to the care of patients, from the empathy of its nursing staff to the high standards of its facilities, from the meticulous maintenance of world-class technology to upholding the fairest possible tariff. By focusing on a patient-centred team approach to improve quality and safety of care, the Group has established a culture of quality that permeates every aspect of the business and encourages the Group’s employees and associated doctors to continuously strive to improve patient care and patient safety. The Group’s dedication to excellence in healthcare is evidenced by the quality of its facilities.

Our business is about the health of our patients and improving their quality of life. The health and safety of our patients therefore form the core of our business. Various regulations, voluntary initiatives and internal procedures exist that govern the standards of our services and facilities to ensure the health and safety of our patients. During the reporting period there were no material incidents of non-compliance with such regulations, initiatives and procedures.

CLINICAL QUALITYThe Group approaches clinical quality by focusing on structures, processes and outcomes of care. Superior clinical outcomes (or end results) can only be achieved through infrastructure of the highest standard and care processes that are sophisticated, reliable and free of errors. For details on the Group’s clinical quality initiatives please refer to the clinical services report included in the integrated annual report.

QUALITY OF FACILITIES AND EQUIPMENTThe Group strives to provide the best healthcare facilities and technology affordable and available in the different countries in which it operates. Our maintenance systems are risk orientated, aimed at patient safety and ensure the provision of service excellence that is respected and relied upon. The planned maintenance systems and related procedures are constantly being evaluated to ensure that patient safety is paramount.

The Group’s buildings, plant and equipment have to be maximised through reliable technical support in order to ensure a safe and user-friendly environment for staff and clients. With this in mind, and as further dealt with in the Operational Reviews of the three operating platforms included in the integrated annual report, the Group continuously invest in capital projects and new equipment to expand and refurbish its facilities and on the replacement of existing equipment, as well as on the repair and maintenance of property and equipment, as set out in Figure 7 to Figure 9.


SOUTHERN AFRICA

Mediclinic Southern Africa’s planned maintenance system applies to three categories of equipment with varying degrees of maintenance requirements, from maintenance by our technical staff in accordance with internal policies to maintenance by an agent to the manufacturer’s specifications.

The implementation of the Enterprise Asset Management System (“EAMS”), which monitors and plans the life cycle of assets by electronic means, throughout the group has been completed and a new phase was introduced to audit data and verification processes, which is currently being refined.

Mediclinic Southern Africa’s facilities are also subjected to a comprehensive maintenance audit on an annual basis that covers three categories of plant and equipment as well as the aesthetics of the facilities. The average overall score achieved during the period under review was 82.6% (2012: 80.5%). The outcome of these audits has been reviewed to be more critical of facilities and put more emphasis on risk management. We foresee that the result of this review is possibly going to reduce the scores in the new year.

FiGure 7: INVESTMENT IN CAPITAL PROJECTS AND NEW EQUIPMENT (R’M)

FiGure 8: INVESTMENT IN REPLACEMENT OF EQUIPMENT (R’M)

Southern Africa

Switzerland

UAE

Southern Africa

Switzerland

UAE

2009/10 2009/102010/11 2010/112011/12 2011/122012/13 2012/13

13

36

20

25

45

26

26

62

318

424

323

413

498

312

456

741

315 194224 230 249

222293

445

FiGure 9: ExPENDITURE ON REPAIRS AND MAINTENANCE OF PROPERTY AND EQUIPMENT (R’M)

Southern Africa

Switzerland

UAE

2009/10 2010/11 2011/12 2012/13

2831

35

222232

292

210236

274

43

317

274


SWITZERLAND

As part of the strategic positioning of Hirslanden as provider of premium quality services, the group continuously invests in medical and technical infrastructure. By using the latest technologies, Hirslanden directs its focus on superior clinical outcomes and cost-efficiency of services.

Although each hospital has a local Engineering Services team that is responsible for technical items and maintenance works, the central department ensures that common technical standards are applied; monitors compliance with regulations regarding, inter alia, safety and environment; ensures that new regulatory requirements are implemented; and facilitates knowledge transfer within the group. Especially larger projects are jointly handled with the centralised investment and maintenance team at the Hirslanden head office.

A computer-aided facility management (CAFM) system is used in terms whereof all infrastructure (medical technology, building technology and cleaning) governed by statutory regulations and maintenance management measures are entered in the CAFM, interfacing with the SAP ERP (Enterprise Resource Planning). The uniform equipment management system forms the basis of optimal maintenance management for the individual hospitals and the whole group. The maintenance process was tested and optimised in a pilot project at one of the Hirslanden hospitals during the period under review and rolled out to the rest of the group’s hospitals.

Hirslanden attaches particular importance to quality management and is committed to the total quality management approach according to the European Foundation for Quality Management (“EFQM”), as further detailed in the clinical services report included in the integrated annual report.

Hirslanden’s head office and all 14 hospitals are ISO 9000:2008 certified. The ISO certification supports the hospitals’ continual improvements in process quality and services provided in all areas, above all in nursing and medical technology.

UAE

Mediclinic Middle East follows the same planned maintenance system as Mediclinic Southern Africa. Comprehensive facility management and equipment maintenance programmes are adhered to, while performance audits are conducted regularly to measure matters such as set performance and equipment breakdown monitoring of high-risk equipment installed in critical areas. Checklists are in place to ensure compliance with these policies. Mediclinic Middle East subscribes to the ECRI Institute’s Health Device Alert system for updates regarding equipment recalls to ensure patient safety for all its facilities.

Periodic performance audits are conducted for fire monitoring systems. The units are monitored 24 hours a day by the Civil Defense department and monitoring of high-risk equipment such as diesel generators are installed in critical areas.

Mediclinic Welcare Hospital follows the ECRI Institute’s IPM (Internal Preventive Maintenance) Module for our medical equipment preventative maintenance programme. It undertakes routine rounds to critical care areas, maintains a daily report checklist and holds a weekly feedback meeting with end-user departments to improve equipment performance and uptime. Ongoing KPI and QA programmes are being conducted to monitor equipment uptime and to ensure quantitative and qualitative performance. The KPI programme was undertaken to monitor the uptime of critical care equipment and Mediclinic Welcare Hospital attains 99% uptime.

Mediclinic City Hospital utilises a reputable software programme coupled with a year planner in order to maintain all the equipment according to the policies set up by the Maintenance Synergies Committee. Maintenance rounds and checklists ensure that all equipment is inspected and serviced at regular intervals, as required by the DHCC and JCI.

Mediclinic Dubai Mall follows an Internal Preventive Maintenance programme based on the equipment manufacturer’s guidelines. They also maintain all equipment according to the policies set up by the


Maintenance Synergies Committee. Maintenance rounds and checklists ensure that all equipment is inspected and serviced at regular intervals, in harmony with the DHA and JCI guidelines.

PATIENT SATISFACTIONAs mentioned under the section dealing with our patient engagement, the well-being of our patients forms the cornerstone of the Group’s business, hence our commitment to deliver excellent patient care focusing on the needs and satisfaction levels of our patients. The Group continuously measures patient satisfaction through ongoing satisfaction surveys at each of its hospitals and clinics to identify potential focus areas for improvement in order to ensure the continuous delivery of a quality service. The results are reviewed daily, reported on monthly and serve as a tool to improve service delivery. The overall patient satisfaction levels of the Group’s operating platforms are included in Figure 3.

The operating platforms have developed internal key performance indicator systems measuring not only the financial performance of their hospitals, but also including, inter alia, patient satisfaction as an indicator.

Mediclinic Southern Africa has expanded the scope of its patient survey to include 14 new questions covering clinical care and outcomes. As reported earlier in this report, the group’s Patient Journey programme is gaining momentum with the first projects aimed at improving the patient experience at our hospitals under way.

The roll-out of Hirslanden’s Customer Relationship Management (CRM) system commenced in April 2012 and is ongoing. The system is used to manage all customer feedback, customer needs and other guest relations relevant information, and the data of all employed doctors. The CRM system supports the network marketing project referred to earlier under our engagement with doctors, the Hirslanden Privé project and delivers some customer relations relevant parameters for the clinic management function. The system is continuously being improved and the addition of event and campaign management and iPad integration is planned for the year ahead.


BroaD-BaseD BLacK econoMic eMpowerMent** As BBBEE is unique to South Africa, this section focuses

only on the Group’s BBBEE initiatives in South Africa.

The Board views the Group’s South African business as an integral part of the political, social and economic community in South Africa and is committed to sustainable transformation as part of its business strategy. Enhancing the group’s current broad-based black economic empowerment (“BBBEE”) initiatives is a priority for Mediclinic Southern Africa and the group regularly reviews its BBBEE strategy with the aim of effecting improvements across all seven pillars of the BBBEE scorecard. Mediclinic Southern Africa’s Transformation Committee meets regularly to monitor the group’s performance, with feedback to Mediclinic Southern Africa’s Executive Committee, ensuring appropriate focus is placed on the group’s commitment to the development and implementation of sustainable BBBEE initiatives.

Mediclinic Southern Africa is assessed annually by an accredited verification agency against the generic scorecard criteria set by the Department

of Trade and Industry (“DTI”), the results of which are set out in Figure 10. This assessment (which is based on the information as at the time of the assessment) indicates that the group’s score has decreased to 71.97 (2012: 75.27). Mediclinic Southern Africa is therefore a Level 4 contributor (a Level 1 contributor has a total of 100+ points and a Level 8 contributor has less than 40 points). The reduction in the score achieved during the year is mainly attributed to the stricter procurement targets set and new initiatives are to be identified to regain and exceed the previous levels going forward. Our scorecard still reflects our commitment to promoting BBBEE with regard to procurement, ownership, socio-economic development and enterprise development. A copy of the scorecard is published on the website of Mediclinic Southern Africa (www.mediclinic.co.za).

We are committed to actively supporting the Black Management Forum’s activities that relate to the development of black managers. To this end we have pledged to sponsor one of their sessions annually.

FiGure 10: BBBEE SCORECARDeLeMent inDicator weiGhtinG score

2010 2011 2012 2013Year-on-year performance

equity ownership Percentage share of economic benefits 20 16.55 19.21 18.43 20.66 á

Management control Percentage black persons in executive management and/or executive board and board committees 10 5.11 5.76 6.25 6.20 â

employment equity Weighted employment equity analysis 15 2.12 1.98 2.08 1.84 â

skills development Skills development expenditure as a proportion of total payroll 15 12.00 11.55 12.00 12.00 –

preferential procurement Procurement from black-owned and empowered enterprises as a proportion of total assets 20 15.60 16.71 16.51 11.27 â

enterprise development Average value of enterprise development contributions as a percentage of the target of 3% of net profit after tax 15 15.00 15.00 15.00 15.00 –

socio-economic development

Corporate social investment for the benefit of black persons 5 5.00 5.00 5.00 5.00 –

totaL points 100 71.38 75.21 75.27 71.97 â

contributor level 4 3 3 4 â


EQUITY OWNERSHIPMediclinic implemented a R1.1bn black ownership initiative in 2005, which had the effect of introducing 15% black shareholding in Mediclinic. The black ownership initiative introduced Phodiso Holdings Limited (“Phodiso”) and MP1 Investment Holdings (previously named Circle Capital Ventures) (“Circle Capital”), a subsidiary of the Circle Group, as the Group’s strategic black partners and shareholders in Mediclinic through two special purpose vehicle companies, Mpilo Investment Holdings 2 (RF) (Pty) Ltd (“Mpilo 2”) and Mpilo Investment Holdings 1 (RF) (Pty) Ltd (“Mpilo 1”). Following this initiative, Mediclinic’s strategic black partners jointly held approximately 11%, with Phodiso, through Mpilo 2, holding approximately 6.87% (currently 4.76%), and Circle Capital, through Mpilo 1, holding approximately 4.12% (currently 2.83%) of the issued shares. All employees up to and including first line management level were also introduced as shareholders of the Company through the issue of Mediclinic shares to the Mpilo trusts, two employee share trusts formed in South Africa and Namibia specifically for that purpose. The trusts subscribed for approximately 4% (1.68% at year end) of Mediclinic’s issued shares held for the benefit of almost 11 000 participating employees (of whom 52% were black and 89% women) at the time, which include, inter alia, nursing staff, support staff and administrative staff.

During the year, Phodiso successfully refinanced the existing external preference share financing obligations to third-party funders within the Mpilo 2 special purpose vehicle debt with commercial funders on acceptable terms to Mediclinic and at the same time agreed to an extension of the lock-in period applicable to its shareholding in Mediclinic until the end of 2018. This refinancing and extension of the lock-in period allowed Phodiso to receive the proceeds from the sale of the nil-paid letters of allocation that were issued to Mpilo 2 as part of the R5 billion rights offer concluded by Mediclinic in October 2012.

By applying the specific rules of the DTI’s BBBEE Codes of Good Practice in respect of multinationals, Mediclinic meets the Codes’ targets of 25% exercisable voting rights in the hands of black people and 25% economic interest of black people for purposes of calculating Mediclinic’s ownership scorecard with reference to the Group’s South African operations.

MANAGEMENT CONTROLMediclinic’s strategic black partner, Phodiso, is well represented within the management structures of Mediclinic. Two of Phodiso’s directors are involved in key positions within the Group: Dr Nkaki Matlala is the Executive: Government and Industry Affairs and board member of Mediclinic Southern Africa; and Dr Kabs Makaba is a board member of Mediclinic. Dr Mamphela Ramphele, previously a director of Circle Capital, served as a board member of Mediclinic until July 2012.

EMPLOYMENT EQUITY Mediclinic Southern Africa’s focus on employment equity is in line with the group’s overall transformation objectives. Various policies governing diversity and equal opportunities are in place and we have a specific employment equity policy to manage the requirements of the relevant labour laws. Mediclinic Southern Africa’s Transformation Manager is responsible for diversity and employment equity management throughout the group. In support of the group’s employment equity plans, the group has, inter alia, held diversity workshops for senior management, which were extended to employees at all facilities throughout the group. Further follow-up workshops were held with management during the year. To ensure commitment to employment equity by all managers in the organisation, the reaching of employment equity goals is included as one of the performance indicators for purposes of the management incentive scheme.


Reaching our employment equity goals remains a challenge as the geographical location of some hospitals contributes to the low attraction of designated candidates. In certain disciplines such as nursing and technical, a shortage of skilled personnel is experienced, which impacts operational efficiency. The specialised nature of some positions further makes it difficult to be left vacant for long periods in the search for designated candidates. The competitive salary market further makes it difficult to attract candidates from designated groups and the principle of internal equity remains an important aspect of the company’s remuneration policy.

The new targets set by the DTI, with effect from 2012, relating to employment equity have increased the group’s challenges in this regard. Mediclinic Southern Africa has set new employment equity goals up to 2017, with the 2012 calendar year’s targets included in Figure 11, which have been approved by the Department of Labour. The updated goals form part of a new five-year Employment Equity Plan that has been approved by the group’s Employment Equity Committee. The Employment Equity Committees at regional and hospital level are in the process of reviewing their goals in order to align it with the group’s goals.

The summarised employment equity report (EEA2) (Figure 11), as submitted to the Department of Labour in October 2012, is published here as required in terms of section 22 of the Employment Equity Act. The current workforce profile shows a steady improvement in the amount of equity candidates appointed to the skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents category. Black representation at management level has increased year on year from 11% in 2006 to 22% at year end. This level, however, still presents a challenge to the group, with low staff turnover remaining a limiting factor. Of all senior appointments (level C5 and above) made during the period under review, 45.4% (2012: 47.7%) were from the designated groups, against the set target of 40% for the year. The overall racial distribution of Mediclinic Southern Africa’s full-time employees is set out in Figure 12.

SKILLS DEVELOPMENTTraining and skills development is a key priority in support of our stated commitment to quality care, which is reflected in the number of learning initiatives undertaken each year. During the past year Mediclinic Southern Africa recorded 36 274

FiGure 11: MEDICLINIC SOUTHERN AFRICA’S SUMMARISED EMPLOYMENT EQUITY REPORT AND TARGETS (2012 calender year) (submitted in October 2012 to the Department of Labour)

Male FemaleForeign

nationals totalafrican

colouredindian white

africancoloured

indian whiteoccupational levels Target actual Target actual Male FemaleTop management 2 2 12 0 0 0 0 0 14Senior management 2 2 19 0 0 2 0 0 23Professionally qualified and experienced specialists and mid-management 52 46 170 72 71 246 1 3 537Skilled technical and academically qualified workers, junior management, supervisors, foremen and superintendents 265 263 179 1 786 1 875 2 596 58 93 5 064Semi-skilled and discretionary decision-making 874 886 130 4 376 4 462 1 438 1 15 6 932Unskilled and defined decision-making 216 198 19 437 407 13 0 0 637totaL perManent 1 397 529 6 815 4 295 60 111 13 207Temporary employees 11 8 9 30 6 20 84

GranD totaL 1 408 537 6 824 4 325 66 131 13 291

Exceeded target Met target Did not achieve target


(2012: 35 320) structured learning interventions, many of which involved skills assessments (refer to Figure 24). Of the recipients of these learning interventions 65.8% were equity candidates and 89.6% female employees. The group continues to invest about 4% of payroll annually in support of its commitment to training and skills development. To improve the representation of designated groups on management levels, the group’s management development programmes include various functional disciplines and aims to increase the management talent pools. See the section of this report relating to Mediclinic’s training and development initiatives for more details.

PREFERENTIAL PROCUREMENTMediclinic Southern Africa uses the BBBEE status of a supplier in the selection process. The reduction in the score achieved during the year is mainly attributed to the stricter targets set and new initiatives are to be identified to regain and exceed the previous levels going forward. The improvement of the preferential procurement score remains a focus area for Mediclinic Southern Africa, and functionality to accurately monitor and manage procurement in the QSE (Qualifying Small Enterprises), EME (Exempted Micro-Enterprises) and black-owned categories has been included in the development of an ERP system currently being implemented.

ENTERPRISE DEVELOPMENTIn terms of Mediclinic Southern Africa’s contributions towards this element, it achieved the target of 3% of net profit after tax. This was achieved largely through the favourable terms of loans to Mediclinic’s two strategic black partners, Phodiso and Circle Capital, and the Mpilo trusts. The loans enabled these entities’ acquisition of equity in Mediclinic.

SOCIO-ECONOMIC DEVELOPMENTThe success of the group’s Corporate Social Investment (“CSI”) strategy and initiatives is reflected in the group scoring full marks for this

element in the BBBEE scorecard. Our CSI projects are also aimed towards broad-based transformation, with the vast majority of the beneficiaries being black. Further details on our CSI initiatives can be found in the section of this report dealing with our community involvement.

econoMic iMpactsMediclinic, like other organisations, has many economic impacts on our stakeholders through, amongst other things, the generation and distribution of value, the creation of employment opportunities, remunerating our employees fairly and competitively, and our corporate social investment. We continuously manage these and engage with our stakeholders on matters relevant to them, as reported elsewhere in this report.

ACCESS TO AND AFFORDABILITY OF HEALTHCAREIn the healthcare industry we are faced with the worldwide challenge of access to and affordability of healthcare, which affects each and every member of society. Providing proper access to healthcare is a challenge facing all governments, even more so in developing countries such as South Africa. In order to reach a sustainable solution, the focus on access to and affordability of healthcare cannot be done without the necessary focus on maintaining the highest standard in quality of patient care and providing an adequate return to our capital providers. We contribute in various ways towards a sustainable healthcare system with improved access to and affordability of healthcare by, inter alia, continuously focusing on ways in which we can improve our cost-effectiveness, conducting tariff negotiations in a fair and transparent manner, expanding our facilities based on need, pursuing joint initiatives with the government, such as public private partnerships, and actively participating in healthcare reform.

South Africa is a developing country with a significantly skewed income distribution. Consequently, a key challenge for any health

FiGure 12: MEDICLINIC SOUTHERN AFRICA: RACE DISTRIBUTION

AFRICAN, COLOURED, INDIAN

64% (2012: 63%)

WHITE

36% (2012: 37%)


service provider is to maintain the provision of high-quality healthcare that is also affordable. Mediclinic Southern Africa continuously strives to promote access to quality of healthcare by identifying innovative ways to make healthcare more affordable within the South African context.

In recognising considerations of affordability of private healthcare, Mediclinic Southern Africa introduced a tariff strategy for certain day procedures. In the last year, Mediclinic Southern Africa identified even more day-case type procedures which are treated at a lower price to funders. Mediclinic Southern Africa has a predilection towards tertiary/acute care hospital services and all procedures currently conducted in Mediclinic Southern Africa’s acute care hospitals are priced according to the costs experienced in equipping the theatres and staffing the units. The quality of patient care that is attainable and provided within an acute care hospital setting offers a superior level of patient safety to that traditionally offered in a day clinic setting. However, Mediclinic Southern Africa recognises that healthcare finances sustain continued pressure and that it is realistic to make allowance for the efficiencies that arise due to the lower risk associated with these lower intensity cases.

EFFICIENCY AND COST-EFFECTIVENESS The Group continuously identifies and evaluates areas for operational improvement. Such efficiency gains are passed on to our patients and funders with a view to increasing the affordability of healthcare. In this regard, our ongoing research focuses on benchmarking hospital efficiencies internationally.

To improve our cost-effectiveness we are continuously investigating and implementing new cost-saving efficiencies to reduce our input costs and therefore ultimately our tariff inflation, such as our international procurement initiative, as reported in the section of this report dealing with our engagement with our suppliers. As reported in the section of this report dealing with our engagement with healthcare funders, our tariff negotiations are conducted in a fair and transparent manner.

A decision was taken to standardise on a single IT solution for the Group’s back-office functions and significant savings were achieved by negotiating a global contract with the vendor. This solution was successfully implemented in Mediclinic Middle East, while Mediclinic Southern Africa will start the roll-out early in the new financial year and Hirslanden, that is already using the solution, will focus on standardisation at platform level.

SOUTHERN AFRICA

Mediclinic Southern Africa is currently assessing hospital efficiency with a view to developing a robust approach for identifying top performing hospitals and factors that adversely impact efficiency in healthcare delivery. This will aid the replication and scaling of ‘efficient practices’ within the group and the management of areas of inefficiency. This work is ongoing and it is hoped that the results of this project, including the tools developed through this project, will provide additional guidance on how Mediclinic Southern Africa can improve efficiency in service delivery and pass such gains to patients in the form of greater affordability of care.

Mediclinic Southern Africa is also working towards a closer partnership with our associated doctors through initiatives such as improved connectivity. The objective is to streamline the production of healthcare in our facilities, minimise waste and to jointly identify new opportunities for increased efficiency. We are also working towards a more integrated approach to healthcare delivery, based on our experience in Dubai.

SWITZERLAND

Although all Swiss residents have comprehensive mandatory healthcare insurance, Hirslanden is committed to cost-efficiency in healthcare by way of supporting market-orientated initiatives and reforms to reduce the increase in healthcare insurance premiums.

One of the initiatives to improve efficiency included the testing of an integrated hospital information system at one of the Hirslanden hospitals with


the aim to integrate all (direct and indirect) near-patient processes, from admission to invoicing. The roll-out of this system to the rest of the group is planned.

UAE

With the successful implementation of the Hospital Information System (“HIS”) at Mediclinic Welcare Hospital, Mediclinic Middle East has made a significant step towards the improvement in efficiency and cost-effectiveness in the group. The electronic integration of all business units facilitates group-wide data collection and standardisation of reports, which will assist in clinical and financial decision-making. It has also allowed the implementation of e-claims throughout the group, as well as the unification of patient medical records, which has benefited both administrative efficiency and customer service.

The One EMR (Electronic Medical Record) solution was also implemented in all units, which means that all patient records are now centralised under a single record, regardless of the unit in which treatment was given.

The Federal Ministry of Health regulates the profit margins on local registered medication by centrally controlling the cost price and selling price of medication. In Dubai, in an effort to streamline the supply of medical materials, Mediclinic Middle East has successfully registered and opened a new central medical store. This serves as a central logistics platform for the operational units and supplies them with their daily medical material and medication needs. The centralised store realises efficiencies and savings in overall inventory, staffing and processes related to the supply chain in Dubai. The medical store has commenced with and will further explore import opportunities and medical agencies for the Middle East operations.

HEALTHCARE REFORM SOUTHERN AFRICA

The South African health sector landscape remains poised for changes in the future. The Department of Health (“DoH”) has initiated the piloting of National Health Insurance (“NHI”) in 10 health districts. It is

expected that a revised policy paper on the NHI will be published later in 2013. Mediclinic Southern Africa supports initiatives to promote sustainability, affordability and greater access to quality healthcare within the health system. Consequently, Mediclinic Southern Africa has continued to engage with policy and regulatory issues, on multiple fronts, to ensure that eventual legislation will support the achievement of these goals. Mediclinic Southern Africa has also initiated, either on its own or through the Hospital Association of South Africa (HASA), various research projects that introduce reliable and important policy relevant contextual information. For example, an assessment of the drivers of medical scheme expenditure on private hospitals was commissioned by HASA and conducted by Econex, an economics consulting firm.

Although the outcome of the intended market inquiry by the Competition Commission into the private healthcare sector, as referred to earlier, is unknown, it could include recommendations for further healthcare regulation. Mediclinic is engaging with the Commission’s representatives on the draft Terms of Reference and the envisaged process.

SWITZERLAND

The revision of the Federal Health Insurance Act, which came into force on 1 January 2012, changed important aspects of hospital planning and financing in Switzerland. The most prominent of these changes was the introduction of a new reimbursement system for inpatient services covered by the mandatory health insurance. The new system is based on so-called Diagnostic Related Groups (DRG) used to classify treatments and to assign a cost and reimbursement weighting. The application of the new system has led to some delays regarding the billing of inpatient services, but has not led to any serious disruptions or a breakdown of the administrative processes. Equally, any concerns about a negative impact on service quality have so far been proved to be unfounded, with regard to Hirslanden as well as the Swiss hospital sector in general.

Another important change was the modification of the fundamental hospital financing rules. One crucial element is a change of the way


governmental investment subsidies are allocated. While in the past these subsidies were allocated to the hospital, the revised Federal Health Insurance Act subsidies are allocated per patient case. In practice this is done by adding an investment allowance to the DRG-based reimbursement. From a financial perspective, even more important than the investment subsidies are the cantonal contributions to the DRG-based reimbursement. The cantonal share of that reimbursement is fixed at 55% (to be implemented by 2017), yet only listed hospitals are eligible for this cantonal contribution. As part of the cantonal autonomy within the Swiss federal system, each canton may determine, according to a process defined by the cantons themselves, which hospitals are placed on the cantonal list and which not. A problematic aspect of this arrangement is the fact that the cantons own and operate hospitals. So, instead of being in the role of a neutral administrator of the listing system, the cantons face a conflict of interests due to their role as hospital owners and operators. Moreover, the cantons have the legislative authority over the implementation of the Federal Health Insurance Act on the cantonal level. This means they also pass laws and regulations on the requirements hospitals have to comply with.

UAE

We expect far-reaching developments in the Dubai healthcare sector within the next few years. At this stage the proposed reform is driven mostly by the Dubai Health Authority and we depend on the results of their studies to provide further clarity on proposed regulatory reform and timelines. We certainly expect Mediclinic Middle East to benefit from the proposed changes which include greater focus on medical regulations and tariff structure, as well as the introduction of mandatory health insurance for all residents. Mediclinic Middle East will continue to be an active participant in these initiatives.

PUBLIC PRIVATE INITIATIVES The Group believes that public private initiatives with government may play a meaningful role in increasing access to affordable quality healthcare services. It also believes that such initiatives would involve the private hospital sector’s core competencies, namely the delivery of quality healthcare and management services. It continues to look for meaningful opportunities for participation. Some examples of successful joint initiatives are included below.

SOUTHERN AFRICA

Western Cape Department of HealthA partnership agreement has been implemented with the Western Cape Department of Health in terms of which Mediclinic Southern Africa assists the department in training Operating Room Practitioners, as reported in the section of this report relating to training and skills development.

Wits Donald Gordon Medical Centre One of our more established partnerships is with the Wits Donald Gordon Medical Centre (“WDGMC”), in which the group holds a 49.9% equity interest. This significant partnership with the public sector is designed to support the training of specialists and sub-specialists for both public and private sectors, and to make the best clinical staff available to the Johannesburg academic hospitals. The academic programme of the hospital is functioning well and the hospital currently supports the training of five registrars and 17 sub-specialists. The management services by Mediclinic Southern Africa have added significant value to the operations of the hospital with improved occupancy levels. The hospital focuses on specialised services and the transplant programme, Colorectal Unit, Hepatobiliary Unit, Women’s Health Unit, Intensive Care Unit, Geriatric Unit, Endovascular Unit and Oncology Unit can be described as centres of excellence.


Public Health Enhancement FundIn November 2012, the Minister of Health announced a social compact for health improvement entered into between Mediclinic together with other leading private sector healthcare companies and the National Department of Health. The social compact led to the establishment of the Public Health Enhancement Fund (PHEF), which has raised R40m for 2013. R20m has been approved to provide bursaries to 100 undergraduate medical students for the year 2013. A further R10m is earmarked to support master’s and PhD studies and the balance to support the Academy for Health Leadership and Management in Health. The PHEF is a non-profit organisation that has committed to investing a fixed annual sum over a fixed-term period to develop and strengthen South Africa’s healthcare system. Mediclinic Southern Africa has committed to contributing 0.75% of its net profit after tax to this fund annually.

SWITZERLAND

Männedorf HospitalHirslanden is planning to equip and operate a radiotherapy centre to the value of CHF13m at the cantonal hospital in Männedorf. The opening of the centre is planned for the start of 2014. The radiotherapy centre at Männedorf Hospital will offer a comprehensive radiation treatment. The linear accelerator will enable tumours to be treated in outpatient treatment sessions.

University hospital of ZurichThere are two partnerships with the university hospital of Zurich. The first is the Intrabeam System, which allows intra-operative radiation in the case of breast cancer treatment. The system is used by the breast cancer centre of Hirslanden in Zurich and the Department of Gynaecology at the university hospital. The second is a fast-cut laboratory run by the Department of Pathology of the university hospital, which was opened at Klinik Hirslanden in 2009, providing a fast diagnostic procedure in the case of fast cuts in the operating theatre.

UAE

Medical tourismMediclinic Middle East is supporting Dubai Health Authority (“DHA”) and Dubai Healthcare City (“DHCC”) in its initiative to promote Dubai as a hub for medical tourism. Senior management from Mediclinic Middle East travelled to Moscow in March 2013, with representatives from the DHA and DHCC to take part in the launch of this initiative at a medical tourism conference targeted at the Russian market.

Dubai Health AuthorityMediclinic Middle East is working with the Dubai Health Authority with the mandate to lead on the implementation of electronic billing for all Dubai healthcare providers, as referred to earlier in this report.

Government hospitalsMediclinic Welcare Hospital has entered into agreements with Latifa Hospital and Rashid Hospital to admit patients from these government hospitals when their facilities are filled to capacity. Mediclinic Welcare Hospital is also part of the UAE disaster plan and is ready to participate when asked by the disaster centre based in Rashid Hospital.

Government taskforcesMembers of the nursing team at Mediclinic Welcare Hospital have been invited to serve on numerous government taskforces such as the Nursing and Midwifery Council (“NMC”) for the UAE which was founded under the patronage of Her Highness Princess Haya; and also participate in the Education Taskforce of the NMC. The Nursing Directorate at Mediclinic City Hospital is involved in the Specialisation Committee and sub-committees of the UAE NMC.


our peopLe EMPLOYEE COMPOSITION AND TURNOVER RATEThe success of Mediclinic is dependent on the commitment of our more than 23 400 employees to deliver quality healthcare. The composition of our employees by employment type, gender and age per each of our operating platforms is illustrated in Figures 1 and 13 to 15.

The number of new employees compared to the number of employees leaving the Group’s employ is included in Figure 16. The overall employee turnover rate, as well as the turnover rate by age group and gender per each of our operating platforms are provided in Figure 17 to Figure 19. The turnover rates are calculated using the number of employees that left the employ during the period under review divided by the total employee numbers at year end. With the increased lack of qualified staff, there is increased competition in the market place for quality staff. In this regard emphasis is placed on retention and employee training. An employee discharge management process is in place to monitor the reasons for staff turnover.

southern aFrica

southern aFrica

FeMaLe

12 266 (82%)

> 50 Years

2 774 (19%)> 50 Years

1 372 (23%)> 50 Years

204 (10%)

FeMaLe

5 117 (79%)FeMaLe

1 180 (58%)MaLe

2 661 (18%)

30 – 50 Years

8 858 (59%)30 – 50 Years

3 491 (58%)30 – 50 Years

1 404 (69%)< 30 Years

3 295 (22%)< 30 Years

1 121 (19%)< 30 Years

432 (21%)

MaLe

1 391 (21%)MaLe

860 (42%)

switzerLanD

switzerLanD*

uae

uae

FiGure 14: WORKFORCE COMPOSITION PER GENDER DISTRIBUTION

FiGure 15: WORKFORCE COMPOSITION PER AGE DISTRIBUTION

* The age distribution of the Hirslanden employees excludes the employees of Klinik Stephanshorn and AndreasKlinik Cham Zug, where this information is not accurately recorded.

southern aFrica

perManent

14 679 (98%)non-perManent

248 (2%)

switzerLanD

perManent

6 508 (100%)

uae

perManent

2 040 (100%)

FiGure 13: WORKFORCE COMPOSITION PER EMPLOYMENT TYPE


Southern Africa

Switzerland

UAE

FiGure 16: NEW EMPLOYEES VS EMPLOYEES LEAVING FiGure 17: OVERALL EMPLOYEE TURNOVER RATE

SOUTHERN AFRICA

2010/11SWITZERLAND 2011/12UAE 2012/13

New employees

Employees leaving

2 6

15

10.3

%

10.6

%

9.8

%

1 4

66

14.5

%

16.0

%

15.1

%

10.7

%

11.1

%

9.5

%

1 2

70

98

2

417

193

> 50 years 30 – 50 years < 30 years

FiGure 18: EMPLOYEE TURNOVER RATE BY AGE

2010/11 2010/11 2010/112011/12 2011/12 2011/122012/13 2012/13 2012/13

11.4

%

19.8

%

19.8

%

11.5

%

20

.6%

20

.6%

10.6

%

20

.6%

11.8

%

11.5

% 14.7

%

14.7

%

12.3

% 16.1

%

16.1

%

11.2

%

15.6

%

8.8

%

9.9

%

9.3

%

5.9

%

9.9

%

9.9

%

5.2

%

11.9

%

11.9

%

4.5

%

southern aFrica switzerLanD* uae

* The employee turnover rate by age of the Hirslanden employees excludes the employees of Klinik Stephanshorn and AndreasKlinik Cham Zug, where this information is not accurately recorded.

Female Male

FiGure 19: EMPLOYEE TURNOVER RATE BY GENDER

2010/11 2010/11 2010/112011/12 2011/12 2011/122012/13 2012/13 2012/13

9.6

%

14.6

%

7.8

%

11.5

%

15.2

%

8.5

%

13.3

%

13.9

%

10.5

%

14.5

%

13.0

%

10.5

%

16.3

%

13.0

%

9.1

%

15.6

%

8.3

% 10.3

%

southern aFrica switzerLanD* uae

* The employee turnover rate by gender of the Hirslanden employees excludes the employees of Klinik Stephanshorn and AndreasKlinik Cham Zug, where this information is not accurately recorded.


LABOUR RELATIONS AND WORKING CONDITIONS The Group believes in creating and maintaining sound labour relations, which supports its goal of being the employer of choice in the healthcare industry. This is measured by regular employee satisfaction surveys and continuous assessment of the Group’s employment conditions. The Group’s policies and procedures are evaluated regularly to ensure that our employees are treated fairly and that they work in a safe environment. The Group continuously strives to ensure that all its employees are informed of their benefits, and this information is communicated to staff via the intranet, staff newsletters and other communication media referred to in the section in this report dealing with our engagement with employees.

Mediclinic Southern Africa’s trade union membership declined from 15.7% in 2011 to 12.4% at year-end of employees covered by collective bargaining agreements, with no trade union membership by the Hirslanden or Mediclinic Middle East employees. Mediclinic Southern Africa maintains good working relationships with trade unions with which it has recognition agreements. No wage disputes were declared in 2012 and all unions settled on the proposed salary increases, based on the Mediclinic remuneration principles. Such principles support fair and equitable salary increases for all employees in the company. The principles have been extensively consulted with all the unions in the group.

Many hospitals have little or no union representation and an elected workplace forum meets with management on a monthly basis to ensure sound labour relations at hospital level. No strike action was experienced over the past three years at any of the localities where wages are negotiated. Formalised contingency plans are however in place to ensure that minimum disruption takes place at a locality, should a dispute arise and possible strike action occurs.

We strive to create a pleasant working environment by offering, inter alia, family-friendly benefits. Mediclinic Southern Africa and Hirslanden offer flexi-time to certain employee categories; some facilities have childcare facilities and maternity benefits exceed the minimum statutory requirements.

The employee relations policies of the operating platforms – which deals 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 and are also available to all staff to ensure that employees are aware of the avenues to put grievances forward, should they have the need to. Mediclinic Southern Africa communicates its Employee Relations Policy with regular training workshops and monthly online-based facilitation sessions.

The minimum notice periods for significant operational changes, as provided in the employment contracts, are one month in Southern Africa, three months in Switzerland, and in the UAE it is 90 days for doctors, nurses and other clinical staff and managers and 60 days for administrative staff.

PERFORMANCE MANAGEMENTEmployee performance reviews are conducted throughout the Group. They provide an opportunity for both employee and employer to identify areas for improvement and training needs, recognising good performance and promoting opportunities for career development, and contributing to a contented workforce. It is a process which facilitates the alignment of company goals and objectives to individual outputs and provides all employees with an opportunity to identify their training and development needs. In Hirslanden and Mediclinic Middle East 100% of employees received formal performance reviews during the year, with 95.4% of Mediclinic Southern Africa employees receiving formal performance reviews.


Mediclinic Southern Africa plans to further enhance the process during the year ahead through training of existing and new line managers on effective communication, conducting career conversations and performance coaching techniques.

EMPLOYEE RECRUITMENT, RETENTION AND REMUNERATIONTogether with the Group’s retention and training strategies, the recruitment of the right calibre of personnel is vital to deliver on our commitment to quality. The Group acknowledges that the ability to recruit and retain skilled staff is a critical factor in ensuring the sustainable performance of the Group in the intensely competitive and dynamic business environment in which it operates. Some examples of our initiatives to retain staff include:

• maintaining a pleasant working environment, with leadership that acts with honesty and integrity;

• providing training and development opportunities for both clinical and non-clinical staff;

• following fair management practices;• remunerating employees competitively, offering

family-friendly benefits and incentivising performance through bonus schemes; and

• communicating with staff and involving them in the day-to-day business decisions.

The Group offers market-related salaries and benefits to our employees, based on the principles of internal equity, external equity and fairness in accordance with the Group’s Remuneration Policy as dealt with in the remuneration report included in the integrated annual report.

The Group’s operating platforms participate regularly in salary surveys to provide management with a reference for evaluating its current remuneration packages. Remuneration is determined based on the employee’s qualifications, expertise, experience and job level, with no discrimination based on gender or other forms of differentiation. We do not regard minimum wages as determined in the geographic areas of operation as a relevant benchmark, as our employees’ remuneration exceeds these minimum wage requirements.

The Group provides defined contribution plans for the benefit of its Mediclinic Southern Africa employees and defined benefit plans for its Hirslanden employees, the assets of which are held in separate trustee-administered funds and in terms whereof the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The Group’s contribution to these plans is charged to the income statement in the year to which they relate. In Southern Africa the employee contribution ranges from 2.5% to 7.5%, while the employer contribution ranges between 3% and 9%. In Switzerland the employee contribution ranges from 6.5% to 15.5%, while the employer contribution ranges between 9.5% and 15.5%. The retirement benefits of expatriate employees of Mediclinic Middle East in the UAE are limited by federal law to the provision of severance pay calculated according to a specified formula. Employees who are UAE nationals are entitled to enrol in the national pension scheme. A total contribution of 20% of the pensionable salary is required for every UAE national employed in the company, with the employee contributing 5%, the employer 12.5% and government 2.5%.


Employee benefits and the value they add to the overall employment proposition are key factors in attracting and retaining high-calibre staff. Details of benefits offered to our permanent employees per operating platform are included in Figure 20. Various other benefits are offered throughout the Group, such as uniform subsidies, loans, administrative assistance with housing and vehicle financing and insurance, and free financial wellness assistance. Hirslanden also offers a family-friendly “home office” benefit in terms whereof certain categories of employees, especially scare resource categories, may perform 20% to 40% of their duties at home.

The return to work retention rate of female employees after maternity leave is 93% for Mediclinic Southern Africa, 77% for Hirslanden and 97.6% for Mediclinic Middle East.

SOUTHERN AFRICA

The recruitment and retention of high-calibre staff, especially in nursing and pharmacy services, remains a constant challenge for Mediclinic Southern Africa. These aspects are assessed according to two human resource indices, namely percentage of positions vacant and net gain/loss in key skilled staff categories. These indices reveal that retention of senior professional nurses and professional nurses continues to be a challenge, with 767 professional nurse positions vacant at year end. Similarly, 16 pharmacist positions were vacant at year end. Figure 21 illustrates the vacancy status of critical staff categories as at year end.

FiGure 21: VACANCY STATUS OF CRITICAL STAFF CATEGORIES

% VacantSenior professional nurses 17%

Professional nurses 23%

Enrolled nurses 25%

Pharmacists 10%

The vacancy status of pharmacists in particular has fluctuated during the past 12 months, with inflows of candidates who recently completed community service balancing the loss of more experienced candidates during the year. This pattern has now been experienced for two years as the focused initiative to attract completed community service candidates draws talent seeking private healthcare experience at the beginning of each new calendar year.

Skills shortages remain a challenge throughout Mediclinic Southern Africa. Our Human Capital Management Strategy strives to ensure that Mediclinic Southern Africa will have the ability to be responsive to the talent challenges that the industry faces, and it defines and commits priority resources to very specific deliverables in eight main human capital management processes. A few initiatives within the group to address the general skills shortage in our recruitment, retention and training initiatives are provided below:

• The corporate recruitment department supports the business in the recruitment of talent in the critical occupational categories, supported by an e-Recruitment application.

• Biannual comprehensive reviews of the external professional and enrolled nurses on the Mediclinic Talent Bank.

• A key element of the group’s Talent Acquisition Model is to provide all candidates, both successful and unsuccessful, with an excellent recruitment and selection experience when engaging with Mediclinic in a talent acquisition context. A comprehensive telephonic survey conducted by the Mediclinic Career Centre about various elements of candidates’ experience with Mediclinic indicated that 94% of candidates were satisfied or that their expectations have been exceeded with the Mediclinic recruitment experience.

FiGure 20: BENEFITS OFFERED TO PERMANENT EMPLOYEES

Benefit descriptionsouthern

africa switzerland uaeRetirement fund (which includes life and disability insurance, funeral cover, pension-backed home loans) P P x*

Medical aid scheme P P P

Performance-related incentives and bonuses P P P

Nursing bonus for nursing staff and retention bonus for pharmacists (applicable in Southern Africa due to local shortage) P n/a n/a

Mpilo employee share scheme (introduced as part of BBBEE within Southern Africa) P n/a n/a

Indemnity cover/liability insurance for nursing/medical staff P P P

* The retirement benefits offered to employees of Mediclinic Middle East are governed by law. Mediclinic Middle East offers death and disability cover to all its employees.


• The High Volume, Supportive Services Recruitment & Selection Guideline aims to rationalise the recruitment effort spent on non-critical recruitment and to assist recruiters in prioritising the manner in which recruitment effort is spent towards critical skills instead.

• The focus on the recruitment of pharmacists continued and resulted in a number of pharmacist placements.

• The foreign recruitment programme recruiting registered nurses from India continues to alleviate the critical skills and nurse shortage. There are currently 142 (2012: 98) professional nurses from India employed on a corporate permit at 15 hospitals within the group. An additional three hospitals are scheduled to join this initiative during the year ahead with two new groups consisting of 27 and 47 nurses expected to arrive during this period. A challenge has been experienced in the changing implementation of the corporate permit process and this has resulted in administrative delays for these latter groups.

• A competency framework was introduced in 2012 as the central repository of competence that the group requires to deliver strategic initiatives. During the year the functional framework has been developed, describing the technical expertise required in each role and function as well as the cultural framework explaining the performance required in the current cultural context within the organisation. Testing of the software, which will integrate the competency framework with all human capital processes, is planned for the year ahead. We believe this framework will support the organisation in identifying talent, developing this talent and support succession management initiatives.

• The group’s training initiatives contribute significantly towards reducing the skills shortages, as further dealt with in this report in the section dealing with Training and Skills Development.

SWITZERLAND

Healthcare in Europe is challenged by a significant shortage of nurses. Hirslanden therefore continues to engage in the training and education of medical staff. Furthermore, with modern working conditions and regular employee satisfaction surveys, Hirslanden aims to retain employees with long-lasting employment and being an employer of choice in the healthcare industry by, inter alia, implementing Centres of Expertise specialised in remuneration and employer branding.

Employee satisfaction surveys are conducted every two years. The results of the latest survey conducted in 2012 showed an overall satisfaction level of 7.5 (on a scale of 1 to 10). The results of the surveys are used as a basis for focused organisational development projects.

The implementation of absence management enables Hirslanden to increase the attendance rate of employees and to recognise problem situations promptly. A leadership talent management process was also implemented to enhance the identification of leadership potential and the development of leadership. In support of our retention strategy, an exit monitoring process will also be implemented within the next year.

UAE

The shortage of available skills in the local labour market is a recruitment challenge at Mediclinic Middle East, especially in specific doctor, nursing, midwifery and senior management positions. This is addressed through various recruitment strategies such as active marketing of our careers portal, subscription to recruitment portals, agreements with local and international recruitment agencies, use of social media platforms such as Facebook and LinkedIn. In a new initiative to attract graduate talent, Mediclinic City Hospital took on three interns from the Gulf Medical University to complete an 18-week rotation between the Outpatient Department, the Respiratory Department and the Neurology Department. The intern placement programme was found to be extremely successful.


Mediclinic Middle East’s succession management programme will be combined with that of Mediclinic International.

During the reporting period, Mediclinic Middle East reduced the working hours across all units from 50 to 45 hours per week in an effort to retain staff and make the group more competitive in the market.

Mediclinic Middle East’s other strategies for staff retention include:

• providing competitive compensation and benefits;

• efficient recruitment approaches consistent with promoting Mediclinic Middle East as an employer of choice;

• formal on-boarding programme that promotes employee engagement and mentoring programmes to ensure that new employees are given training and supervision to facilitate a smooth transition into their new working environment;

• provision of continuous education and training opportunities to all staff;

• comprehensive policy and procedures on performance management;

• availability of communication channels to enable staff to express concerns and make suggestions;

• employee recognition programmes for long service; and

• periodic employee engagement/satisfaction surveys.

The results of the employee satisfaction survey conducted in 2012 showed an overall employee satisfaction score of 3.66 (2011: 3.48) (on a scale of 1 to 5). The next employee survey is scheduled for 2013.

DIVERSITY AND EQUAL OPPORTUNITIESMediclinic is committed to non-discriminatory treatment in all our employment practices. Our employment policies, including hiring, training, working conditions, compensation and benefits, promotion, termination and retirement are based on individual qualifications, performance, skills and experience. We treat our employees equally, irrespective of gender, age, sexual orientation, disability or other status unrelated to performing the job. The nature of the healthcare industry leans towards a female-orientated environment, which results in a disproportionate representation in relation to gender. No differentiation is made in the basic salary offered to men compared to that offered to women throughout the Group. The representation on the main governance bodies of Mediclinic and its operating platforms is illustrated in Figure 22.

FiGure 22: RACE AND GENDER REPRESENTATION ON GOVERNANCE BODIES

Black white Male Femaletotal

membersnumber % number % number % number % number

Mediclinic International Board 3 20% 12 80% 14 93% 1 7% 15

Mediclinic International Executive Committee 0 0% 7 100% 7 100% 0 0% 7

Mediclinic Southern Africa Executive Committee* 2 20% 8 80% 9 90% 1 10% 10

Hirslanden Executive Committee n/a n/a n/a n/a 4 100% 0 0% 4

Mediclinic Middle East Executive Committee n/a n/a n/a n/a 2 100% 0 0% 2

* The representation provided is in respect of the restructured composition which was implemented with effect from 1 April 2013, as referred to in the Organisational Structure included earlier in this report.


Mediclinic Southern Africa’s focus on diversity and employment equity in line with the group’s overall transformation objectives is dealt with in the section relating to BBBEE of this report. Hirslanden and Mediclinic Middle East also focus on employment equity matters in respect of gender, and their overall gender and age distribution is set out in Figure 14 and Figure 15.

Due to the unique circumstances that apply in each of the operating platforms, the Group does not have a uniform approach towards local hiring. In Southern Africa and Switzerland the Group is committed to providing employment and development opportunities to citizens of the country in which the business unit is located and employment of a foreign national will only be considered where no suitable local candidates with permanent residence can be found. In Southern Africa, however, a foreign recruitment drive is in place due to the critical skills and nurse shortage, with Mediclinic Southern Africa employing over 200 nurses from India in 19 South African hospitals. In terms of Mediclinic Southern Africa’s policy governing the employment of non-South African permanent residents within our locations of operation, the employment of non-South African permanent residents is only considered for critical skills candidates where a South African permanent resident cannot be sourced following external advertising.

In Dubai the majority of employees are not UAE nationals and the workforce is represented by 57 nationalities. However, Mediclinic Middle East supports the government’s Emiratisation programme, which aims to see its citizens employed in a meaningful and efficient manner. Attracting UAE nationals to work in the private healthcare sector has been a challenge since Mediclinic Middle East started its Emiratisation campaign in 2007. The group’s strategy is therefore to focus on training and education. Mediclinic Middle East offers support to the UAE’s Emiratisation

programme by participating in the Majid Bin Mohammed UAE National Training Initiative. We offer on-the-job training to selected UAE nationals for a period of three months, and as a result have been able to offer full-time positions to two UAE nationals to date. During the year ahead we will continue to participate in schemes such as this as well as making vacancies available to interested UAE nationals. One UAE national also serves on Mediclinic Middle East’s senior management team which consists of 15 members.

During the year no material incidents of discrimination were observed or reported throughout the Group.

HEALTH AND SAFETY AT WORK Special attention is given to health and safety aspects in the workplace to ensure a safe environment for the Group’s employees, patients and their visitors. The health of the Group’s employees is important and ensures the sustainability of the quality care to its patients. Programmes and procedures implemented by the various business units to mitigate health and safety risks are outlined below.

HEALTH AND SAFETY COMMITTEES

All Mediclinic Southern Africa’s and Mediclinic Middle East’s facilities have health and safety committees which represent all the employees in the facilities, with joint management-worker representation. In Southern Africa the committees have over 75% workforce representation. In Mediclinic Middle East the committees at both hospitals have 75% worker representation, with the clinics’ committees having 25% worker representation. Hirslanden’s health and safety processes are managed by the respective human resources departments, which are responsible for enforcing all legal regulations regarding employer healthcare and safety by means of suitable measures at group level and locally in hospitals.


INJURIES AND ABSENTEEISM

The Group’s statistics on injuries and absenteeism are provided in Figure 23.

HEALTH ASSESSMENTS, TRAINING AND PROGRAMMES

Southern AfricaMediclinic Southern Africa’s Executive: Infrastructure is responsible for occupational safety and the General Manager: Human Resource Operations is responsible for occupational health.

Mediclinic Southern Africa’s Corporate Health Programme provides a framework for the management of occupational health services and primary care to employees. This includes legal compliance with the Occupational Health and Safety Act, primary medical care, chronic disease monitoring and support, as well as social and personal problem solving and counselling provided by an Employee Assistance Programme (“EAP”). The total number of cases, including social and medical related cases, for the reporting period was 607.

Health risk assessments were undertaken at representative hospitals in all the regions within the group, which forms the basis of the medical surveillance programmes in all the hospitals. The medical surveillance programmes are utilised to mitigate specific health and safety risks. In addition

to the medical surveillance programmes, the group offers employee assistance programmes to all our employees. Total cases, including social and medical related cases, for the reporting period were 607.

Comprehensive in-house health services are rendered to employees free of charge at the health clinics that have been established at various hospitals, with more clinics being established in order to extend this service. During the period under review the clinics received 60 362 (2012: 54 162) visits, which related to health evaluations, injuries on duty and primary healthcare. The management of these clinics has been outsourced to Incon Health, an independent occupational health and safety provider.

Annual health and safety audits are conducted by Mediclinic Southern Africa to monitor the functioning of the Health and Safety Committees and verify the competence of the responsible staff members. A legal register is maintained to ensure that all relevant legislation, regulations, municipal by-laws and national standards applicable to the healthcare industry are adhered to.

An Accident Investigation course as well as a Health and Safety Representative course were attended by four employees during the reporting period.

FiGure 23: INJURIES AND ABSENTEEISM southern africa switzerland uae

Total workforce at year end 14 927 6 508 2 040

Total work-related injuries* 977 362 53

Absenteeism due to injuries (business days and including the day of the injury)

2 833 Not available** 0

Occupational diseases 4 0 0

Work-related fatalities 0 0 0

Total absenteeism due to injuries and sickness (days) 119 307 42 179 5 868

Total absenteeism rate (actual days lost, expressed as a percentage of total days scheduled to be worked by the workforce during the reporting period)

2.46% 2.83% 1.1%

* All work-related injuries are included, including first-aid level injuries.** Absenteeism in respect of work-related and non-work-related injuries is not maintained separately by Hirslanden.


SwitzerlandIn Hirslanden, health and safety processes are managed by the respective human resources departments, which are responsible for enforcing all legal regulations regarding employee health and safety.

The group complies with the guidelines of the EKAS, the Swiss coordination agency for workplace safety. Specific procedures to ensure safety at work include the review of all employees for sufficient protection against Hepatitis B, with vaccination sponsored by Hirslanden. Furthermore, an annual flu vaccination is offered to all employees. Due to the high risk of infections, accidents with knives or needles are reported with high priority and analysed periodically.

UAEMediclinic Middle East’s Chief Clinical Officer is responsible for occupational health at Head Office, with the respective Medical Directors assuming responsibility in the group’s business units.

Policies and procedures to ensure compliance with health and safety rules and regulations, such as facilities management and safety, prevention and control of infection and injuries on duty, are in place throughout the group. Staff health and safety are enhanced through various initiatives, including, inter alia:

• infection control policies, training and symposiums, especially with regard to personal protective equipment and prevention of needlestick injuries;

• safety 101 training;• employee wellness programme;• vaccinations given at discounted rates;• regular health and safety risk assessments; and• specific guidelines and notices on proper

handling of hazardous or potentially hazardous materials.

Continued importance is placed on health and safety education and various training workshops and awareness campaigns are held throughout the year.

HIV/AIDS

The Group assesses the impact of HIV/AIDS on the business. However, with the low prevalence and risk of HIV/AIDS in Switzerland and the UAE, the Group’s initiatives are focused on its operations in Southern Africa, which is regarded as a high- risk area. The UAE government implements a strict policy on medical checks as part of its visa guidelines. Any expatriate found HIV/AIDS positive faces automatic deportation. Safety procedures are implemented at all three platforms to protect staff against sharp injuries.

Mediclinic Southern Africa is fortunate to have escaped the negative impacts of HIV/AIDS. A comprehensive HIV/AIDS risk assessment was done during the previous year, indicating a 6% prevalence rate. We believe our policies and training programmes contribute positively to the low prevalence and to managing the direct and indirect impacts of HIV/AIDS on the group’s business. Mediclinic Southern Africa’s HIV/AIDS Programme consists of the following elements, as stated in the group’s HIV/AIDS policy:

• education on HIV/AIDS combined with awareness programmes;

• voluntary counselling and testing;• prevention of HIV infection and re-infection;• access to appropriate treatment and monitoring;

and• continuous support through the EAP as well as

early intervention.

The annual World Aids Day on 1 December is supported by hosting information sessions at hospital level that not only include our own staff but also any other interested individuals. During the year, R132 000 was spent of HIV/AIDS training with HIV/AIDS Peer Counselling Courses and HIV/AIDS Awareness Programmes presented at locality level on an ongoing basis. During the year 96 employees attended HIV/AIDS Peer Counselling Courses. All new staff members employed at hospitals with Health Clinics undergo pre-induction and orientation lectures on HIV awareness, safe treating of wounds, handling needlestick injuries, discarding needles and cleaning blood spillages.


Free HIV testing and counselling are offered to all staff and access to antiretroviral (ARV) drugs is managed as a public private partnership with the Department of Health as well as some medical aids.

traininG anD sKiLLs DeVeLopMent The Group’s training programmes are focused on improving its human capital, improving core business processes, maintaining and promoting quality service delivery in all aspects of the business, and alleviating the shortage of skills, especially in nursing.

EMPLOYEE TRAINING The Group continues to invest significantly in training and skills development, with Mediclinic Southern Africa investing approximately 4% of payroll, Hirslanden approximately 4.2% and Mediclinic Middle East 0.34%. Mediclinic’s stated commitment to quality care continues to drive skills development as a priority at all levels, which is reflected in the number of learning initiatives undertaken each year. The performance management system that is applied throughout the Group, as referred to in the section of this report dealing with employee performance reviews is also utilised to identify and manage training needs of employees and to discuss career development.

SOUTHERN AFRICA

During the past year Mediclinic Southern Africa recorded 36 274 (2012: 35 320) structured learning interventions, many of which involved skills assessments, as illustrated in Figure 24. The nature of the training provided includes formal qualifications, but also training in clinical, technical, management, administrative and leadership skills.

FiGure 24: MEDICLINIC SOUTHERN AFRICA TRAINING INTERVENTIONS

training categorynumber of training

interventionsAdministration 4 175

Craft 277

Elementary 890

Legislative 704

Plant 278

Professional 14 017

Service 3 292

Technical 12 641

TOTAL 36 274

The strategy of Mediclinic Southern Africa’s Training Department is to align training with the needs of the company as well as contribute towards alleviating the skills shortage nationally. The Training Department is well positioned to meet the requirements of the Nursing Act and to participate in any opportunities that may arise in training-related public private partnerships. The group is confident that the private sector has a meaningful role to play at many levels in addressing the acute shortage of healthcare workers in the country (see details of PPPs included earlier in this report). The provisional registration status of Mediclinic Southern Africa as a private higher education institution was converted to full registration and extended to all six current Mediclinic Learning Centres by the Department of Higher Education and Training during the previous reporting period. This achievement offers the potential to grow our education programmes to new levels. Since 2009 Mediclinic Southern Africa has also been provisionally registered by the Department of Education as a private Further Education and Training college. The group is therefore able to establish it as an independent training provider for all levels of the higher education framework. Mediclinic Southern Africa’s success is evidenced by the Mediclinic pass rate being consistently above the national average pass rate in respect of the South African Nursing Council examinations.


During the 2012 academic year 520 (2011: 641) students successfully completed basic nursing courses, 70 (2011: 83) students completed post-basic nursing courses. Besides the formal programmes, 978 (2011: 911) learners completed other Mediclinic courses in various disciplines. The reason for the decline in basic nursing course numbers was due to a Bridging Course intake not realising in January 2011. This was decided because of uncertainty around the SA Nursing Council’s strategy concerning the continuation of the course.

Mediclinic Southern Africa’s support of technical training programmes addresses the shortage of skilled technical personnel. Electrical apprenticeship programmes continue in line with the merSETA (Manufacturing, Engineering and Related Services Education and Training Authority) standards. This success opens opportunities for further artisan training. Mediclinic Southern Africa also continues to train pharmacist assistants, both basic and post-basic, in an effort to develop our staff as well as address some aspects relating to the shortage of pharmacists. Training opportunities are also offered for pharmacists.

In an endeavour to assist with improving the provision of skilled nursing resources, Mediclinic Southern Africa provides funding for Mediclinic learners through the University of Pretoria, University of the Free State, University of Johannesburg, Stellenbosch University, Unisa and the University of Namibia. These learners are able to obtain the practical experience required at Mediclinic Southern Africa’s hospitals. Learners from other institutions are also placed in Mediclinic Southern Africa’s hospitals for practical experience if requested. Another area of collaboration is the agreement with the Western Cape Department of Health for Mediclinic Southern Africa to train Operating Room Practitioners for Groote Schuur Hospital and Tygerberg Hospital. The initial group of nine learners commenced in February 2011 and a second group of seven learners commenced in

February 2012. This project is continuing with a long-term view to supply Operating Room Practitioners to other public sector hospitals as well.

Clinical skills training is well established and Mediclinic also has a well-established system of continuous professional development (“CPD”) in the nursing fraternity. This continues to give us an advantage as we are ready for the introduction of mandatory CPD when the regulation for this is implemented by the South African Nursing Council. CPD has been introduced in several other departments as well. Established expertise in instructional design continues to serve the group well in rapidly meeting new challenges in competence development as they arise. Our General Management Development Programme continues to be successful and has now been running for five years and focuses on developing employees on an accelerated learning path with exposure to the business, industry and the responsibilities of a manager in a structured manner. This programme was reviewed and a more structured approach has been implemented. Candidates are now offered the opportunity of following a specialisation elective as well as the generic programme. This will equip them for a specific role in the management team of the hospital. One candidate commenced the programme during 2011 and is following the nursing elective. Other management and leadership programmes are available at different levels and suitable for all functional disciplines.

Our training activities continue to concentrate on core business processes and the enhancement of our service culture. There is a focus on risk management, an integral part of which is the standardising of processes based on best practices. The changing nature of this environment has necessitated the use of technology in training delivery, particularly regarding performance support and online help systems.


We are pleased with the performance as measured against our training and skills development goals and objectives as illustrated in Figure 25. A KPI system was used to measure the group’s training performance and the first results are being used to address areas where training results can be improved.

The group’s training policy is available to all staff on the intranet. Brochures regarding formal training programmes offered by Mediclinic Southern Africa are available to the public. Mediclinic Southern Africa’s Executive: Human Resources is responsible for training and skills development management of the group.

SWITZERLAND

Hirslanden’s education and training programme covers a broad spectrum and opportunities are offered to employees at all levels. The group’s career building is geared towards performance management, leadership building, quality control and client relationship building. Training initiatives are in support of these areas and many special courses are offered to staff, some of which are

mandatory. The results of the patient satisfaction surveys are also taken into account to determine training needs.

During the year, Hirslanden spent approximately 4.2% of payroll on training (basic, further and advanced). During the year 700 apprentice employees received formal training (federal certificate, higher college, college or graduate students) across 27 professions, of which 599 students were healthcare professionals and 28 junior doctors. In-house leadership and management courses were attended by 232 management employees. Furthermore, approximately 1 000 in-house training sessions were conducted by the group’s 14 hospitals.

UAE

Mediclinic Middle East’s learning and development philosophy is centred on providing strategic support to the performance requirements of the group. During the year, 0.34% of payroll was spent on training. Approximately 634 training sessions with 6 187 learning interventions were recorded

FiGure 25: TRAINING GOALS AND PERFORMANCE (MEDICLINIC SOUTHERN AFRICA)

2012/13 goals and performance against goals 2013/14 and long-term goals• Secure accreditation and registration of the

new formal programmes and develop material: provisional accreditation was granted by the Council on Higher Education, but the SANC has postponed the process for applications.

• Formalise content development process for electronic delivery: an e-learning expert was appointed in May 2012 and the content development process is now formalised.

• Ensure that pharmacy services have adequate pharmacist assistant trainees: pharmacist assistant training was funded in 2012.

• Complete the HWSETA ISOE e-learning project: the initial project was completed.

• Develop a forensic nursing programme: the programme has been implemented.

• Focus on the quality of assessment practices in the organisation: there is a continuous focus through moderation of assessment.

• Promotion of the concept of a learning organisation: this concept is being communicated via HR news communication made available to line managers.

2013/14 goals

• Support the implementation of an ERP system.

• Expand physical facilities and capacity.

• Develop and implement the curricula for new formal programmes.

• Provide training in support of the patient journey.

• Participate in the nursing odyssey.

• Train pharmacist assistants/technicians.

Long-term goals

• Provide sufficient qualified nurses for the needs of the group.

• Provide sufficient qualified healthcare workers in non-nursing categories according to the needs of the group.

• Build and maintain a training and development infrastructure that can be duplicated on an international basis.

• Provide training externally to generate revenue.

• Build management capacity to meet the needs of the company and to be in a position to utilise opportunities as they arise.

• Enhance and maintain the quality of training delivered through a comprehensive quality assurance process.

• Build positive relationships with all stakeholders.

• Maintain transformation principles.

• Ensure that all processes and systems are operationally efficient and continually upgraded in line with new knowledge and technology. Ensure that all employees have access to knowledge when and as required.


during the year, with the average hours of training per employee illustrated in Figure 26.

FiGure 26: MEDICLINIC MIDDLE EAST IN-SERVICE TRAINING HOURS

employment categoryaverage training hours

per employeeClinical 7

Nursing 4

Paramedical 8

Administration 1

Support 2

Training and development continues to be an important thrust of Mediclinic Middle East. The group’s policy on training and development covers the induction programmes for new joiners, mandatory programmes specifically for nurses, developmental programmes, supervisory and managerial programmes, health and safety programmes, continuous medical education and its link to licensing for clinical practitioners, mandatory resuscitation courses, and sponsorship to local and international conferences.

The implementation of the group’s training policy is performed in a decentralised manner. The responsibility for clinical training is shared by the group’s Chief Clinical Officer and Medical Directors of the business units for the continuous medical education of doctors, the Directors of Nursing in the hospitals for the training of nurses and allied professionals, and the newly created position of Learning and Development Manager for non-clinical training.

Training offerings are communicated to the staff by way of training calendars published on the intranet and notice boards. The training courses provided for the group’s employees include courses that aim to enhance job-specific skills. In addition, the company also provides supervisory and managerial courses to support incumbents and staff with leadership/managerial potential.

Mediclinic Middle East has a strong commitment to continuous professional development and both the hospitals have a very active “in-house” continuous medical education (“CME”) programme that is

presented on a weekly basis where official CME points can be obtained. There is also a dedicated budget to support doctors in the group to attend conferences and courses to ensure that they are kept abreast of the latest developments in their field. According to the regulations of the Dubai Health Authority and Dubai Healthcare City, doctors and nurses are required to accumulate a certain number of CME points annually to remain registered.

The non-clinical training requirements of the group are supported by head office through the Corporate Training and Development Department. This department is responsible for training on various modules of the hospital information system, soft skills training, induction and provision of various tools to facilitate employee engagement.

A comprehensive 10-week basic ICD 10 and CPT 4 coding training course was held in the last year to prepare candidates to be certified as Certified Coding Associates. This training course empowered staff to improve coding accuracy and quality, to support e-claims and to minimise rejections of claims. Twenty eight candidates completed the Certified Coding Associate examinations successfully and were nominated from various departments.

Our training and skills development goals for the next financial year are to:

• support the business in ensuring a better approach to the on-boarding of new employees;

• assist the operations in improving the quality of service delivery according to patient needs and expectations;

• contribute to the continuing upgrade of the employees’ level of performance through continuous knowledge and skills development;

• support the coaching/training programme for UAE nationals;

• help develop understudies for supervisory/managerial positions through the conduct of preceptorship and leadership programmes; and

• sustain the ongoing drive to establish collaboration with various universities for continuous educational opportunities for staff.


CONTINUOUS PROFESSIONAL DEVELOPMENT OF DOCTORSSOUTHERN AFRICA

During the period under review, more than 450 continuous professional development (“CPD”) functions throughout Mediclinic Southern Africa were held for doctors, which were attended by just over 6 500 doctors. These functions serve as valuable training opportunities aimed at keeping the group’s associated specialists and referring general practitioners abreast of the latest developments in the medical field. The Medical Protection Society, in partnership with Mediclinic Southern Africa, held 36 ethical CPD workshops on risk management and managing adverse outcomes at the group’s hospitals.

SWITZERLAND

Hirslanden presents a variety of professional development activities for referring general practitioners and associated specialists, of which the Hirslanden Academy and Hirslanden Symposia are the most relevant. Hirslanden Academy offers four yearly events for doctors and assigns credit points. Hirslanden Symposia are held several times every year, offering continued training opportunities for specialists. All of the group’s hospitals also offer various events and training for doctors.

UAE

Mediclinic Middle East has a strong commitment to continuous professional development and both the hospitals have a very active “in-house” continuous medical education (“CME”) programme that is presented on a weekly basis, where official CME points can be obtained.

There is also a dedicated budget to support doctors in the group to attend conferences and courses to ensure that they are kept abreast of the latest developments in their field. According to the regulations of the Dubai Health Authority (“DHA”) and Dubai Healthcare City (“DHCC”), doctors and nurses are required to acquire a certain amount of CME points annually to remain registered.

Mediclinic Middle East subscribes to the UpToDate for all its facilities. The programme allows doctors and nurses to have access to online clinical information from their desktops and is used extensively throughout the group. The group also has access to LEXICOMP, a software programme that provides doctors with important information on drug interactions, indications, contra-indications of medication usage, etc.

In addition to the CME seminars set up by individual hospitals and clinics, Mediclinic Middle East also organised several CME seminars at a company level which were open to Mediclinic Middle East doctors and community-based doctors.

SUPPORTING ACADEMIC INSTITUTIONSThe Group is committed to educational develop-ment in all three of its operating platforms and continues to provide financial and other support towards healthcare education. A few examples of our sponsorships are listed below.

SOUTHERN AFRICA

Mediclinic Southern Africa continues its commitment to educational development in Southern Africa. During the year our training initiatives included financial support to various academic institutions and funding to students through universities to the value of R2.6m (2012: R2.9m), some of which are listed below. Mediclinic Southern Africa educators are also involved in giving lectures on behalf of the various universities and educational institutions.

The financial support included here does not form part of the group’s corporate social investment reported on in the section of this report dealing with our community involvement.

Stellenbosch University Stellenbosch University has been recognised as one of the four top research universities in South Africa and Mediclinic Southern Africa is proud of its ongoing association with this premier academic institution. For a number of years the group has


made and continues to make annual financial contributions of R1m to the Stellenbosch University Health Sciences Faculty for this purpose. Among the departments and disciplines benefiting from this partnership are:

• Microbiology – The university’s microbiology division is conducting research to establish local benchmarks on hospital-acquired infections and MRSA (methicillin-resistant staphylococcus aureus), which are key areas for risk management. The results will assist both Mediclinic and the public sector in developing policies and procedures to mitigate the risks associated with hospital-acquired infections and MRSA.

• Clinical pharmacology – One registrar post in clinical pharmacology is sponsored.

• Infection prevention and control – The collaboration involves financial support towards the development of the training and education infrastructure of the unit for infection prevention and control.

A further R100 000 was provided to the university’s Centre of Ethics.

University of the Western CapeMediclinic Southern Africa is in partnership with the University of the Western Cape’s School of Pharmacy to support its efforts to provide management training to pharmacy students over a three-year period and has donated R158 000 annually to these courses, confirming the group’s commitment towards an improved healthcare system.

University of PretoriaMediclinic Southern Africa once again provided support to the Health Sciences Faculty of the university with the sponsorship of R130 000 of an administrative post in the vascular surgery unit during the period under review.

University of Limpopo – Medunsa Mediclinic Southern Africa contributed R300 000, thereby creating 50 bursary opportunities. These bursaries were awarded to MMed students who are completing specialist training. Mediclinic Southern Africa will continue this support in the future. The group also provided financial assistance to the university’s surgery department. A donation of R200 000 was also made towards the surgery department.

University of the Free StateMediclinic Southern Africa sponsors the subscription of R250 000 to the UpToDate clinical information resource service on behalf of the University of the Free State. This service offers associated academics and medical professionals access to evidence-based, peer-reviewed medical information that contains a vast selection of literature, latest evidence and specific recommendations for patient care.

University of NamibiaMediclinic Southern Africa is committed to contributing R200 000 for research programmes at the university’s new medical facility in the next financial year.

SWITZERLAND

Hirslanden cooperates with different regional and local education centres for the education of health professionals in nursing. The group also provides assistance to various public hospitals, for example, sharing the education of intensive care professionals.

UAE

Dubrovnik International University Mediclinic Welcare Hospital is the teaching hospital of the Dubrovnik International University (“DIU”). DIU is an internationally accredited university with a strong focus on postgraduate training. Mediclinic Welcare Hospital hosts the Ian Donald School

the Group is coMMitteD to eDucationaL DeVeLopMent in aLL three oF its operatinG pLatForMs anD continues to proViDe FinanciaL anD other support towarDs heaLthcare eDucation


of Feto-Maternal Ultrasound, offering master’s degree courses in this subject as well as Minimally Invasive Gynaecological Surgery. As part of the collaboration two doctors at Mediclinic Welcare Hospital have been honoured as faculty members and professors at DIU. Another training course and conference is planned for the year ahead.

University of SharjahMediclinic Welcare Hospital provides practical training for students from the University of Sharjah’s Medical Diagnostic Imaging Department. There are two courses per year during which five to eight students receive 16 weeks of training within MRI, CT, ultrasound, mammography, OT and conventional x-ray disciplines. This initiative received special approval from the DHA as private hospitals are generally not permitted to host students.

UAE Medical Students’ ConferenceMediclinic Welcare Hospital sponsored the 6th UAE Medical Students’ Conference, attended by more than 600 students from UAE medical colleges.

Al Jalila FoundationMediclinic Middle East has agreed to support the Al Jalila Foundation, a not-for-profit organisation established by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, to support medical education and research. The group’s support will take the form of medical services.

inVestinG in the coMMunitYMediclinic’s contribution towards sustaining a healthy community starts within our own facilities, where we strive to provide clinical excellence and quality care. We contribute to the well-being of the communities within which we operate by investing in ongoing initiatives that address socio-economic problems or risks and have established ourselves as an integral member of these communities, extending our quality service offering beyond the walls of our hospitals and enriching the lives of many communities throughout South Africa, Switzerland and the UAE. We structure our corporate social investment (“CSI”) activities around the improvement of healthcare through training and education, sponsorships, donations, staff volunteerism, public private initiatives and joint ventures.

Many of the Group’s initiatives relate to providing training as well as financial support and donations towards education and training. Please refer to the section in this report dealing with our training and development initiatives, in particular also our support of academic institutions.

Given the socio-economic conditions in Southern Africa, compared to the other areas of operation within the Group, the main focus on CSI is in Mediclinic Southern Africa.

SOUTHERN AFRICA

Mediclinic Southern Africa believes that it could have a meaningful impact on the greater South African society, with much to contribute to previously disadvantaged communities and destitute families in South Africa through its skills, technical expertise, financial resources and employee time. Mediclinic Southern Africa’s CSI programme is in line with the group’s business objectives and aims to facilitate the best use of the group’s resources to address the healthcare needs of many more South Africans.


The group’s CSI strategy centres on four core areas of involvement, namely health, education, sport and welfare, and operates on three tiers, as illustrated in Figure 27. By developing these three tiers, we aim to offer social leadership, operational partnerships and staff engagement for the benefit of society in areas which are aligned with our core business offering. Approximately R5.8m (2012: R5m) was spent across the three tiers of the CSI strategy during the year. The CSI expenditure excludes operational costs such as travelling, publicity of CSI projects and salaries, as well as our donations and investment in training initiatives, as reported under training and skills Development in this report.

Tier 1 involves partnering with government to provide the community with much-needed surgical support in various disciplines. As highlighted briefly under our performance highlights earlier in this report, some examples of our initiatives during the year are listed below.

• Partnership with the KwaZulu-Natal Department of Health and Pink Drive as part of World Breast Cancer Awareness month, by assisting the department with its “Phila Ma” project aimed at women’s health. A total of 150 women were screened for breast cancer by way of a mammography, and within two weeks the results, from private radiologists, were sent back to their respective government hospitals for further treatment for those who needed it. The project was offered at three public hospitals in the area. Through this intervention, the waiting lists at these hospitals reduced significantly. The total financial contribution amounted to R235 000.

• Partnership with the Red Cross Children’s Hospital Trust in the Western Cape Province through which 87 children benefited, building on the success during the previous reporting

period during which 56 children benefited. The Saturdays Surgeries project was completed in November 2012. The total financial contribution amounted to R217 000.

Tier 2 projects aim to enhance the role of accredited community organisations by providing monetary and product support in line with our CSI strategy’s four focus areas (education, sport, health and welfare). In this regard we have supported 52 accredited community organisations, a few examples of which are listed below, with monetary support amounting to R2.75m, and in-kind donations such as linen and beds to the value of R300 000 during the year.

• Africa Takkun, which organisation focuses on creating a sustainable future for the children living in South African townships by investing in education, health and empowering the communities. The group supported the project based at Mfuleni, Cape Town.

• Carel du Toit Trust, which focuses on deaf awareness, early detection, and rehabilitation and oral education. The group’s donation was used for the audiology services that the organisation renders with great success.

• St. Joseph’s Care and Support Trust, which specialises in quality palliative care for terminally ill patients, community-based healthcare for HIV/AIDS and other life-threatening illnesses and orphaned and vulnerable children (OVC).

• QuadPara Association of South Africa (QASA), an organisation that is managed by, and focuses on people living with physical disabilities with a particular focus on skills development and preparing members for the workplace. They also have awareness campaigns that speak to rights, information and counselling.

A single national initiative

enhancement of current market initiatives/projects

Staff involvement through volunteerism

Social leadership

Operational partnership and joint ventures

Staff engagement

Three-tier approach

FiGure 27: MEDICLINIC SOUTHERN AFRICA’S CSI APPROACH

tier 3

tier 2

tier 1


Tier 3 provides a platform for our employees to make a difference by volunteering their time, expertise and knowledge to community organisations around our hospitals. This year particular attention was given to volunteerism during the International Mandela Day. Examples of volunteerism projects undertaken during the year include the following:

• Mediclinic Worcester employees volunteered at the Brandwacht Primary School in Worcester refurbishing school desks and tables, made and fitted curtains and painted the classrooms.

• Mediclinic Durbanville employees, as part of the 67 minutes for International Mandela Day, volunteered at the J.R. Old Age Home in Durbanville serving meals and donating various items (such as first-aid kits and linen).

• Mediclinic Head Office employees renovated a building for the Trauma Centre in Kayamandi, Stellenbosch. The centre serves as a resource to the Kayamandi Police Station and the community, especially to victims of sexual crimes.

The projects conducted under each of these pillars are a reflection of Mediclinic Southern Africa’s ongoing commitment to assist in reducing the host of social challenges, and to play a positive role making a difference in lives of all South Africans.

During the year ahead, a strategic decision was taken to assist the national Department of Health with the Public Health Enhancement Fund (“PHEF”), as reported on earlier in this report under public private partnerships. The PHEF is a joint initiative between the national Department of Health and the private healthcare sector aimed to produce more medical personnel for South Africa and focus on public sector management training and equipping, so as to strengthen the public sector for the benefit of the people of our country. Mediclinic Southern Africa has committed to contributing 0.75% of its net profit after tax annually to this fund. The group’s significant contribution to the fund will replace the group’s tier 1 and tier 2 corporate social investment contributions for the year ahead.

In addition to our CSI initiatives which are coordinated on Group level, our hospitals also provide annual and ad hoc sponsorships of community, school and regional sporting and cultural events, and also take part in many annual national health awareness days by providing free health screenings, discussions and workshops during national awareness initiatives such as breast cancer month, heart and stroke week, diabetes and pregnancy education months, and many others.

Corporate eventsMediclinic Southern Africa’s events department is a leader in providing medical services at sporting and other events in South Africa. Some of the high-profile sporting and cultural events where these services are provided include the Absa Cape Epic Mountain Bike Challenge, the Cape Argus Pick n Pay Cycle Tour, the Kalahari Augrabies Extreme Marathon, the Cape Times Big Walk and the Africa Ice Swim.

SWITZERLAND

Hirslanden strives to be an active corporate citizen contributing to the well-being and sustainable development of the communities it serves as well as Swiss society as a whole. To this end Hirslanden is engaged in various activities, ranging from public lectures on health topics to supporting local and national health projects and foundations.

One of the current projects is the active support of the EurAsia Heart Foundation that has established a medical network in Eastern Europe and Asia that deals with heart and cardiovascular diseases of all age groups. Hirslanden supports the foundation financially as well as logistically and through communication initiatives.

Public information events are held on a regular basis, providing first-hand information about a variety of medical conditions and their treatment. Our affiliated specialists are involved in each of them and we were able to attract over 15 000 individuals to these public sessions during the period under review. All sessions are advertised in the local press as well as in printed programmes


and hospital magazines. A comprehensive list of all events is published on the group’s website, with the possibility for a visitor to register online for a session. This initiative enables our specialists to deliver high-end medical information in a way the public understands.

Hirslanden spent CHF1.7m on CSI projects during the period under review, the distribution of which is illustrated in Figure 28. The group supports numerous local projects, sports teams and other cultural events and associations, a few examples of which are listed below:

• The majority of Hirslanden’s CSI contribution was invested in contributing as the local medical partner for a number of sport events and sport teams.

• Various arts and culture projects are supported, including financial contribution to the Lucerne Symphonic Orchestra.

• Financial support for the medical Check-up programme that is broadcast on various local television stations.

UAE

Mediclinic Middle East is actively involved in various social and charitable community activities. The group contributed AED398 000 to corporate social responsibility projects during the reporting period. Initiatives included free health screenings, health talks, awareness campaigns on particular health topics and blood donation campaigns. For the year ahead AED500 000 has been budgeted for corporate social responsibility projects and the key focus areas will be health, education, sport and welfare of individuals affected by war and natural disasters in the region.

Individual facilities within the group also have their own corporate social responsibility programmes in which they support charities of their choice. The group supports any medical staff members who

wish to volunteer their services in regions affected by conflict or natural disasters.

Some examples of the initiatives we supported during the year are provided below.

• Various health awareness presentations and screenings at numerous local schools, businesses, organisations and the public on topics such as breast cancer, nutrition, cholesterol, diabetes and infection control.

• Free health screenings were offered by all units on World Health Day (±1 300 people screened), World Diabetes Day (±1 800 people screened) and World Heart Day (±2 000 people screened).

• First-aid provider at events such as the Dubai Terry Fox Run (±5 000 participants), Dubai Marathon (±25 000 participants), the 5 km Women’s Run (±2 000 participants) and the 80s Rewind music concert.

• Various contributions to medical costs, including AED40 000 towards the costs of a new prosthetic leg for a seven-year-old patient; and AED14 500 for a new active wheelchair with specialised seating for a 12-year-old patient with spina bifida.

• Mediclinic City Hospital launched a charity drive to raise funds for the Dubai Early Child Development Center which helps integrate children with disabilities into the community. Suppliers and staff were encouraged to donate and hospital management contributed a lump sum of AED15 000 to raise AED27 000 in total.

• Mediclinic City Hospital also sponsored the Pakistan Solidarity Walk, organised by the Pakistan Association Dubai, a non-profit volunteer, social welfare and cultural organisation of expatriate Pakistanis.

• Mediclinic Welcare Hospital provided a prosthesis for a Palestinian boy in association with the Palestinian Children Relief Fund, and a Filipino student whose parents could not afford the AED30 000 required for treatment.

FiGure 28: HIRSLANDEN CSI CONTRIBUTION

Medical partnerships (CHF722 450)

General health projects (CHF398 510)

Arts and culture (CHF217 400)

Foundation projects (CHF125 290)

Education (CHF24 520)

Sport (CHF94 810)

43%

24%

13%

7%

7%6%


• Mediclinic Welcare Hospital sponsored an expedition of UAE-based breast cancer survivors to the Antarctic which was carried out to raise awareness of breast cancer and to highlight the UAE as an emerging leader in the field of women’s health initiatives.

• AED21 000 raised through the ‘Share a Smile’ campaign in support of Operation Smile UAE, an international children’s charity which provides free and safe corrective surgeries on children born with cleft lips and cleft palates.

enVironMentaL perForMance The Group is committed to protecting the environment, conserving natural resources and utilising resources in an effective and responsible way, ensuring the health and safety of its employees and clients by adopting sound health, safety and environmental practices in all its business activities.

ENVIRONMENTAL POLICY The Group Environmental Policy, aimed at minimising Mediclinic’s environmental impacts, requires each operating platform of the Group to:

• identify and comply with relevant environmental legislation and regulations;

• identify and manage all risks relating to the Group’s impact on the environment with regard to water use and recycling, energy use and conservation, emissions and climate change, and waste management and recycling;

• define environmental management programmes in accordance with international standards to achieve continual improvement of the Group’s environmental management systems;

• create environmental awareness among all employees;

• set objectives and targets to prevent pollution and minimise the impact of the Group’s activities on the environment;

• encourage reduction, re-use and re-cycling of general waste;

• manage hazardous waste, including healthcare risk waste;

• influence the Group’s suppliers and service providers to adopt similar programmes, in order to limit its overall impact on the environment;

• nurse the use of resources; and• engage with the Group’s stakeholders on its

environmental performance in an open and transparent manner.

The policy assists the Group in identifying aspects of its business that could have a significant impact on the environment, and to set objectives and targets in a review process to eliminate or reduce the impact of these aspects on the environment. It formally documents the Group’s commitment, strategy, reporting standards and governance approach to managing its environmental impacts and performance. All business divisions within the Group are required to implement appropriate environmental management systems and (where appropriate) have these certified by an internationally recognised body.

The Group Chief Executive Officer and the Chief Executive Officers of the operating platforms are responsible for the implementation of the policy, the duties of which may be delegated to an appropriate manager of sufficient seniority.

ENVIRONMENTAL MANAGEMENT AND RISK ASSESSMENT SOUTHERN AFRICA

Mediclinic Southern Africa is committed to ensuring that its environmental management systems and practices are aligned with international best practices, which are based on the ISO 14001:2004 Specification for Environmental Management Systems. The group’s performance is assessed through certification by an external assurance provider (the National Quality Assurance London), as accredited by the United Kingdom Accreditation Services.

The group achieved its objective of having 39 (2012: 38) of its 52 hospitals ISO 14001:2004 certified to date. The number of ISO 14001 trained hospitals, which includes the 39 certified hospitals, increased from 51 to 52, which now encompass all the hospitals within the group. The ISO 14001 trained hospitals follow the same environmental management practices as the certified hospitals and are also subject to annual legal compliance internal audits. The group’s progress in certification and training is illustrated in Figure 29.

The main categories of environmental impacts being managed are the utilisation of resources and waste management, which include electricity, water, gases, paper, healthcare risk waste and normal waste. These have a direct effect on the carbon emissions of the group.

The risks associated with climate change are assessed annually by Mediclinic Southern Africa and managed in terms of the group’s risk management procedure. These potential risks include:


• Regulatory risks: Operational costs of running of facilities could be affected by risks relating primarily to energy supply, with 81% of our carbon emissions from electricity purchased;

• Physical risks: Access to facilities and interruptions in service resulting from risks of water shortage, electricity load shedding or incidents of extreme weather conditions.

During March 2013 all the group’s hospitals completed ISO 14001 aspect legal register surveys, compared to 41 hospitals in the previous year. The aspect legal register assists the group in ensuring compliance with internal environmental policies and legislation. It further identifies risk-based control weakness per hospital. A satisfactory average score of 76% was achieved across the group. The control weaknesses identified will assist the relevant hospitals in preparing the required action plans.

During the year, ISO 14001 gap audits were conducted by head office staff at 34 Mediclinic Southern Africa hospitals, which provide independent assurance that controls are in place to mitigate environmental risks identified in the hospitals’ aspect legal register. The average score of 76% achieved across the group provides assurance that the group’s environmental risks are being managed adequately.

SWITZERLAND

Strict and comprehensive environmental legislation and regulations apply in Switzerland, with which Hirslanden complies, ensuring that the group maintains the highest degree of environmental care. The Engineering Services teams at the hospitals, under the guidance of the group’s Head of Real Estate, are responsible for managing the group’s environmental impacts and continue to focus on improving existing measures. During the year, a new position within this department was filled

to assume responsibility for managing, inter alia, the group’s energy projects and a Sustainability and Environment Management working group was established under the leadership of the environmental manager project leader. The working group has strengthened the group’s 2013-2017 vision, strategy and values in the area of ecological sustainability. As part of its 2013-2017 strategy the group set the following objectives:

• operative energy costs to be reduced by targeted optimisation measures (best practice);

• sustainability reporting to be integrated in the Hirslanden quality/annual report; and

• the sustainability rubric (e.g. projects, energy saving tips, mobility) to be an integral part of internal employee communication (apropos).

Hirslanden plans to build on the existing ISO 9001:2008 quality management system already in place throughout the group, through the ISO 14001:2004 environmental management principles. This will also be fundamental in the EFQM Excellence Model. It is planned to implement a structured environmental management system based on the ISO 14001:2004 environmental management system as a pilot project in one of the group’s hospitals.

The group continues to record and monitor key environmental performance indicators, such as CO2 emissions, energy and water consumption, paper usage and waste. Klinik Hirslanden, Klinik Im Park and, during the year, also Klinik Stephanshorn received recognition as CO2-reduced businesses by the Swiss Energy Agency for the Economy on behalf of the Swiss Federal Office of Energy. This achievement recognises the contracted commitment to reduce CO2-emissions within operations.

ISO 14001 2004 certified and trained hospitals (including the certified hospitals)ISO 14001 2004 certified and trained hospitals

FiGure 29: ISO 14001:2004 CERTIFIED AND TRAINED HOSPITALS – MEDICLINIC SOUTH AFRICA

2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

8

28

34

18

26

43

16

35 3

8

51

39

52


UAE

Selected ISO 14001:2004 environmental management standards have been implemented at Mediclinic Middle East.

Mediclinic City Hospital’s ‘Go Green’ committee continued its activities to create awareness among the hospital staff through training, education and meetings.

EMISSIONSSOUTHERN AFRICA

The Carbon Disclosure Project (“CDP”) is a global initiative measuring companies around the world and 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. Following an annual evaluation process, qualifying participants are ranked in the Carbon Disclosure Leadership Index (“CDLI”), which recognises companies with leading disclosure practices. The CDLI focuses on climate change governance, risk management, performance, transparency and data management. 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 in respect of Mediclinic Middle East was also included since 2010, although it still remains an initiative focusing mainly on Mediclinic Southern Africa’s data. Mediclinic’s CDP reports can be accessed on the CDP website at www.cdproject.net.

During the most recent CDP 2012, Mediclinic was ranked joint 4th out of the 76 JSE-listed companies that were included in the CDLI (Figure 30). Participation in the project provides companies with an opportunity to identify climate change-related management aspects that require further attention and this has assisted Mediclinic Southern Africa to implement measurements and processes to monitor its carbon emissions. The group’s participation further enabled Mediclinic Southern Africa’s commitment to be transparent by providing detailed information to interested stakeholders about the group’s initiatives to reduce its carbon footprint and environmental impact. The group will continue to participate in this project in future.

Our overall electricity consumption in terms of kilowatt-hour used decreased by 2% during the year despite growth in our business in terms of increased bed days sold, full-time employees, square metreage and operational beds. This was achieved through initiatives with regard to improved operational efficiency of technical installations and behaviour change of staff within the group.

The carbon footprint of Mediclinic Southern Africa is measured using the GHG Protocol and includes direct emissions, which in the healthcare industry will refer mainly to the emissions of anaesthetics gases (scope 1 emissions); indirect emissions from the consumption of electricity (scope 2 emissions); indirect emissions from suppliers, which in the healthcare industry will refer mainly to pharmaceutical, bulk oxygen and waste- removal suppliers (scope 3 emissions); as well as 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

FiGure 30: RESULTS OF SOUTH AFRICAN CARBON DISCLOSURE PROJECT

cDp6 2008 cDp 2009 cDp 2010 cDp 2011 cDp 2012Ranked 7th amongst CDLI leaders in low carbon sector

Ranked amongst top 16 performers, although not included in CDLI

Ranked joint 2nd position in CDLI

Ranked 43rd in CDLI*

ranked joint 4th position in cDLi

* Mediclinic Southern Africa’s regression from 2nd position in the CDP 2010 to 43rd in the CDP 2011 was due to an error in the group’s submission. The omission to complete the questions relating to physical opportunities had a significant impact on the score due to the high weighting of these questions.


81%

FiGure 31: CARBON EMISSIONS PER HOSPITAL-SPECIFIC ACTIVITIES (MEDICLINIC SOUTHERN AFRICA)

Electricity

Anaesthetic gases

Air conditioning

ER24

Pharmacy deliveries

Kitchen deliveries

Other

1%2%2%

7%

5%2%

converted into a carbon dioxide equivalent (CO2e) using recognised calculation methods, emission factors and stating assumptions made, where relevant. Mediclinic Southern Africa’s carbon footprint as reported in our Carbon Disclosure Report 2012 is set out in Figure 31 to Figure 33, evidencing that electricity is the main contributor to our carbon footprint. Figure 32 illustrates that although there has been an increase in our total greenhouse gas footprint, the total weight of CO2e per bed day decreased from 113 kg to 111 kg CO2e/bed day. The reason for the minor increase in the overall emissions from CDP 2011 to CDP 2012 is the inclusion of anaesthetic gases. The following also contributed to the increase in emissions as reported in CDP 2012:

• increase in full-time employees;• increase in beds in operation and bed days

sold; and• increase in square metre coverage.

In South Africa greenhouse gases such as HCFC22 (freon or R22) and R406 continue to be used as gas refills in air-conditioning and refrigerant equipment. They are, however, not included among Kyoto Protocol greenhouse gases as it is presumed that they and other HCFC gases are being phased out under the international

Montreal Protocol on Ozone Depleting Gases. While the GHG Protocol’s scope 1, 2 and 3 emissions are strictly for greenhouse gases that fall under the Kyoto Protocol, provision is made for separate reporting on other GHGs that might be under consideration by international treaties. Mediclinic Southern Africa’s data on these emissions for CDP 2012 are set out in Figure 34.

Mediclinic Southern Africa has five operational incinerators. Currently the carbon emissions caused by the activities of these incinerators are measured in the consumption of diesel usage. Mediclinic Southern Africa is currently in the process of investigating monitoring and measurement systems to verify and calculate the different pollutants. The timeline of the upgrade process of these incinerators is in line with the National Environmental Management Air Quality Act 39 of 2004.

A carbon emission reduction target in respect of scope 2 emissions of 3.09% was set for the electricity consumption of Mediclinic Southern Africa’s 52 hospitals for the reporting period. This reduction target is in line with the carbon emission reduction target of 34% by 2020 agreed on by South African government after COP15 at Copenhagen.


FiGure 32: TOTAL GREENHOUSE GAS FOOTPRINT (MEDICLINIC SOUTHERN AFRICA)

emission source cDp6 2008 cDp 2009 cDp 2010 cDp 2011 cDp 2012tonnes of co2e %

tonnes of co2e %

tonnes of co2e %

tonnes of co2e %

tonnes of co2e % áâ

Direct emissions from anaesthetics, ER24, pool cars, incinerators, generators and kitchen 13 008 8% 11 915 7% 11 804 7% 15 652 8% 19 826 10%

Indirect emissions from electricity 145 428 87% 141 356 88% 154 237 85% 154 298 83% 152 858 81%

Indirect emissions from company supply chain, business travel and waste removal 8 572 5% 7 677 5% 7 023 4% 7 903 5% 9 481 5%

Non-Kyoto Protocol 0 0% 0 0% 6 884 4% 8 584 4% 6 658 4%

total 167 008 100% 160 949 100% 179 948 100% 186 437 100% 188 824 100% á

kg co2e/bed day 110 104 112 113 111 â

FiGure 33: REPORTED DIRECT AND INDIRECT GHG EMISSIONS (MEDICLINIC SOUTHERN AFRICA)

Description cDp 2010 cDp 2011 cDp 2012 áâ

tonnes of co2e

scope 1: Direct emissions 11 803.60 15 652.43 19 829.14 á

Fuel used in ER24 (emergency vehicles) 2 587.09 3 446.53 3 900.30

Fuel used in generators 207.19 227.15 232.53

Fuel used in incinerators 130.84 116.22 147.09

Air-conditioning and refrigeration gas refills 631.56 1 445.16 1 985.13

Gas (N2O) utilised by anaesthetics 7 120.36 8 578.85 8 668.10

Anaesthetic gases utilised by anaesthetics Not reported Not reported 3 667.70

Gas (LPG) consumed in kitchens 176.37 188.97 167.80

Gas (CO2) consumed in the hospitals 5.71 5.84 6.49

Natural gas consumed in hospitals 8.05 10.36 10.04

Pool cars owned

936.44

1 530.98 971.26

Vehicle fleet owned 102.35 72.70

scope 2: indirect emissions from electricity purchased 154 237.28 154 298.33 152 858.00 â

scope 3: indirect emissions from supply chain, business travel and waste removal 7 022.70 7 902.89 9 481.33 á

Business travel in rental cars 92.48 102.68 112.79

Business travel in commercial airlines 1 325.87 1 100.80 1 127.13

Business travel in hotel accommodation 94.84 85.50 64.32

Travel claims (use of private vehicles for business purposes) 420.66 441.75 397.61

Third party: Pharmaceutical deliveries 1 812.82 2 710.24 3 071.19

Third party: Gas deliveries 539.80 320.25 611.45

Third party: Waste collections (normal and hazardous/medical) 432.88 607.01 351.04

Third party: Kitchen deliveries 1 530.20 1 329.94 3 071.05

Third party: Laundry deliveries 245.95 368.69 309.51

Consumption of office paper 527.20 583.26 365.24

Courier transportation Not measured 252.77 Excluded

total scope 1, 2 and 3 emissions (GhG protocol) 173 063.58 177 853.65 182 168.47 á

Non-Kyoto Protocol GHG emissions 6 883.94 8 583.51 6 658.21

totaL co2e eMissions 179 947.52 186 437.16 188 826.68 á


FiGure 34: DIRECT EMISSIONS FROM AIR CONDITIONING AND REFRIGERATION GAS REFILLS

tonnes of co2eDescription cDp 2010 cDp 2011 cDp 2012 áâ

R22 (freon) 6 840.03 8 571.85 6 605.36 â

R406 43.91 11.66 52.58 á

total non-Kyoto protocol GhG emissions 6 883.94 8 583.51 6 657.94 â

FiGure 35: TOTAL CARBON EMISSIONS (HIRSLANDEN) (PER CALENDAR YEAR)

2009 2010 2011 2012 áâ

tonnes co2e 8 930 9 310 9 100 9 879 á

Some of the measures implemented in Mediclinic Southern Africa to reduce its emissions include:

Behavioural change Further implementation of the ISO 14001:2004 Environmental Management System at 52 hospitals in Mediclinic Southern Africa.

Energy efficiency: building services

Further implementation of the combined heat pump solar project.

Further implementation of the replacement of fluorescent fittings at hospitals.

Monitoring and verification

Purchasing of advanced measuring and monitoring equipment to verify energy savings.

Fugitive emissions reductions

Scope 1: Via the ISO 14001:2004 Environmental Management System, a monitoring, measurement and operational control of air-conditioning gases will be implemented.

Scope 1: Via the ISO 14001:2004 Environmental Management System, a monitoring, measurement and operational control of anaesthetic gases (nitrous oxide) will be implemented.

SWITZERLAND

Strict legislation applies in Switzerland regarding NOx and SOx air emissions with which Hirslanden complies. Each household and company are required to conduct an external audit of its heating system on a regular basis (approximately biannually) measuring air emissions. The group’s total carbon emission per calendar year is illustrated in Figure 35. The year-on-year increase is in line with the expansion projects at various hospitals in the group, and further due to an increase in flights and a particular cold winter compared to the previous year.

WASTE MANAGEMENT AND RECYCLING Stringent protocols are followed to ensure that refuse removal within the Group complies with all legislation, regulations and by-laws. 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.

SOUTHERN AFRICA

By implementing waste management programmes and the ISO 14001 environmental management system, Mediclinic Southern Africa managed to reduce its healthcare risk waste to approximately 3 000 kg per month for a 200-bed hospital, i.e. approximately 1.1 kg per bed day sold. In a normal hospital environment, only 15% to 20% of waste is healthcare risk waste. This includes infectious, sharps, anatomical, pharmaceutical, chemical and radioactive waste. There is also other hazardous waste such as fluorescent tubes, batteries, mercury, used cooking oil and electronic waste.

All hazardous waste, including medical waste, is handled and disposed of in an environmentally safe manner and in compliance with national, provincial and municipal legislation. The group’s healthcare risk waste service providers and their


FiGure 36: WATER USAGE FROM WATER UTILITIES (KILOLITRES)

2009/10 2010/11 2011/12 2012/13Southern Africa 967 237 1 145 527 1 179 906 1 293 661Switzerland (per calendar year) 266 018 268 639 280 319 285 511UAE* 64 522 73 846 69 867 76 049total 1 297 777 1 486 794 1 530 092 1 655 221

* The 2012/13 water usage for Mediclinic Middle East also includes the eight clinics. In previous years, only the two hospitals’ water usage was reported.

vehicles are audited to ensure compliance with the environmental principle of “from cradle to grave”. The reduction of normal waste is achieved through recycling and waste separation programmes which also include optimal use of paper and printers and staff awareness training in compliance with ISO 14001:2004. Various monitoring and measurement programmes are tested at hospitals to determine the baseline for normal waste.

In terms of the National Waste Information Regulations issued in terms of the National Environmental Management: Waste Act, 59 of 2008, each of the group’s hospitals in South Africa must apply for registration on the South African Waste Information System with the Department of Environmental Affairs. The purpose of the regulations is to regulate the collection of data and information for purposes of the national waste information system, which will further enhance the Department of Environmental Affairs’ waste management planning and prioritisation. Mediclinic Southern Africa believes that compliance with these regulations not only assists the Department of Environmental Affairs in establishing structures for more effective recycling, recovery or treatment of waste, but will also encourage reduction, re-use and recycling of general waste and improve the management of hazardous waste and healthcare risk waste.

SWITZERLAND

Hirslanden complies with all applicable legislation regarding recycling, waste disposal and the treatment and transport of hazardous waste. All medical waste is treated as hazardous waste and onsite collection is separated from other waste categories. Only licensed transportation companies transport the hazardous waste to waste incineration stations. The weight and waste type are monitored and archived by the relevant hospital, transport provider and waste incineration station. Hirslanden recorded 22 297 tonnes of medical waste in 2010, 22 483 tonnes in 2011 and 23 029 tonnes in 2012. The quality of data is improving, with the collection of medical waste data commencing only in 2010.

UAE

Medical waste is handled by a professional waste removal firm to ensure minimum risk to the environment. Mediclinic City Hospital also has an ongoing contract with a recycling company to collect recyclables such as waste paper, old corrugated cardboard, plastics and cans from the premises. Overall, Mediclinic City Hospital achieved a reduction in general waste and medical waste per bed day during the period, and was able to recycle more of this waste. The total recycled weight increased from an average of 3.529 tonnes per month during the previous reporting period to an average of 4.71 tonnes per month during the year. Recycled material includes paper, plastic, cardboard and cans. Mediclinic City Hospital appointed a new recycling company from April 2013 with the aim of improving the amount of waste that is recycled.

WATER CONSUMPTION AND RECYCLING The total volume of water withdrawn from water utilities throughout the Group is provided in Figure 36.

SOUTHERN AFRICA

During the reporting period Mediclinic Southern Africa continued with its initiatives to reduce water consumption, which include employee awareness training, monitoring of uncontrolled leakages and monitoring garden irrigation cycles. The increase in water consumption can be contributed to the increase in bed days sold, major building projects in progress at hospitals and faulty water meters in the previous financial year which has been corrected in the year under review.

Water discharged at Mediclinic Southern Africa’s operations is defined as industrial effluent, which is mostly sewerage. Various hospitals have applied for registration further to a drive by local authorities for effluent registration. Some registrations have been confirmed during the year.


SWITZERLAND

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. The volume of waste water discharged by Hirslanden equals the full volume of water withdrawal. Various measures are in place to monitor and reduce water consumption throughout the group – at Klinik Am Rosenberg the water consumption projects have included a reduced amount of water in the toilet tanks, installation of water-flow limiters at water taps and the replacement of the kitchen dishwasher, which resulted in the reduction of its water consumption from 12 788 kl in 2010 to 12 102 kl in 2012. During the year, Klinik Belair and Klinik Permanence also installed water-flow limiters at the water taps. Hirslanden Klinik Aarau replaced several water-cooled systems by air cooling.

UAE

At Mediclinic Middle East various measures are in place to minimise water consumption, such as monitoring of water usage in specific areas such as gardens and kitchens, installation of control sensors on taps in hospital wards, reducing pressure of water points, and recycling of water for irrigation purposes. With these measures in place, the hospitals’ water consumption increased by only 2.35% despite a 20% increase in bed days sold at Mediclinic City Hospital and a 1% increase in bed days sold at Mediclinic Welcare Hospital. The volume of waste water discharged by Mediclinic Middle East equals the full volume of water withdrawal.

ENERGY CONSERVATION The direct and indirect energy consumption for the Group is illustrated in Figure 37 for the period under review. The main sources for direct energy consumption are gas/diesel oil, motor gasoline, liquefied petroleum gas and natural gas. Indirect energy sources refer to electricity consumption.

Energy is a key risk across all three operating platforms of the Group. Various energy conservation and cost-efficient initiatives are implemented throughout the Group, examples of which are provided below.

SOUTHERN AFRICA

• The electricity consumption at Mediclinic Southern Africa decreased by 2% during the year, despite an increase in bed days sold, number of full-time employees and square metre coverage during the reporting period.

• Implementation of ISO 14001 management standards had a positive effect on reduction of energy consumption and also improves staff awareness.

• During the year a commitment was made to replace inefficient air-conditioning plants at five of the group’s largest electricity-consuming facilities. The replacement at three facilities is in progress.

• After re-evaluation of the solar/hybrid technology for water heating installations at 32 sites, it was decided due to the change in the value of the return on investment, to cancel 30 sites.

• The group’s Energy Initiative Committee measures the energy utilisation within the group to determine where savings can be achieved and it evaluates various new energy-efficient and renewable technologies. Various projects

FiGure 37: DIRECT AND INDIRECT ENERGY CONSUMPTION (GIGAJOULES)Direct energy

purchasedDirect energy

producedindirect energy

consumedtotal energy consumption

2010/11 2011/12 2012/13 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13 áâ

Southern Africa* 79 881 78 253 88 021 0 0 0 523 289 547 896 536 927 603 170 626 149 624 948 á

Switzerland**

(per calendar year) 93 192 87 762 102 847

127(solar

collectors)

112 (solar

collectors)

112 (solar

collectors) 101 334 107 126 116 343 194 653 195 000 219 302 á

UAE*** 19 1 563 1 773 0 0 0 51 860 51 466 62 929 51 879 53 029 64 702 á

* The increase in Mediclinic Southern Africa’s direct energy purchased is attributable to an increase in aviation fuels with ER24 increasing the number of helicopters from three to five and the number of fixed-wing aircraft from zero to three during the year. The decrease in indirect energy consumed is as a result of the decrease in electricity consumption achieved.

** The data in respect of Hirslanden are for the 2010 and 2011 calendar years. Since 2011, the data include energy consumption of the Hirslanden Head Office and Klinik Stephanshorn, which are excluded in the 2010 data. The increase in energy consumption from 2011 to 2012 are mainly due to the increase in the number of operational beds, an increase in patient admissions and a particularly cold winter compared to 2011.

*** The 2012/13 energy usage for Mediclinic Middle East also includes the eight clinics. In previous years, only the two hospitals’ energy usage was reported.


were completed in the past financial year, such as the replacement of fluorescent lights at Mediclinic Constantiaberg and Mediclinic Hoogland; and the installation of 15 domestic heat pumps at Mediclinic Hoogland to reduce the energy load to heat water.

• Mediclinic Southern Africa also participated in the energy barometer project whereby the energy consumption of 50 hospitals was evaluated against common energy drivers. The purpose of this evaluation is to identify the facility with the highest energy intensity in order to focus energy-saving initiatives.

SWITZERLAND

• The ratio of renewable energy consumed as a percentage of total energy consumption increased from 8.55% in 2011 to 16% in 2012 with some of the group’s hospitals purchasing 100% renewable energy. Klinik Am Rosenberg also operates a solar thermal heat collector with a capacity of 31 MWh, which has led to a reduction in gas consumption

• Klinik St. Anna, Klinik Im Park and Klinik Hirslanden implemented energy-reduction measures within the ventilation systems.

• Klinik Permanence and Klinik Belair have replaced some lighting with energy-efficient LED lighting.

• Energy-efficient refrigeration was installed at Klinik Birshof.

UAE

• At Mediclinic City Hospital electricity consumption increased by only 2%, even though there was a 20% increase in bed days. This is mainly due to the installation of automatic lights and movement sensors in the outpatient department consulting rooms and all bathrooms.

• At Mediclinic Welcare Hospital, electricity consumption increased by only 0.63% in line with the increase in bed days sold.

MATERIAL USEDuring the year more Mediclinic Southern Africa hospitals have become mercury free, with 29 of the group’s 39 ISO 14001-certified hospitals mercury free. In the procurement of new equipment,

mercury-free equipment is purchased. Mercury disposal is done according to a corporate environmental procedure with records kept of all mercury disposals.

BIODIVERSITYAll new building projects in Mediclinic Southern Africa are undertaken only after an environmental impact assessment has been performed when required by legislation. In order to obtain accurate data, all new projects by Mediclinic Southern Africa will include an investigation to determine the location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. It is expected that this process will enable the group to have precise data within the next three years.

None of the facilities of Hirslanden and Mediclinic Middle East are owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

COMPLIANCEThere were no incidents of material non-compliance with any environmental laws, regulations, accepted standards or codes applicable to the Group, with no significant fines being imposed during the year.

MeDicLinic weLcoMes Your FeeDBacKThe Group is committed to being a good corporate citizen and values the opinions and suggestions of all our stakeholders. You are invited to give us your feedback on this report or on any matter relating to the Group’s sustainable development practices. A sustainable development survey is also published on our website and we invite you to take a few minutes of your time to complete this survey. For any enquiries relating to the group’s sustainability issues, please contact:

L Heerink-SmitTel: +27 21 809 6500Fax: +27 21 809 6703E-mail: [email protected] address: Mediclinic Offices, PO Box 456, Stellenbosch, 7599 Website: www.mediclinic.com


annexure: Gri G3.1 DiscLosure inDexThe disclosure index below identifies the location of the standard disclosures required by the G3.1 Sustainability Reporting Guidelines developed by the Global Reporting Initiative (“GRI G3.1”), although all may not be entirely in accordance with the GRI guidelines. This report, read with the integrated annual report of the Company in respect of the financial year ended 31 March 2013, meets the requirements for an application Level C in terms of the GRI requirements.

The references included in the index refer to sections of this Sustainable Development Report or the Company’s integrated annual report in respect of the financial year ended 31 March 2013, also published on the company’s website at www.mediclinic.com.

GRI G3.1 disclosure reference Description Section of annual report

Page reference

strateGY anD anaLYsis1.1 CEO statement on sustainability Integrated Annual Report:

– Chief Executive Officer’s Report 20 – 251.2 Key impacts, risks and opportunities Integrated Annual Report:

– Strategic Objectives– Chief Executive Officer’s Report– Clinical Services Report – Risk Management Report – Social and Ethics Committee Report

Sustainable Development Report: – Key priorities: Performance against objectives

1420 – 2555 – 7779 – 8394 – 95

5– 8orGanisationaL proFiLe

2.1 – 2.8 Name; primary brands, products and services; operational structure; location of headquarters; countries where organisation operates; nature of ownership and legal form; markets served; scale of the organisation

Integrated Annual Report:– Organisational Overview

Sustainable Development Report: – Organisational structure

6 – 9

2 – 32.9 Significant changes regarding size, structure or ownership Integrated Annual Report:

– Report profile

Annual Financial Statements– Directors’ Report

1

4 – 62.10 Awards received during reporting period Sustainable Development Report:

– External recognition and achievements 4

report paraMetersreport profile3.1 – 3.4 Reporting period; date of previous report; reporting cycle;

contact personIntegrated Annual Report:– Report profile

Sustainable Development Report: – Scope and boundary of report– Mediclinic welcomes your feedback

1

1 66

3.5 – 3.8 Process for defining report content; boundary of the report; limitations on scope or boundary of report; basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other entities

Integrated Annual Report:– Report profile

Sustainable Development Report: – Scope and boundary of report

1

1

3.9 Data measurement techniques and bases of calculations Not reported –3.10 Explanation of the effect of any restatements of information

provided in earlier reports Annual Financial Statements:– Segmental Report

56

3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied

Not applicable –

Gri content index3.12 Location of the standard GRI disclosures Sustainable Development Report:

– GRI G3.1 Disclosure Index 67 – 71

assurance3.13 Policy and practice regarding external assurance Integrated Annual Report:

– Report profile

Sustainable Development Report: – Assurance

1

9

GoVernance, coMMitMents anD enGaGeMentGovernance4.1 – 4.3 Governance structure of the organisation, including Board

committees; indication if Chairman also executive; number of independent and/or non-executive Board members

Integrated Annual Report:– Corporate Governance Report

85 – 93

4.4 Mechanism for shareholders and employees to provide recommendations to Board

Sustainable Development Report: – Engagement with our stakeholders:

Employees and trade unions; Investors

12 – 26

4.5 Linkage between compensation for Board members, senior managers and executives and the organisation’s performance

Integrated Annual Report:– Remuneration Report

115 – 118

4.6 Processes of Board to ensure conflicts of interest are avoided

Integrated Annual Report:– Corporate Governance Report:

Conflicts of interests

92

4.7 Process for determining the qualifications and expertise of Board members for guiding the organisation’s strategy on economic, environmental and social topics

Integrated Annual Report:– Corporate Governance Report: Board, committee

and director evaluations

87 – 88

4.8 – 4.9 Internally developed statements of mission or values, codes of conduct and principles relevant to economic, environmental and social topics; procedures of Board for overseeing the organisation’s identification and management of economic, environmental and social performance

Integrated Annual Report:– Our vision– Our values– Social and Ethics Committee Report

Sustainable Development Report: – Management approach– Ethics and compliance

12 13 94 – 95

10 10 – 12



Page reference

commitments to external initiatives4.10 Processes for evaluating Board’s own performance,

particularly with regard to economic, environmental and social performance

Integrated Annual Report:– Corporate Governance Report: Board, committee and director evaluations

87 – 88

4.11 Whether and how precautionary approach or principle is addressed

Integrated Annual Report:– Risk Management Report

79 – 83

4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organisation subscribes or endorses

Sustainable Development Report: – Reporting principles– External recognition and achievements– Assurance

2 4 9

4.13 Memberships in associations Sustainable Development Report: – Engagement with our stakeholders: Industry

associations

23 – 25

stakeholder engagement4.14 – 4.17 List of stakeholder groups engaged by organisation; basis

for identification and selection of stakeholders with whom to engage; approaches to stakeholder engagement; key topics and concerns that have been raised through stakeholder engagement and how organisation responded

Sustainable Development Report: – Key priorities: Performance against objectives– Engagement with our stakeholders

5 – 8 12 – 26

ManaGeMent approach anD perForMance inDicators (core indicators in bold)environmentalMaterialsen1 en2

Materials used by weight or volume; percentage of materials used that are recycled input materials

Not reported –

Energyen3en4EN5EN6EN7

Direct energy consumption by primary energy source; indirect energy consumption by primary source; energy saved due to conservation and efficiency improvements; initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives; initiatives to reduce indirect energy consumption and reductions achieved

Sustainable Development Report: – Environmental performance: Energy conservation

65 – 66

Wateren8EN9EN10

total water withdrawal by source; water sources significantly affected by withdrawal of water; percentage and total volume of water recycled and reused

Sustainable Development Report: – Environmental performance: Water consumption

and recycling

64 – 65

Biodiversityen11 en12EN13EN14EN15

Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas; description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas; habitats protected or restored; strategies, current actions, and future plans for managing impacts on biodiversity; number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk

Sustainable Development Report: – Environmental performance: Biodiversity

66

Emissions, effluents and wasteen16en17EN18en19en20en21en22en23EN24EN25

total direct and indirect greenhouse gas emissions by weight; other relevant indirect greenhouse gas emissions by weight; initiatives to reduce greenhouse gas emissions and reductions achieved; emissions of ozone-depleting substances by weight; no, so, and other significant air emissions by type and weight; total water discharge by quality and destination; total weight of waste by type and disposal method; total number and volume of significant spills; weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally; identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation’s discharges of water and runoff

Sustainable Development Report: – Environmental performance: Emissions; Waste

management and recycling

60 – 64

Products and servicesen26 initiatives to mitigate environmental impacts Sustainable Development Report:

– Environmental performance 58 – 66

en27 products sold and their packaging materials reclaimed Not applicable –Complianceen28 Monetary value of fines and number of non-monetary

sanctions for non-compliance with environmental laws and regulations

Sustainable Development Report: – Environmental performance: Compliance

66

TransportEN29 Significant environmental impacts of transporting products

and other goods and materials used for the organisation’s operations, and transporting members of the workforce

Not applicable –

OverallEN30 Total environmental protection expenditures and

investments by typeNot reported –



Page reference

social: human rightsInvestment and procurement practices

hr1hr2

percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening; percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken

Not reported –

HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

Sustainable Development Report: – Broad-based black economic empowerment:

Employment equity

31

Non-discrimination

hr4 total number of incidents of discrimination and actions taken

Sustainable Development Report: – Our people: Diversity and equal opportunities

45

Freedom of association and collective bargaining

hr5 operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights

Sustainable Development Report: – Our people: Labour relations and working

conditions

39 – 41

Child and forced/compulsory labour

hr6 hr7

operations and significant suppliers identified as having significant risk for incidents of child labour, and measures taken to contribute to the effective abolition of child labour; operations and significant suppliers identified as having significant risk for incidents of forced/compulsory labour, and measures taken to contribute to the elimination of all forms of forced/compulsory labour

Not applicable –

Security practices

HR8 Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations

Not applicable –

Indigenous rights

HR9 Total number of incidents of violations involving rights of indigenous people and actions taken

See HR4 above 45

Assessment

hr10 percentage and total number of operations that have been subject to human rights reviews and/or impact assessments

Sustainable Development Report: – Broad-based black economic empowerment

30 – 33

Remediation

hr11 number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms

See HR4 above 45

social: Labour practices and decent workEmployment

La1La2

total workforce by employment type, employment contract and region, broken down by gender; total number and rate of new employee hires and employee turnover by age group, gender and region

Sustainable Development Report: – Our people: Employee composition and turnover

rate

38 – 39

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations

Integrated Annual Report: – Remuneration Report

Sustainable Development Report: – Our people: Employee recruitment, retention and

remuneration (Figure 20)

115 – 118

41 – 44

Labour/management relations

La4La5

percentage of employees covered by collective bargaining agreements; minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements

Sustainable Development Report: – Our people: Labour relations and working conditions

39 – 41

Occupational health and safety

LA6La7La8LA9

Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programmes; rates of injury, occupational diseases, lost days, and absenteeism and number of work-related fatalities by region; education, training, counselling, prevention and risk control programmes in place to assist workforce members, their families or community members regarding serious diseases; health and safety topics covered in formal agreements with trade unions

Sustainable Development Report: – Our people: Health and safety at work

45 – 48

Training and education

La10LA11LA12

average hours of training per year per employee by employee category; programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings; percentage of employees receiving regular performance and career development reviews, by gender

Sustainable Development Report: – Training and skills development

48 – 54

Diversity and equal opportunity

La13 La14

composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity; ratio of basic salary of men to women by employee category


44 – 45



Page reference

social: societyCommunity

so1 percentage of operations with implemented local community engagement, impact assessments and development programmes

Sustainable Development Report: – Engagement with our stakeholders – Investing in the community

12 – 26 54 – 58

so9 operations with significant potential or actual negative impacts on local communities

Not applicable –

so10 prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities

Not applicable –

Corruption

so2 so3so4

percentage and total number of business units analysed for risks related to corruption; percentage of employees trained in organisation’s anti-corruption policies and procedures; actions taken in response to incidents of corruption

Sustainable Development Report: – Ethics and compliance: Fraud and corruption

10 – 11

Public policy

so5 public policy positions and participation in public policy development and lobbying

Integrated Annual Report: – Operational reviews

Sustainable Development Report: – Stakeholder engagement: Government and

authorities – Economic impacts: Healthcare reform

36 – 53

21 – 23 35 – 36

SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country

Sustainable Development Report: – Ethics and compliance: Fraud and corruption

10 – 11

Anti-competitive behaviour

SO7 Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes

Sustainable Development Report: – Ethics and compliance: Competition

11

Compliance

so8 Fines and non-monetary sanctions for non-compliance with laws and regulations

Sustainable Development Report: – Ethics and compliance: Compliance

12

social: product responsibilityCustomer health and safety

pr1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures

Integrated Annual Report: – Clinical Services Report

Sustainable Development Report: – Quality of care and facilities

55 – 77 26 – 29

PR2 Incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes


12

Product and service labelling

pr3 type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements

Not applicable –

PR4 Incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes

Not applicable –

PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction

Sustainable Development Report: – Key priorities: Performance against objectives

(Priority 1)– Engagement with our stakeholders: Patients – Quality of care and facilities: Patient satisfaction

613 – 15 29

Marketing communications

pr6 programmes for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion and sponsorship

Integrated Annual Report: – Risk Management Report – Corporate Governance Report

79 – 83 85

PR7 Incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship by type of outcomes


12

Customer privacy

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data

Sustainable Development Report: – Ethics and compliance: Customer privacy

11

Compliance

pr9 Monetary value of fines for non-compliance with laws and regulations concerning the provision and use of products and services


12



Page reference

economicEconomic performance

ec1 Direct economic value generated and distributed. Integrated Annual Report: – Value Added Statement

5

ec2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change

Sustainable Development Report: – Environmental performance: Environmental

management and risk assessment; Emissions

58 – 63

ec3 coverage of the organisation’s defined benefit plan obligations

Integrated Annual Report: – Remuneration Report


remuneration

115 – 118

41

ec4 significant financial assistance received from government Sustainable Development Report:– Engagement with our stakeholders: Government

and authorities

21

Market presence

EC5 Range of ratios of standard entry-level wage compared to local minimum wage at significant locations of operation


remuneration

41 – 44

ec6 policy, practices, and proportion of spending on locally based suppliers at significant locations of operation

Sustainable Development Report: – Engagement with our stakeholders: Suppliers

17 – 19

ec7 procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation


44 –45

Indirect economic impacts

ec8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement

Sustainable Development Report: – Investing in the community

54 – 58

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts

Sustainable Development Report: – Economic impacts

33 – 37


coMpanY naMe anD reGistration nuMBerMediclinic International Limited1983/010725/06

heaD oFFice aDDress anD reGistereD oFFiceMediclinic Offices, Strand Road, Stellenbosch, 7600Postal address: PO Box 456, Stellenbosch, 7599Tel: +27 21 809 6500 Fax: +27 21 886 4037Ethics Line: 0800 005 316 or [email protected]

e-MaiL anD [email protected] www.mediclinic.com

DirectorsDr E de la H Hertzog (Chairman), DP Meintjes (Chief Executive Officer), CI Tingle (Chief Financial Officer), JJ Durand, JA Grieve (Scottish), Prof Dr RE Leu (Swiss), Dr MK Makaba, N Mandela, TD Petersen, KHS Pretorius, AA Raath, DK Smith, PJ Uys, Dr CA van der Merwe, Dr TO Wiesinger (German)

coMpanY secretarYGert Hattingh

inVestor reLations contactsChief Financial Officer: Craig Tingle – [email protected] Corné Heyns – [email protected]

transFer secretariesComputershare Investor Services Proprietary Limited70 Marshall Street, Johannesburg, 2001Postal address: PO Box 61051, Marshalltown, 2107Tel: +27 11 370 7700 Fax: +27 11 688 7716

auDitorPricewaterhouseCoopers Inc.Stellenbosch

sponsorRand Merchant Bank (a division of FirstRand Bank Limited)

ListinGJSE LimitedSector: Non Cyclical Consumer Goods – HealthShare code: MDC ISIN code: ZAE000074142

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