Interview: HMi meets . . . Ronnie van der Merwe of Mediclinic International

Ronnie van der Merwe, chief executive, Mediclinic

Ronnie van der Merwe, group chief executive of Mediclinic International talks strategy, the challenges of managing across the globe and how the group has navigated Covid

Mediclinic is an international private healthcare services group powerhouse. Founded in South Africa in 1983, it has divisions in Switzerland, Southern Africa (South Africa and Namibia), and the UAE, as well as a significant stake in the UK’s Spire Healthcare.

Listed on the London Stock Exchange, Mediclinic’s Southern Africa operations include 51 hospitals (three in Namibia), eight sub-acute and specialised hospitals and 11 day case clinics. Its Swiss arm, Hirslanden, operates 17 hospitals and four day case clinics while Mediclinic Middle East operates seven hospitals, two day case clinics and 18 outpatient clinics with more than 900 inpatient beds in the UAE as well as (under management contracts) one hospital in Abu Dhabi and a 200-bed hospital in Saudi Arabia which is expected to open next year.

The group is headed by Ronnie van der Merwe. A qualified anaesthesiologist in private practice, he appears almost to be the Platonic ideal of a healthcare chief executive. He listens to questions, weighs up his answers and exudes a deep passion for the sector and for his company.

This ease comes from a very solid base of knowledge. He joined the company in 1999 as chief clinical officer. He was then an executive director of Mediclinic International from 2010, up to the reverse takeover of Al Noor Hospitals Group. He was then appointed as group chief executive in June 2018 and also serves as a non-executive director of Spire.

Here he talks about how the group has navigated the Covid-19 pandemic and his plans for the future.

 

The following transcript of HMi’s interview with Ronnie van der Merwe has been edited for brevity and clarity.

 

HMi: You reported an uptick in revenues in Q3. How have you navigated the coronavirus?

RVDM: If you look at the beginning of the very strict pandemic lockdown and the suspension of elective surgery this was really quite detrimental. April last year was a tough month for us. After that and once those restrictions were lifted, we could start to work again.

The most important thing for us was to strike the balance between dealing with Covid cases in the same hospital as we do our emergency surgery, as well as our elective work. That took us several months for everybody really to get to grips with doing all of those things in the same facility. That was making the best of a difficult situation, and we seem to have been able to do that reasonably well.

HMi: Speaking organisationally, Switzerland is not the same as South Africa which is very different from the UAE. How did you manage this as a group?

RVDM: Luckily for me, I have three very strong divisional management teams; one in Switzerland, one in the UAE and one in southern Africa. All are very seasoned managers who have very strong relations with the government and strong operational results.

But we also have a central structure, through which we share base knowledge practices on how to do things and how to cope. For example, if part of the hospital is full of Covid-19 cases and another part is Covid free, what’s the best way to do it?

A lot of that sharing has been taking place because initially nobody really knew how we were going be able to keep all of these places. We quickly learned many lessons and you could clearly see that the length of stay of these cases became much shorter as we moved along.

We had the company’s three different divisions on Zoom, talking to one another about the best approaches, what we had learned and what was the current evidence. There was a huge amount of exchange with regards to what would be the best way to treat these patients. Now everybody is really well-versed in managing these cases. It has been an incredible journey.

HMi: You have made a point in your various earnings releases to thank the staff. How difficult has it been to maintain morale?

RVDM: The first thing is, obviously, to communicate. And to make it known how I feel about this and how appreciative I am of what the people are doing. But another thing is, you know, you can’t be phoney.

Luckily for me in my previous life, I was an anaesthesiologist and I used to run the intensive care unit. I did not have to put on PPP clothing every single day, but I do know about living in constant fear. I had to treat some patients who were very contagious. That was many years ago and I remember that constant fear of ‘I’m also going to get sick’.

I can associate to a certain extent [with my staff] which gives us the opportunity when we communicate not to be phoney. I really mean it when I say that these people are extremely brave, resilient and they keep going. It’s amazing.

HMi: What’s your long-term strategy in Switzerland?

RVDM: Our long-term strategy is to get involved in the continuum of care, in other words, not only to run acute care inpatient hospitals and to be a collection of hospitals but also to become a healthcare system. That reduces fragmented care. As we become involved in this we don’t need to own and operate everything.

We can also partner. One of the most significant things we’ve done in Switzerland is to partner with Medbase, the subsidiary of Migros, which specialises in primary healthcare. They look after these services, and we manage the inpatients and day cases in our hospitals and day surgery clincis and we run the radiology activities in their clinics. The arrangement is not exclusive because Medbase covers all of Switzerland and we are not everywhere, but that creates a smooth flow of patients through the different care settings.

Obviously, you can’t expect preferential treatment from these primary care providers, you have to earn your keep, but the mere fact that we have this relationship opens up all sorts of opportunities. That’s just one example and we are busy working on quite a few other partnerships.

HMi: You hold a 29.9% interest in Spire Healthcare. Are you committed to the UK for the long term or do you expect to pull out?

RVDM: At the moment we are a supportive shareholder, and we re-evaluate the situation quite often.

As operators, it is not really a natural position for us to be in to be a minority shareholder in a business.

Over the past few years, we have had so many other operational priorities that we really wanted to focus on. At the moment, we think that there are good opportunities in the medium and long term in the UK market but this is where we are now.

HMi: No one wants to see the silver lining in Covid, but is now a good time for expansion?

RVDM: To a certain extent, you’re right. But there are still some players who have high expectations of what they think they are worth. We look and scan the horizon all the time.

We have a small team that looks at growth, and we’re looking at quite a few different territories at the moment.

What we are very cautious of is to go and buy a big business at a very full price.

We’ve been looking at quite a few opportunities but none [yet] where we have thought ‘this is the one to go for’.

HMi: What are your short-term priorities?

RVDM: There are four things for me. The first is that we’re not going to rest on our laurels until we’ve got Covid out of the way. We need to keep focusing on keeping people going, on morale, and maintaining momentum. That’s important.

Secondly, we need to restore the profitability of the organisation to pre Covid levels.

Third is to execute on our strategy, the one that we’ve communicated – the continuum of care, digital transformation and innovation. Those are the main focus areas of our strategy. And fourthly, really to work together as a group, because we don’t want to be a collection of businesses.

We want to be a collective, where one plus one plus one becomes four. That’s a long-term priority for the company, but the priority for me is to get everybody to work in concert for the betterment of the entire organisation.