Comprehensive annual financial planning enables Mediclinic Group to make data-driven decisions that bolster financial health

Every day, healthcare teams at the Mediclinic Group touch countless patients’ lives. With increased competition in the global healthcare sector and ongoing regulatory changes, Mediclinic — a diversified healthcare services group operating more than 130 hospitals, clinics, and other facilities in Southern Africa, the Middle East, and Switzerland — faces constant pressure to deliver maximum efficiency.

For healthcare providers, employee benefit and contract costs typically comprise 60% of operating expenses. A further 20% of spending usually goes for medicines and consumables, which leaves a narrow margin for all other spending.

The healthcare services industry is changing. “The migration of inpatient cases to outpatient care settings puts pressure on margins,” explains Pierre de Villiers, Group Financial Manager at Mediclinic. “Management needs to make quick decisions on how capital is allocated, and our financial planners need to work in an agile manner to understand how changes impact the bottom line.”

After diagnosing its financial planning, corporate budgeting, and workforce budgeting issues, Mediclinic assembled a team of 30+ people to search for an effective cure. From a shortlist of four vendors, they chose Anaplan based on its market leadership and user-friendly interface.

• Mediclinic developed a budgeting process it calls Annual Financial Planning (AFP). The AFP process is used across all business units of Mediclinic Group and are comprised of three elements: Planning, budgeting, and forecasting (PBF) models, workforce budgeting, and a mid-term plan (MTP) that looks out five years and can be scaled up to 10 years.
• The Anaplan models comprising the AFP are all connected.
• With Anaplan, Mediclinic Group’s finance team has transformed the way they engage with the company’s three business divisions. “If I can work together with my colleagues across all of the different departments, we can get a much better answer and solution,” de Villiers explains, and that collaboration is built into Mediclinic’s Anaplan environment. “There’s a lot less manual tasks, and a lot more integrity in the data. Working in this way, we have significantly reduced the time to define and compile an accurate budget.”
• The finance team is also able to test scenarios by changing assumptions in the Anaplan models and immediately seeing the financial effects. “Anaplan helps business make the right decisions in an ever-changing environment,” de Villiers says.
• Mediclinic has also improved data consistency across its business through use of Anaplan. “In our three business divisions we have standardized the formulas for how we determine revenue and cost,” says de Villiers. “And it’s done on a granular level — for example, we now budget revenue by doctor and hospital, which helps us to plan with a lot more accuracy.”
• With this solid foundation, the Mediclinic Group is setting ambitious goals for the next stage of its Anaplan journey. “We are busy building an Anaplan model for our five-year plans,” concludes de Villiers. “It really excites me that we can have one model, compiled at the right level of granularity, where we can quickly see how changes in our strategy will play out in our business plan.”

• Increased collaboration and consistency across three business units reduces manual work
• Greater data granularity supports planning and decision-making at the right level
• Scenario modeling enables teams to immediately see the impact of decisions

Source: Anaplan