IHH Healthcare Berhad | Annual Report 2024 100 There is a centralised Procurement function in each country for negotiation of important contracts, manage suppliers, and control of the country’s product catalogue. This ensures adherence to the Group Procurement Guidelines and provides economies of scale during negotiations. The Group Procurement Office (GPO) manages key vendors, negotiates major CAPEX expenditures and owns the Tender process. Important contracts are approved through a governance structure composed of Management Committee, Steering Committee, or Board of Directors committee, whichever is appropriate depending on the Limit of Authority framework approved by the Board of Directors. In addition, the GPO office is responsible for conducting group synergies projects in Procurement and supply chain processes. Legal and Regulatory The business units adhere strictly to the applicable Acts and Regulations, as required of an institution operating private hospitals, medical clinics, private higher education, and healthcare services. This includes the established Acts and Regulations applicable in the jurisdictions in which the Group operates. Clinical audits are also conducted by the Medical Affairs and Ǫuality Division on an ongoing basis. Fraud Prevention The Board strives to have zero incidences of fraud with strong internal controls, proper segregation of duties in the work processes, and regular audits carried out by the Group Internal Audit (GIA) team. The inherent system of internal controls is designed to provide a reasonable, though not absolute, assurance against the risk of fraud, material errors or losses. Clinical Governance International Clinical Governance Advisory Council (ICGAC) In its ninth year as an independent high-level advisory committee, the Council continues to serve as an advisory in the areas of Clinical Governance which covers the management of Clinical Affairs, including Ǫuality and Patient Safety, Clinical Risk Management, Continuing Professional Development and Clinical Training. The Council comprises the following members: 1. Tan Sri Dato’ Dr Abu Bakar Suleiman, Chairman, International Medical University (IMU) Group, Malaysia 2. Tan Sri Datuk Dr K. Ampikaipakan, Consultant respiratory physician at Pantai Hospital Kuala Lumpur, Malaysia 3. Professor Yeoh Eng Kiong, Director at the JC School of Public Health and Primary Care of The Chinese University of Hong Kong (CUHK), Hong Kong 4. Dr Narottam Puri, Principal Advisor, Quality Council of India, Advisor (Medical Operations) at Fortis Healthcare, India 5. Professor Dr. Metin Cakmakci, Professor of General Surgery at Acibadem Atasehir Hospital, Türkiye 6. Professor Dr. Kandiah Satkunanantham, Emeritus Professor in Orthopedic Surgery at the National University of Singapore (NUS) and Emeritus Consultant at the National University Health System (NUHS), Singapore As of December 31, 2024, Management has achieved noteworthy advancements in the implementation of the recommended actions outlined by the ICGAC: 1. Strengthening the overall Clinical Governance framework, through defining the roles and responsibilities of key committees and personnel with regards to clinical governance: (a) Established country-level Clinical Governance Committees for refining Clinical Quality Indicators (CQIs) and Serious Reportable Events (SREs) (b) Strengthened Antimicrobial Stewardship Programs (ASPs) across hospitals to promote responsible antimicrobial use (c) Developed a Clinical Risk Assurance Framework emphasizing proactive clinical risk management. (d) Implemented the “Just Culture” model to balance accountability and system improvements in risk management (e) Enhanced compliance with international accreditation standards like Joint Commission International (JCI) and Malaysian Society for Quality in Health (MSQH), with proactive internal audits focusing on high-risk areas. 2. Pioneering Sustainability Initiatives: (a) Piloted the reduction of gown use for Methicillin-Resistant Staphylococcus aureus (MRSA) / Vancomycin-Resistant Enterococci (VRE) patients under modified contact precautions in IHH MY hospitals, supported by high hand hygiene compliance and strict infection control protocols (b) Explored innovative practices for infection prevention and sustainability 3. Integration of AI in Healthcare Operations: (a) Advanced AI applications in diagnostics (e.g., chest X-rays, CT brain scans) and operational efficiencies (b) Developed a governance framework for AI to ensure ethical, compliant, and effective integration 4. Focus on Value-Based Care Initiatives that combine quality improvement with cost management, leveraging strategies to align costs while maintaining care quality and bundle payment models. 5. Cultural and Leadership Engagement: (a) Implemented a “Speak-Up” policy to empower staff to report safety concerns proactively, with training incorporated into new staff orientation (b) Launched initiatives to foster a safety culture, including leadership advocacy and real-life training materials 6. New initiatives including encouraging research and innovation culture through implementation of the IHH Research and Innovation Grant to be implemented in 2025. Statement on Risk Management and Internal Control Governance
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