It’s not easy to dismiss the carnage of the coronavirus outbreak that has taken the entire world by storm. But the seriousness to end the shut-in nightmare caused by the pandemic cannot be brushed aside. The teeny virus has caused the global economy to take a nosedive, not to mention the healthcare industry positioned at the forefront of the outbreak has suffered a body blow.

Let’s hear it out from the experts what the healthcare industry will inherit from this pandemic.

Dr Vivek Desai, Founder Director of HOSMAC India

Irony of of this pandemic is that— COVID-19 needs healthcare and yet it is hurting healthcare. Pre-pandemic too, hospital margins was shrinking due to regulations and price capping, which ate into the EBITA. Just when its profitability was beginning to look up, with the consolidations or securing high-volume, low-cost model, the novel coronavirus came knocking. This is a double whammy situation for the hospitals; you cannot refuse patients at this crucial time and must treat them either at low or totally free of cost, as advised by Government. It is also promulgated that many hospitals like Saifee, Wockhardt, Jaslok, Nanavati are closing down and will probably to be used by the Government. This has hit us bad. We will certainly drift in recession and it may take atleast 6-9 months for the hospitals to reboot once again. It goes without saying that the moment hospital goes down, it takes every other sectors of healthcare down with it. Biomedical industry still has some role to play with exorbitantly high demand for imaging, medical furniture, ventilators etc. The first quarter of this fiscal year is completely washed-out, inkling at future cost-cutting, downsizing, or pay-cuts by keeping the headcount intact or a credit line that can be encashed later. The newer chain of projects or small hospitals are going to be the most affected. The future investments will definitely be on training, research, public healthcare infrastructure and technology.

Vishal Bali, Executive Chairman, Asia Healthcare Holdings

The world has experienced a series of pandemics (SARS, Swine flu MERS, Ebola) but none turned from a healthcare crisis to a global financial crisis. COVID-19 has sent a chilling reminder that we live in an inter-connected world of public healthcare where a global pandemic can drag the world to a recession. The International Monetary Fund predicts that the aftermath of COVID-19 will contract the global GDP by 3% with GDP/Capita shrinking across 170 nations. IMF has also predicted that the impact of the corona virus will leave India with a 1.9% GDP growth and a longer lockdown can also take India into a potential recession. The private healthcare sector is staring at a potential operating loss of Rs 14000 – 24000 crores in Q1 FY21 on the back of a massive reduction in volume and value of work at various segments of healthcare delivery. The revenues of hospitals and diagnostic companies are currently down by about 60-70%. Private healthcare delivery enterprises both hospitals and diagnostics will face heavy liquidity issue as compared to public ones which will find support from the Government. This is a Capex-intensive industry where 1.5-2% of annual revenues goes back in refurbishment of technology and infrastructure besides new Capex which costs more than Rs 1crores/bed. This industry without liquidity support will end up in a crisis. COVID-19 has also unleashed additional costs of keeping patients, doctors and nurses safe at all the times thus adding another layer to the cost of operations. The pharmaceutical sector first faced supply chain issues on API coming from China, and post that labor workforce vanishing from the manufacturing plants has ultimately dragged production capacity. Most of the medical technology and medical devices supply in the country is driven through imports. With the rupee depreciating against the dollar on a daily basis we are also witnessing a higher cost of imports which will ultimately lead to increase in cost of treatment to consumers. Our doctors and nurses in the country are risking their lives each day to protect the citizens of the country; it is sad to see that there has been a shortfall of PPE’s and masks particularly in the public hospitals which effectively means that there are lessons to learn on the preparedness of public healthcare to combat a pandemic and more importantly exposing the fact that 1.28% GDP spend on public healthcare is abysmal. These are challenging times which have once again propelled the idea of Make-in-India initiative in medical technology and devices. The self-reliance that India needs on the medical technology side got exhibited in the ramp up in capacity of production in ventilators by various Indian players.

The COVID-19 crisis is a wake up call on many fronts for Indian healthcare. There is liquidity infusion of Rs 16000 – 22000 crores which will be required by the sector and Government must put together a support package for the sector on both direct and indirect tax, unlocking the capital stuck as debtors in various social health insurance schemes and through deferment of statutory liabilities by a Qtr. The healthcare sector requires a much needed support at this precarious time.

Mr. Pradeep K. Jaisingh, Founder and Chairman of Healthstart, International Oncology & a prolific Angel Investor

The current COVID-19 pandemic has already fundamentally changed our world. There is so much fear, uncertainty and negative news everywhere that, I chose to focus on the positives that we could expect to see in the post-COVID era.

The new world would see emergence of high allocation of resources to epidemiology, virology and related fields. Technology-driven healthcare like never before —though we have been talking about telemedicine for a long time— it is this pandemic that will redefine the healthcare by shifting the ‘push-based demand’ to ‘pull-based demand’. Tele-consultations for most healthcare needs and a hybrid model of in-person initial consult followed by e-care management will be the new norm.

The post-COVID era will see a whole new dedicated focus on personal health records. For most aspects of life from travel (including getting a visa) to attending office you would need up-to-date health records which could be sought by a whole range of authorities/ employers. Each person could potentially have his/her unique health IDs linked to AADHAR in India and/or travel and wellness details to be used as a Green Pass. This Green Pass could be used as a kind of Go/No-Go decision support system.

The emergence and widespread use of personalised health records and the analytics built on that could help the world regulate travel and access for effective containment and better management of COVID-19 like situations in the future.

Overall healthcare as a sector would see higher investment and entrepreneurial activity by not just healthcare companies but also by other players which will be a boon and have long term positive impact on the healthcare industry.

Finally, the development of a potential vaccine is unprecedented in the current scenario but it’s likely to still be available only next year despite very promising efforts by more than 70 different organisations including the Gates Foundation. The world will see the emergence of many new collaborations and research consortia to deal with not only this but for also future scenarios.

The Infrastructure– The COVID-19 crisis has clear lessons to more thoughtfully designed healthcare facilities and in identifying gaps in the Government and other hospitals’ preparedness for future outbreaks. Healthcare will emerge as a vital focus area for the Government and we may see the shift in resource allocation to healthcare in future along with surge in training and educational institutes. The ICMR is in the thick of things right now and will emerge as an even more empowered body in the future. The recently instituted body, National Health Authority (NHA), responsible for implementing Ayushman Bharat, could also potentially play a considerable role in this pandemic and for future.

Charu Sehgal, Leader- Life Sciences and Healthcare, Deloitte India

The pandemic will affect the pharmaceuticals to a great extent with respect to availability of APIs which are largely imported from China coupled with restrictions on export of drugs that are responsible for providing lion’s share of business to several large Indian companies. The current disruption in manufacturing will lead to increased cost and reduced production. The private hospitals are facing significant slow-down where occupancies have dropped to 20-30 % due to suspensions of elective medical and surgical procedures, and thus are forced to run ‘essential services’ while incurring all the fixed costs with minimal revenue. Hospitals are struggling to manage, hopefully the government will provide some support to them and the diagnostic labs by providing free or subsidized protective gears.

In future, apart from just aiming attention at staying prepared for emergencies such as this, there is a dire need to discover new ways to collaborate for government, private & not-for-profit sectors to ensure a balance between the public good and sustainable business. In the coming times, companies across the world will reimagine their supply chains and India too will look at reducing its dependence on a single source for its raw materials and components. The government has already initiated programmes to incentivise manufacturing of API’s and KSMs in India. The financial support measures announced by RBI are also really commendable.

Pandemic Alert: Catch 22 Situation in Healthcare Industry

Dr Vivek Desai, Founder Director of HOSMAC India

Vishal Bali, Executive Chairman, Asia Healthcare Holdings

Mr. Pradeep K. Jaisingh, Founder and Chairman of Healthstart, International Oncology & a prolific Angel Investor

Charu Sehgal, Leader- Life Sciences and Healthcare, Deloitte India

POWERED BY