Is the Healthcare Sector on a Recovery Path?
HE asks healthcare leaders whether the worst is over for the healthcare sector.
Dr. Vispi Jokhi, CEO, Masina Hospital
Revenues of hospitals are far below pre-COVID times because the number of operational beds is still meagre. The COVID cases have been fluctuating in cities like Mumbai. When BMC took over the hospital beds in Mumbai, they had assured private hospitals that when COVID patients were being shifted to hospital wards, they would give preference to private hospitals. However, these promises were not fulfilled later. We are still struggling to meet their ends. So, we are planning to cut down COVID beds after Diwali. We had more than 100 COVID beds. More than 80 per cent of the general ward beds are empty now. Non-COVID services are gradually increasing. But patients are still hesitant to do joint replacement surgery or other surgeries. Less than 20 per cent of patients are coming for OPD. Earlier we had 100-150 every day. Now it's only 20-30.
Medical tourism was never a significant contributor to Masina Hospital. Today, medical tourism patients come for elective procedures. Now, senior doctors are also worried about contracting the disease and are not willing to do procedures; and even patients are not keen to do elective procedures. Masina hospital has multiple buildings, and we have restricted COVID and non-COVID areas, but the confidence levels of doctors are still not so high. We didn't cut the salary of even a single employee. What the hospital has done is to reduce the ratio of the contractual employees. For instance, whenever the contract of a specific employee expired, it wasn't renewed. Since the hospital has a burns unit, it uses ACs with exhaust systems. The lack of a centralised air condition system has helped us manage the pandemic better. Teleconsultation can only be the first point of contact with the patient. It's almost like a phone call. The teleconsultation platform has been used more extensively by specialities like dermatology. It's hardly useful for other specialities. We will continue teleconsultation services even after the pandemic because it's a matter of convenience. It is not a substitute for consultation.
Dr Alok Roy, Chairman and Managing Director, Medica Synergie
The revenue of a hospital depends on the level of engagement with COVID. We haven't reached a turn-around point yet and cannot say that the worst is over for the Indian hospital sector. Non-COVID patients are not coming to hospitals. Organisations which engaged with COVID have survived. For instance, a hospital which offered critical COVID care performed better than those offering non-critical COVID care hospitals. Hospitals which didn't engage with COVID has suffered the most. There is a partial salary reduction for a few doctors. I wouldn't call it a salary cut. But a delayed payment for our staff.
Dr Harish Pillai, CEO, Aster India, Aster DM Healthcare
Since the phased withdrawal of the lockdown, we have started receiving more non-COVID patients for acute care and elective procedures; depending on the geography there is a variability, however, while the situation is improving on a month on month basis we still have a YTD gap in revenue due to the complete washout of Quarter 1.
Both Outpatient and Inpatient volumes have grown month on month after the phased withdrawal of the lockdown; however, there is an existing variability depending on the location with some units already touching pre-COVID volumes while others are lagging. For Aster, the bulk of our Medical Value Travel business was based in our units at Bangalore, Kochi and Kozhikode and indeed the revival of this vital revenue stream will be entirely dependent on the creation of air bubbles and opening of medical visas for crucial target countries.
We adopted a cost-saving system whereby all staff at the level of the minimum wage were fully protected and given their full salaries while the higher categories were grouped in varying earning bands with the principle of proportionate pay cuts instituted in a manner that the highest bands got the maximum pay deductions. This system was designed to ensure sufficient liquidity and sustain patient care services and based on the Unit performance, a pre-designed model of payback was instituted such that over a limited period, full payback was accomplished. We are happy that both the Central and various state governments have listened to the genuine concerns expressed by the health sector and adopted proactive measures to release extended pending outstanding amounts. There are no concerns regarding procurement and accessibility to PPEs. At the same time, the hospital-based transmission has significantly been controlled, the prevailing challenge remains as community-based transmission, especially in staff family settings. We have witnessed spurts post festivals in individual states. Indeed the advent of tele-consultations and the associated regulatory framework has been a boon for doctors and providers; this was mostly so during the first phase of lockdowns. Even now after the phased withdrawal of lockdowns, the post-discharge follow up, and continuum of care has been delivered through tele-consultations.
Jitendra Haryan, CEO, Jaslok Hospital
The worst is still not over for the healthcare industry. Businesses have started picking up. However, hospital revenues are still about 20-25 per cent below the run rate. Within the next three or four months, the situation should come back to normal provided COVID situation is in control. Shifts in the healthcare sector, like tele-consultation, is here to stay. About 30 per cent of consultations will remain to proceed through tele-consultation route. Elective procedures haven't come back to normal yet. 56 per cent of out-patient consultations are happening physically, which was earlier about 10 per cent. The rest is happening online.
Medical tourism is not a significant contributor to revenue for most of Mumbai hospitals. Medical tourism contributes less than 10 per cent in our case. That 10 per cent is currently mostly missing. Therefore, the hospital's income will take at least six months to come back to the regular rate. We didn't go hard on employees. We spoke to Comprehensive Maintenance Contract (CMC) vendors, landlords, service providers and whatever savings was possible based on a mutual comfort basis was achieved. The working capital cycle has been a bit under stretch. After August, things have slowly started to improve. Safety is no more concern among our staff as we maintain strict infection control and safety protocols. Every employee is provided with an RFID and can be tracked using this system. We can easily find out who has come in contact with an employee if he/she tests positive for COVID.
Anil Gupta, Head Hospital Administration, PGIMER, Chandigarh
During the initial phase of the pandemic, PGIMER was declared as a COVID hospital by the authorities. We were asked to set up a 200-bed-facility. Later, the number of beds was increased to 300. We were asked to increase the number of COVID beds, but fortunately, the numbers started declining. At one point, there were 290 patients in our COVID wards. The number came down to 75 during the end of October, but by 10 November, it again rose to 130. There is a spike in the number of patients. For non-COVID patients, emergency services are always being provided at the hospital. The hospital has cut down the number of elective procedures. The number of patients had come down from 2000 to 1000 at one point. But as the number of COVID patients came down, we had also started admitting non-COVID patients. By mid-November, we had 1300 admitted patients. The point is we have started operating at a slightly higher level. There were up to 700 patients in our emergency unit even earlier. Currently, we get 2500 patients a day. Around 700 consultations at the hospital and the rest is through tele-consultation platforms. COVID test is compulsory for OPD patients. Our revenue was severely hit during the first quarter; it came down to 50 per cent. But it's slowly picking up now. The rates of our hospital are lower than AIIMS; we don't focus too much on revenue generation, but more on providing healthcare services to people.
Sunil Chandy, Medical Director, ITC Healthcare
Now that the COVID pandemic curve is downward, there are hopes of recovery in the Indian hospital sector. It would take at least 12 to 18 months for the situation to go back to pre-COVID times. During the lockdown period, revenues reduced to 20-30 per cent. But now it is returning to normal, due to easing down of lockdown restrictions. Patients with chronic non-communicable diseases like cancer and heart conditions are going back to the hospital for due checkups and elective surgeries. There was, at best, a 50-60 per cent occupancy in corporate hospitals at the peak of the pandemic. Non-corporate institutions have a slightly higher occupancy for cost reasons.
In cities like Delhi, where there is a surge, there is a higher occupancy rate mainly by COVID patients. But the revenue-generating non-COVID patients will take a while to break free from the stigma, fear and financial reasons to come back to the hospitals.
Healthcare decision-makers must focus on critical services that are required to tide over the current crisis. Revenue-generating services, but non-essential must be placed appropriately against the backdrop of a large number of COVID and post-COVID pathology. They must also re-prioritise their expenditure. For instance, if there is an infrastructure development plan, it must be put on hold, until cash-flows return to normal. Expense-heavy additions in a hospital must be kept down till the crisis is over. The tendency to lay off employees to meet the revenue shortfall is not prudent in the long run. The productive layer of employees viz. doctors, nurses, auxiliaries, technicians should not be made to feel redundant, or get to know that they can be laid off. But recruiting contract employees, valuable but not essential for core services, may be put on hold. Contrary to common practice, it's the junior cadres— the frontline soldiers, not the senior-most consultants, who need to be stewarded in this recovery period.