In just four months since the first case of Covid-19 was reported, the pandemic is already adversely impacting country’s private healthcare sector including small hospitals and clinics, especially in Tier-II and III cities, which have been forced to close down their operations since their cash flows have dried-up, according to a joint report by FICCI and the EY, a global entity engaged in tax, transaction and advisory services.
Yet, private hospitals and nursing homes, that constitute more than 60 per cent of beds at 8.5-9 lac, 60% of inpatients and 80 per cent of doctors in India, have been investing heavily over the past month in additional manpower, equipment, consumables and other resources to ensure 100% preparedness for safety in the healthcare facilities and eventual treatment of patients, if needed, said the report.
Dr Sangita Reddy, President, FICCI and Joint Managing Director, Apollo Hospitals Enterprises, said, “the private healthcare sector in India has stood besides the government firmly to contain the virus and is deeply committed to the war against COVID-19.
“However, there is an urgent need to consider the healthcare industry’s triple burden viz. low financial performance in pre-COVID state; sharp drop in out-patient footfalls, diagnostic testing, elective surgeries and international patients across the sector is impacting cash flow; and the increased investments due to COVID-19; which has impacted the hospitals and laboratories like never before.”
Dr Alok Roy, Chair- FICCI Health services Committee and Chairman, Medica Group of Hospitals added, “the financial distress accentuated by Covid-19 lockdown has forced several standalone and small nursing homes in tier II and III cities to down the shutters. Many others are at high risk of closing down soon since their cash flows have dried up, due to steep decline in patient footfalls, and they are facing liquidity crisis for even sustaining their staff salaries.”
The stakeholders have recommended Government support through Liquidity infusion for financing of the operating losses through short term interest free/ concessional interest rate loans to address the liquidity gap to the tune of Rs 14,000 -24,000 Crore, besides tax waivers.
