It was an annus horribilis for the health care sector. Sick of the note ban’s fallout, many middle and lower middle class patients are postponing treatment citing ‘cash crunch’. Small and medium hospitals are struggling to recover from its aftereffects. Express examines
KOCHI: For Joseph Mathew (name changed) and his wife, last year's demonetisation announcement came as a rude shock. He had just landed from Malaysia with Rs 3 lakh in cash for the treatment of his brother who was shifted to a private hospital in Kochi from Kannur. "The day we landed here, the Prime Minister announced the note ban," he said. It was a nightmare as nobody would accept Rs 500 or Rs 1,000 notes and the ATM counters ran dry."
“After demonetisation, the first two months were really difficult, Dr P K Mohamed Rasheed, president, Kerala Private Hospitals Association, said. "The outward problem of cash scarcity has been sorted out to an extent. However, there is a deeper, more severe problem. People are more reluctant to do procedures and treatment now. There is no ‘cash’ with them. Demonetisation and GST together have subdued the economy. At least in the case of hospitals, our income and turnover have gone down. It was not a good year for hospitals,” said Rasheed who runs Medicare Hospital in Kodungalloor.
In small hospitals and clinics, patients come for minor afflictions like fever or a cold. The bills would come under Rs 1,000 in most cases. However, tendering the exact amount is an uphill task given the scarcity of change and unavailability of cashless transaction avenues. Rashida, a 32-year-old home-maker from Kochi, went to a local hospital as she was suffering from fever.
Her bill came up to Rs 554 and when she gave Rs 600 at the counter she was asked to wait for the balance amount as they did not have change. This is the same scene in many other smaller hospitals and clinics.
The aftershocks of demonetisation are even forcing middle class and lower middle class patients to postpone elective surgery, say doctors. "I advised a patient hailing from a middle class family to undergo hernia surgery and they were quite sceptical and asked me if it should be done immediately," said the doctor of a private hospital here. "People who are advised elective surgeries prefer to wait these days. When we tell them of the difficulties that might occur later, they tell us 'we don't have the money to do it now, doctor'."
It may seem like a small issue at first glance. But what happens when all service providers demand people to turn up with the exact amount? Ironically, there are hospitals that haven't computerised patient logs or any sort of advanced data keeping facilities, let alone cashless transaction.
Vimal had forgotten to take his medicine for blood pressure. He went to the medical store near his office and asked for the tablet. He was provided the medicine and he paid them with a Rs 500 note. However, the store did not have change. In his weakened state, he had to walk back to office half a kilometre away to get the change. His life was at risk here.
These kinds of incidents happen every day with the middle and lower middle class and the less tech savvy after the cashless economy slogan gained momentum. In this perspective, the effects of demonetisation come under the scanner.
"Liquidity has dropped and that is evident from these problems faced by the common man," Mathew Kurien, economist and joint director, K N Raj Centre, M G University, Kottayam, said. "Lesser amounts are not in currency now. Evidently, demonetisation was a drastic and untimely move. Only the elite class survived unscathed from this decision."
But then why don't people change to online transactions? The reasons are manifold. Not every person can afford a smartphone and not everyone is tech savvy. Small traders or daily wage labourers lack the facility or knowledge to use cards and go cashless.
On the other hand, many people are going for health insurance policies. Back when demonetisation shook the lives of the middle and lower middle class patients, it was health insurance that helped some among them.
“Following demonetisation, the number of policies has significantly increased, especially in the past 4-5 months. As far as the insurance sector is concerned, the note ban and the encouragement of cashless transaction have boosted the business,” said B Sivaprasanth, branch manager, Apollo Munich Health Insurance, Kochi.
When the note ban was announced on November 8 last year, the health care sector faced an immediate backlash. The hospitals stopped accepting the demonetised currency and patients were affected severely. However, the government as an afterthought undertook steps to ensure the patients got treatment even with the withdrawn currency, but the damage was done.
A year later, the impact of demonetisation can still be seen on the health care sector. Small and medium-level hospitals with minimal beds were the worst hit initially.