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COVID-19 pandemic pushes healthcare sector into deep financial crisis

Closure of hospitals, low turnout of outpatients dent finances of smaller health care providers

Published: 24th May 2020 06:27 AM  |   Last Updated: 28th May 2020 12:51 PM   |  A+A-

Illustration: Tapas Ranjan

Express News Service

CHENNAI: The COVID-19 crisis has pushed several industries to the brink of an economic crisis. Ironically, it has not spared players in the healthcare sector too. Closure of hospitals and low turnout of outpatients have impacted finances of hospitals and, in turn, resulted in pay cuts for doctors. Experts blame inadequate investments and the lack of infrastructure reforms for the crisis.

Dr Nandakumar Jairam, Advisor - FICCI Health Insurance Committee and Chairman and CEO of Columbia Asia Hospitals India says that when revenues are down so much, the survival of the industry itself is a question. “The pandemic has definitely hit the healthcare providers irrespective of their size and location. Occupancy capacities are just around 25 to 30 percent,’’ he said.

Apart from bigger hospitals, stakeholders say that smaller clinics and nursing homes would be the worst affected. “The smaller healthcare providers would face a massive challenge. They could not afford to bear the PPE costs and would not be having isolation wards too,’’ said Dr Harish Pillai, Chair - FICCI MVT Committee and CEO of Aster DM Healthcare India.

Dr Harish said that electricity bill, water bill and maintenance are a huge expenditure for the healthcare system to bear. “EB bills for hospitals could be waived off for two quarters,” he said.

Most of them are not in a position to spend consistently on PPE kits for their doctors and staff, not to mention the need for space to have isolation wards. Nurses, ward boys, and sanitary staff, who are mostly hired on contractual basis, suffer the most.

“I have 10 support staff – nurses and ward boys. Their salary alone comes to Rs 5 lakh,” claims doctor C Mohan Reddy of Mohan Nursing Home in Villivakkam. “But, we have had no revenue in the last two months, and I have been paying them out of my pocket. As of now there are no pay cuts here, but going forward it will depend on by when normalcy returns.”

Associations say nurses and ward boys are paid very poorly across the State. President of Trained Nurses Association of India (TN) Jayaseelan M Devadasan says the minimum wages are very low.

“A fresher in the profession is paid somewhere around Rs 6,000-7,000 and experienced nurses get around Rs 12,000-15,000.” 

Hospitals have been making pay cuts and are tightening the belts wherever possible to tackle the crisis. “Most of the health care players have not touched the frontline workers, nurses and junior doctors. Pay cuts have by and large been with the higher earners,’’ said Dr Jairam.

A doctor who runs a small clinic at Thennur in Tiruchy tells Express on condition of anonymity that he was able to pay only half the salary for his staff in April. “My clinic was shut from March 24th till the end of April. I had no income during those days. I am hoping to pay them their full salaries for the month of May,” he said.

Medium-sized hospitals ‘penalised’ the staff members who could not turn up for work by cutting their salary. “I could not come to work as there was no public transport, and my hospital cut half of my salary,” says the ward boy of a medium-sized hospital in Tiruchy. Doctor M Singaravelu, District Nursing Homes coordinator of Indian Medical Association (IMA), says the cost of masks and PPE kits is prohibitive.

“PPE kits cost around Rs 5,000 and have to be discarded regularly. N-95 masks too have to be changed twice a day,” he said. “In our case, we arranged transport for those who could not come to work and food for those staying in the hospital itself as transport facilities are limited. As a result, we could pay only 50 per cent salary for that one month.”

Dr Srinivasan, who is running a small skincare clinic in Karur told Express that though he had to shut down his clinic for two months, he had to pay the staff, the electricity bill, and building rent.“Apart from that, a few clinics which possess a medical store had to pay the suppliers for the drugs that they had stocked up in their pharmacies, though there were no patients for 2 months.”

The story is not very different in government hospitals. The operational costs at GHs have put a severe strain on the State exchequer, said a former health official. “We surely need infrastructure reform. Once the lockdown is lifted, non-COVID patients too will come, and the footfall will rise.”

To deburden from the financial stress, the industry had placed several requests to the government such as giving certain concessions in tax, GST, and capping the cost of supplies.

 “Mainly, we had requested for reimbursement for the Central Government Health Scheme (CGHS) and Ex-Servicemen Contributory Health Scheme (ECHS), which the government has proactively done,’’ added Dr Jairam.

Dr Harish pointed out that fiscal and regulatory intervention must be there. “Five percent of GDP must be allocated for the health sector. Health care funding must be in the political manifesto,’’ he pointed out.

Dr Harish added that States could also double the number of UG and PG students which will boost the human resources.


(With inputs from Tiruchy and Coimbatore)

More from Tamil Nadu.

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