Coronavirus leaves private healthcare sector in financial distress, in need of stimulus: FICCI-EY study

The private healthcare sector in the country is witnessing an unprecedented slowdown due to the outbreak of Covid-19 in India and the resultant lockdown, according to a FICCI-EY study

Press Trust of India April 16, 2020 15:56:11 IST
Coronavirus leaves private healthcare sector in financial distress, in need of stimulus: FICCI-EY study

New Delhi: The private healthcare sector in the country is witnessing an unprecedented slowdown due to the outbreak of COVID-19 in India and the resultant lockdown, according to a FICCI-EY study.

"The pandemic has caused an adverse impact on the private healthcare sector resulting in 70-80 percent drop in footfall, test volumes and 50-70 percent drop in revenue in the last ten days of March that is expected to sustain in the month of April with continued lockdown," the study said.

Possible ramp-up will be gradual thereafter, taking at least three quarters for return to normalcy, according to the study titled " COVID-19 impact assessment for the private healthcare sector and key financial measures recommendations for the sector".

 <span class=Coronavirus leaves private healthcare sector in financial distress in need of stimulus FICCIEY study" width="380" height="285" class="size-full wp-image-8263411" />

Representational image. AP

"With an estimated impact of Rs 14,000-24,000 crore operating losses for the quarter, the sector would need liquidity infusion, indirect and direct tax benefits, and fixed cost subsidies from the government to address the disruption," the study said.

Click here to follow LIVE updates on coronavirus outbreak

According to FICCI Health Services Committee Chair Alok Roy, the financial distress accentuated by COVID-19 lockdown has forced several standalone and small nursing homes in tier II-III cities to pull 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, he added.

FICCI President Sangita Reddy said: "the private healthcare sector in India has stood beside 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 - low financial performance in the pre-Covid state; a 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, she added.

In a similar vein, EY India, Healthcare-Partner Kaivaan Movdawalla said: "While the private sector stands fully committed to partner with the government as a national duty, it truly finds itself in a compelling situation to beseech the government for “differential” financial forbearance measures and to be supported well, in order to best utilise its capabilities and capacity to serve the nation in this hour of crisis".

Updated Date:

also read

Formula 1 2021: 'Dizzy' Mercedes driver Lewis Hamilton may be suffering from long Covid
Sports

Formula 1 2021: 'Dizzy' Mercedes driver Lewis Hamilton may be suffering from long Covid

Lewis Hamilton missed the Sakhir Grand Prix in Bahrain in December after testing positive for Covid-19 and has gone on to win four races this season, including the British GP at Silverstone a fortnight ago.

WHO calls for moratorium on COVID-19 vaccine booster shots till Sept-end to address disparity
World

WHO calls for moratorium on COVID-19 vaccine booster shots till Sept-end to address disparity

Israel last month began rolling out a booster shot for over-60s, while Germany said it would start offering third doses of the two-shot Pfizer-BioNTech and Moderna vaccines from September

'Come together to defeat BJP': Mamata Banerjee discusses Oppn unity, Pegasus row with Sonia and Rahul
Politics

'Come together to defeat BJP': Mamata Banerjee discusses Oppn unity, Pegasus row with Sonia and Rahul

Banerjee's visit during the ongoing Parliament's Monsoon Session assumes increased significance with the Opposition cornering the Centre on price rise, increasing cost of fuel and COVID-19 pandemic