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
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".
"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.
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".
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