The Covid-19 pandemic has exposed glaring challenges in the healthcare sector, bringing forth a dire need for course correction in infrastructure and other areas. In the initial days when the infection began to spread, it was termed as a ‘wake-up call’ for the industry to pull up its socks, but the last few months have portrayed a bleak picture that seems to counter question if this pandemic is a ‘blessing in disguise’ or not.
The curve shows hardly any signs of flattening, and if reports are to be believed, India is yet to witness the peak of the pandemic. With the world’s most stringent lockdown now opening up, there are several pertinent questions floating in the minds of the public and other industry leaders with regard to healthcare as an industry.
In an exclusive webinar organised by The Blue Circle on ‘Healthcare’s Evolving Equation post Covid, prominent leaders – Dr. A Velumani (Creator, Thyrocare), K Chandrasekhar (Founder & CEO, Forus Health), Dr. OP Yadava (Chief Executive Officer & Chief Cardiac Surgeon, National Heart Institute), Rajiv Gulati (Strategic Advisor, PE Pharma and eCom and Ex- President, Ranbaxy), Sameer Wagle (Managing Director, Asian Healthcare Fund), and Pavan Choudary (Author, CEO and Public Intellectual), discuss the impact of Covid-19 on the healthcare sector, the benefits and challenges, and the way forward.
Impact of Covid
Although the pandemic had spread all over the world months before it hit India, the seriousness of the matter struck when the nationwide lockdown was suddenly imposed in the last week of March. This left most industries, including healthcare, under-prepared to deal with the crisis.
Since the diagnostics business is heavily dependent on logistics, Thyrocare, for instance, spiralled into a free fall due to supply chain disruptions. From a high of Rs 1.5 crore turnover a day, its revenue tumbled to Rs 1.5 lakh per day in the first week of April. The rest of April and May saw zero turnover, and it was only in June that things started picking up once the lockdown began to open up in phases.
“That month, we recovered around 40 percent of our non-Covid business, and in July, about 55 percent,” Dr, Velumani shared.
What helped Thyrocare mitigate this crisis better is because it is empanelled for carrying out the RT PCR tests to detect the Covid infection. From 200 tests a day, they ramped up their capacity to 5000 swabs a day, thereby creating a new business opportunity during the pandemic.
Chandrasekhar’s business, like many others, took a hit initially. But since Forus is spread across India and abroad, they were able to recover some of their losses when normalcy began to return in other countries.
“Our last quarter is most important for us, we generally do 40% of our business. We began feeling the impact in February, when the Europe business became almost zero. At that point, India business continued till the middle of March, and given that we are a capital expenditure business, our revenue went to zero post the lockdown. The first quarter of every financial year is the lowest for capital buying, and that’s why our forecasts are much lower. To our advantage, the Europe business which was shut started to open up, and we began to get business,” he shared.
Covid has had some other fallouts too. As per Chandrasekar, it has opened up opportunities to build on tele-consultation, which is now the preferred mode of communication between patients and doctors. This will drive a new wave of home care devices that are connected to doctors and hospitals.
“There will be a new emergence of this digitalization. Instead of standalone devices, devices that are integrated with large scale digitization will work, because hospitals are leveraging technology and have electronic medical records.The chronic patients will drive tele-consultations since they need regular follow-up and disease management,” he added.
Pavan shared similar views – “In terms of topline and bottomline, there might have been a decline, but acceptance and awareness about tele-consulting has gone up, and resistance has come down. If science or technology could not change it, fear of being in proximity to the Covid patient has changed the scenario.”
In the last few months, the very mention of hospitals sends shivers down the spine; today, they are viewed more as ‘Covid hotspots’ than centres for treatment.
Sharing his concerns, Dr. OP Yadava said that hospitals across all quarters have been devastated, but the ones that focused on surgical specialties are suffering a little more than the others.
“We knew there would be a reduction in the number of routine cases coming to the hospital, but we are surprised to see even the emergencies have reduced dramatically, largely due to the fear psychosis in the minds of the public. To make matters worse, the government has sacrificed the private sector at the altar of its socio-political agenda. The responsibilities it should have discharged towards its population, have been thrust on the private sector by capping prices on procedures,” he lamented. Further, there is a shortage of manpower as well not only in terms of absolute numbers, but also lack of people with the requisite skill sets.
Pavan questioned Dr. Yadava if the all cause death rate has really come down, to which he replied that according to certain published studies, there has been a marginal increase in mortality in Italy due to non-Covid cases, but in India there has been no increase in mortality.
He also pointed out that though currently the focus is only on Covid, a recent Lancet study suggests that deaths due to malaria will increase by 36% in the next five years, and also in the case of tuberculosis and HIV.
Rajiv Gulati, ex- President, Ranbaxy, explained the impact of Covid on Pharma industry by breaking down its sales into three components – chronic, acute and OTC (Over the Counter).
“The sale of chronic ailments medicines grew over the same period last year since these have to be taken regularly for years. In the case of acute ailments, there has been a dip, because people stayed indoors and hence didn’t get infected. Coming to the OTC sales, the impact was much larger because people were actually not entering shops due to fear of catching covid and were buying only essentials. This fear has in fact led to a surge in sales at e-pharmacies because people want the medicines delivered at home. “
“Regarding Covid related sales, for example, if the company was into steroids the sale obviously went up, if it was into hydroxychloroquine then the sale went up exponentially. You can’t say everybody gained or everybody lost – it depends on what sector of the industry you are in and what is your product mix,” he added.
Sameer Wagle, Managing Director, Asian Healthcare Fund, believes that the short term will prove to be a mixed bag for investors. The appetite for new investments has reduced, and in the current portfolio, companies that have discretionary or elective businesses in metros have been largely impacted.
“There is pain across some sub sectors, but if you look at the medium to long term, Covid will be positive for the healthcare sector, because for all stakeholders, be it investors, government, consumer, healthcare will become a priority. Both the mind share and wallet share will increase, and as things improve, there will be a lot of investments coming in, whether it is from specialised healthcare funds or general equity funds“ he shared, adding that there will be formalisation and consolidation in the sector that will tilt towards more quality.
Digitalisation will play a critical role in healthcare, even though both consumer and practitioner were earlier not receptive towards the use of technology. This time will help people move away from traditional mindsets and give wings to health tech businesses post-Covid.
“The other major trend I see is that of decentralisation, where you had large hospitals which used to do all end-to-end healthcare activities, but post-Covid, there will be more speciality and single-specialty clinics that will help enhance customer experience,” he added.
Predicting the future, Dr. Velumani said that the healthcare industry will be segregated into two verticals – Covid and non-Covid, and the size of the Covid business will be equivalent to that of non-Covid.
“There are two kinds of tests that are promising – RT PCR test and the recently introduced antibody test. We did a survey across 600 pin codes of the country and the result showed around 15 percent of the population having covid antibodies. India has a death per million rate of only 20, while in the western world it is roughly around 500. In metro cities, around 40 percent have positive antibodies, which means that the body has handled it pretty well,” he said.
As per Dr Velumani, job security is not a pressing concern. “We are keen to double the number of HR, double the floor size and double every capacity, so that the opportunity of doing a big size business during Covid is not missed out.”
Countering his view, Rajeev said that the impact on medical representatives’ employment could be huge and might lead to a bloodbath.
Dr. Yadava urged the government to create a conducive environment for a meaningful public private partnership, and to not consider making profits as a wrongful activity.
“Even government institutions must work for a profit, they must incentivize. Secondly, capacity building is important, whether it is hospitals, medical colleges, doctors and nurses,” he said.
Rajeev predicts that the government will become a major player in the healthcare domain as a regulator, purchaser and competitor.
Pavan concluded by saying that even an overzealous government can create problems due to the lack of a well-thought-out policy.
“We hope this crisis makes everyone more thorough in their approach, including the government,” he added.
(Edited by Anu Choudary)