private hospitals: Covid-19 outbreak: A near-death experience for private hospitals, too

New Delhi | Mumbai: The ongoing Covid-19 outbreak has impacted healthcare companies, which claim declining footfalls as well as rising consumables and staff costs have put their very survival at stake. “The cost of running a Covid hospital is very high and 50% of that are fixed costs,” says Devi Shetty, chairman, Narayana Hrudayalaya.

He breaks it down further. “Maintaining PPE (private protective equipment) stocks for one month alone costs a few crore of rupees for hospitals chains. Doctors and nurses or technicians can work for a week or two and have to be then quarantined. They cannot go home and have to be housed in hotels that we pay for. At the same time, industry revenues have more than halved in the last one month. No one is looking at making money but now survival is at stake. Our receivables from the various state and central government schemes are pending as well.”

On an average, five PPEs are used every day for seeing one ICU patient. In addition, every patient who comes to the hospital has to be tested for Covid-19. The doctors, who see the patient, have to wear PPE assuming that the patient is Covid-positive. Private hospitals say their staff expenses alone have doubled in the past one month. Doctors and nurses, dealing with Covid patients, are functioning 50% of the time as they have to be quarantined for half the month.

A 12-day stay at a private hospital to cure coronavirus can cost more than ₹5 lakh. Pan India, the average stay can cost anywhere between ₹40,000-50,000 a day. The amount is likely to go up if the patient is shifted to the intensive care unit or is put on ventilator support.


Some hospitals are not admitting patients without upfront deposit and a few are said to be charging different rates for insured and uninsured patients.

Irate customers have taken to social media to complain. Last week, one Saurabh Sharma complained on Twitter that a private hospital in Gurugram was charging ₹500 from a patient for protective equipment worn by doctors. The Haryana chief minister’s office has sought details on this issue.

“We need to survive to serve,” counters Abhay Soi, chairman, Max Healthcare, the chain that runs Covid facilities in both New Delhi and Mumbai. He added that he would be happy to operate his hospitals on the government’s behalf, supplementing their capacity on a no-profit basis.”

“The government only has to pay salaries of healthcare workers and other direct expenses such as power, water, etc,” he said. The coranavirus outbreak has also resulted in private hospitals facing a 70% drop in footfalls and test volumes. With no international patients and no elective surgeries taking place, there has been a 50-70% drop in revenue in the last ten days of March. Most large chains could initiate 22-50% pay cuts for their staff, many of whom draw monthly salaries of over ₹1lakh, said company officials, who did not wish to be named.

“There is an urgent need to consider the healthcare industry’s triple burden. The poor financial performance even in the pre-Covid phase as well as the sharp drop in out-patient footfalls, diagnostic testing, elective surgeries and international patients sector, is impacting cash flow across the sector. In addition, there is increased investments due to Covid-19 which has impacted the hospitals and laboratories,” said Sangita Reddy, joint MD, Apollo Hospitals, the largest private hospital chain in the country.

Private healthcare providers say the government must at once clear their pending dues to help them tide over the crisis.

“Don’t kill the baby with the bathwater. The state and the central government owes us ₹3,000 crore of dues for treating patients under the Central Government Health Scheme (CGHS) and the Ex-servicemen Contributory Health Scheme (ECHS),” says another founder of a large chain who did not want to be quoted. “Clear those bills which have already been uploaded. They are pending for over a year.”

There are still no treatment protocols in place for Covid-19. For mild patients, the treatment includes administration of commonly used antivirals that are under price control. For moderate to severe cases, ICU admission may be required and patients could be put on ventilator or oxygen, but there are no surgical requirements. One of the big costs is the test for Covid-19 which is capped at ₹4,500, and a patient needs two of these tests before confirmation, and two more when they are getting discharged.

One of the issues being faced by patients is that while insurance policies have been extended to cover Covid-19, there are teething challenges over claims and payments. In some cases, insurance companies say the claims they have received are not just related to coronavirus but for other ailments as well.

But in the case of ICU cases, it’s possible that the virus might aggravate other underlying ailments, whose treatment would get added to the final bill, says Sanjay Datta, chief, underwriting and claims, ICICI Lombard.

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