Amidst Covid-19 pandemic, healthcare sector has been badly affected especially care delivery system as revenue took a beating. Due to lockdown and ensuing developments, people hardly visit hospitals which led less occupancy rate. Only silver lining is for digital segment like tele healthcare which has seen positive traction these days.
Though government has taken measures, more steps needed to encourage stakeholders who are grappling to sustain the crisis, said Sunil Thakur, Managing Director, Quadria Capital Advisors Private Limited, in a recently held webinar moderated by Dr Ravi Gupta, Founder Publisher and Editor-in Chief of Elets Technomedia.
Objective of Quadria Capital
Our primary goal is to back entrepreneurs and support business models in large emerging markets which have strong inherent consumption strength. Currently we are focusing in India, Bangladesh, Sri Lanka, and South East Asian countries. These are large emerging markets focusing on healthcare where penetration is limited. Therefore, they need support of private capital to support entrepreneurs.
COVID-19 taking toll on the healthcare sector
Like other sectors, there is an impact on healthcare sector as well. Because of the lockdown and word over events, economy has contracted. The spillover effect is on healthcare.
But there is a silver lining for healthcare as it is not badly affected like other sectors. Impact can be majorly broken into three components. First is healthcare delivery—hospitals and diagnostic centres, that has been badly affected primarily because people have stopped visiting hospitals due to lockdown, guidelines issued by the government, and fear of catching infection. Healthcare delivery constitutes more than two third of entire health sector.
Second bucket is pharmaceuticals. This has not been badly impacted. Demand is still there in different forms. Supply chain has been affected to some extent.
Third component is entire emerging healthcare models like digital tele consultations and all. That has seen significant amount of traction.
Our estimate for the year would be that revenue get impacted anywhere between 10-17 percent depending upon pessimistic view for hospitals segment. Similar is the case for diagnostics. As far as pharmaceuticals are concerned, it is in positive zone. That is an estimate we have today.
It all depends upon how the Pandemic, the lockdown, and stimulus package work out in coming days. Things will be pretty much clear in next few months.
How does Rs 21 lakh crore package will benefit health sector?
The intent of the government is very right to announce package. But I think, the government can do much more than what it has currently announced. Out of 21 lakh crore, healthcare sector would hardly get Rs 15 thousand crore including pharma segment.
In US overall stimulus package is 2 trillion dollars. And healthcare sector would get roughly 215 billion dollar. That is little over 10 percent of overall package. We are short of other healthcare markets.
Healthcare delivery badly needs more stimulus package
India should have at least 2.5 percent of GDP for health sector. But announcements are still happening. We are very positive that government would certainly come up with more measures in coming days.
Bottom line is healthcare delivery badly needed more stimulus package as it is at the frontline in fight against Corona. This segment of healthcare has suffered the most in this pandemic.
Hospitals should be considered within MSME sector to avail some of the benefits as revenue took a beating
It is certainly a serious concern. It is important to come up with measures to help stakeholders in the sector. As per a FICCI report, the sector is witnessing a loss of around 14,000- 21,000 cr in one quarter. Stakeholders are battling with the pandemic in line with their expectations from the government. More confidence building measure must come from government side. They have started doing that in terms of insurance of Rs 50 lakh to covid warriors. Similarly to help Asha workers, steps have been undertaken. I believe there can be more substantial measures to bring back lost confidence and encourage stakeholders.