How COVID-19 has Taken Toll on Financial Health of Hospital Business

Financial Health of Hospital

Coronavirus has unleashed mayhem across the word, affecting every sector including healthcare. The COVID-19 crisis has led to the death of millions of the people word over and pushed same number of people on the verge of death due to spillover effects like job loss and poverty.


Healthcare is the one sector which has faced the covid heat the most. There is a double whammy for them–On one hand, it has to save lives of patients risking their lives, and the other hand they have to manage the financial health of the business.

Several hospitals have whimpered about mounting loss as patients’ occupancy have reported to be about 20-30 percent amidst COVID-19 nationwide lockdown. Patient occupancy is down due to least number of international patients and reduction of elective work.

Also read: COVID-19: Centre lends helping hand to Delhi; announces several measures


Moreover, they have been directed to follow guidelines, affecting major operational work at the hospital. Except emergency care and isolation ward for COVID patients, all the departments are almost closed.

In addition, several precautionary steps have added extra burden to the financial health of the hospitals. Costs have increased as disinfection, sterilization, infection control, personal protection equipment, setting up isolation wards, staff rotations and quarantines are all essential now. Physical distancing also increases logistics costs and reduces capacity. In addition, there is the impact of supply chain disruptions.

Due to high operational cost and least revenue, several doctors and other medical staff have to face the wrath in terms of pay cut.

Providers are in a unique predicament today, as they have to save lives of patients as well as their staff.

One of the healthcare experts talking at eHealth webinar said, “OPD, radiology, elective are stopped. At the same time, staff have to be around taking care of emergency. While doing so, they have to be given all the paraphernalia to protect themselves, which is adding to the cost. Anybody working in emergency or elective, one has to go with the premise given the rise of asymptomatic carriers. Test have to be done for asymptomatic patients and staff at the same time. These things add up to additional cost.”

“Suddenly cost of surgery is also going up as additional burden have to be managed. Protective care is equally eating the margin of hospitals.Two three months of revenue dip would eat the reserve that hospital generated in years. Hospitals are working at 15 percent EBITA. We also have to safeguard the interest of healthcare workers. Cost has to be reduced and at the same time morale has to be up. Those who are of certain age, have to avoid coming to facility. Cash flow cycle has gone for a toss.”

Though innovations are filling up the gaps to tide over the crisis, but things are gloomy at the moment for the healthcare sector. Tele consultations are being explored, but patients have yet not adapted to the technique. Facing computer screen to tell doctors their ailments are something they are not habitual of.

It seems, there is tough time for the healthcare sector, where providers have to live up to expectations of people, managing revenue cycle, and keeping everyone safe. Despite numerous challenges, they are giving their best to serve people. We applaud them for putting up brave face in this time of crisis.

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