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Coronavirus and its impact on the healthcare business in the private arena

Immediately most hospitals saw a drop in the number of both elective and emergency cases causing smaller nursing homes to shut shop immediately.

The Coronavirus lockdown has done quite a number on Private Healthcare providers. It’s also done a lot to separate the men from the boys (or the women from the girls, as might be your preferred idiom). The situation has prompted a swift recoil in the overall spending willingness and capabilities of the customer, while piling costs on to the hospital, and pushing the industry to the very limit.

Immediately most hospitals saw a drop in the number of both elective and emergency cases causing smaller nursing homes to shut shop immediately. This indicates that a lot of people are choosing to live with pain and malaise and even delaying treatment in the hopes of a safer time. Unfortunately, that also means that hospitals will see more acute cases coming through their doors at a later date. The most immediate drops have been for those paying cash and insurance patients which often are the most discerning lot and also provide the majority of liquidity and revenue for hospitals.

Additionally, the sealing off borders has only lead to a greater burden for hospitals in relevant regions as their cost structures have been calibrated for revenues from international patients, which tend to be on the higher side, and are vital to offset costs to patients from the economically weaker sections of society. This sort of Socialist Capitalism is the modus operandi for most hospitals which truly seek to provide services to their communities at large.

This is leading to a situation where hospitals are bearing the lion’s share of the brunt of this situation without significant support. This phenomenon, exacerbated by the price capping in many states is affecting the ability for many hospitals to meet their obligations to their employees, suppliers and even lenders.

Speaking off obligations, many healthcare providers are choosing to shut their doors, and the ones who are choosing to serve their communities are incurring further costs by modifying their infrastructure and putting in even more stringent infection control protocols to keep not only patients safe, but especially their healthcare providers.

This leaves healthcare providers with some very difficult choices to make. First, they need to make the difficult call of whether they should stay open in the first place. Essentially putting them at a crossroads to decide between the oath they have taken to serve the people and the financial reality of the costs they will have to incur.

Second, they’ll have to make a decision about whether they intend to keep their staff or let them go, at a time where the labour market is almost entirely stagnant, potentially decimating the earnings of families, many of whom already live hand to mouth. In many states with an active local political players, hospitals looking to pare down operations will find it difficult to let go of staff as doing so would incur the wrath of community leaders, thereby creating a vicious circumstance where those who are in fact seeking to keep their doors open are finding it terribly difficult to do so without support.

From a patient’s perspective, we must come to the uncomfortable realisation that there is an immense burden on finances due to the cost of drugs and therefore treatment. However, this must take into cognisance the fact that the healthcare delivery space is intrinsically extremely capital and people intensive, and that most efforts to allay this would lead to a decline in the quality of treatment.

On the whole, there are no winners here. The industry, which has been accused time and time again of profiteering are finding it difficult to even keep the lights on. Healthcare leaders must bear the burden of making hard decisions of running institutions in the face of a red P&L and a complete exsanguination of resources. It is a hope that the political class sees healthcare as less of a political lever to be pressed when the next election is around the corner and more of an essential service to be built thoroughly to keep the nation healthy. And until the system can get its act together to a point where members of the legislature, judiciary and executive branches choose public hospitals over private ones, private healthcare institutions will play a significant share in the endeavour to keep our nation healthy


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hospitals COVID-19

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