In an exclusive interview with ETHealthworld, Fortis Healthcare Limited MD and CEO, Dr. Ashutosh Raghuvanshi, shares the impact of closure on hospital functioning and costs, crucial measures taken to prevent distress, and how it leverages technology to deliver care. Edited excerpts
Q: Due to the shutdown, private hospitals have had huge revenue losses since March. How has the impact on Fortis been and how much revenue loss do you expect?
Dr. Raghuvanshi: People have hesitated to come to the hospital for chronic illnesses and only patients with very acute illnesses are coming. Occupancy levels have dropped to about 30 percent and the situation is almost universal across hospital chains and independent hospitals. As far as the economics of this, with 30 percent of your patients coming, your revenue will also fall proportionally.
About 30-35 percent decline is what we hope, compared to what we would have expected to do this year. Our current estimate is that there should be some improvement for the month of May-June and before July-August we should see normal trends.
Question: What financial measures have been taken at Fortis to maintain operations and manpower?
Dr. Raghuvanshi: All top management including myself and senior doctors voluntarily take substantial pay cuts, we aim to protect the job as well as the remuneration of the junior staff in the organization as all these people are vulnerable and it is our responsibility to support them.
All of our clinicians continue to work as hard as before, giving us much courage. We believe in the next 3-4 months that routine, optional work will begin to build, so if we can maintain some savings over the next 3-4 months, we should be fine. Fortis seems to be in a comfortable position right now, but if this lasts for long, it will certainly be stressful.
To keep costs under control in the hospital, some areas that may not be in use are temporarily closed, which also reduces power consumption.
Typically in hospitals, approx. 60 to 70 percent of the costs are fixed in nature, which becomes very difficult to control as we are presumed to hold ourselves in an increased readiness to treat the influx of Covid patients. This commitment is also there, which is why it will be difficult to contain the costs, which is the biggest financial stress that comes in hospitals.
Question: How important is the need for a financial stimulus package for the private health sector to avoid financial distress?
Dr. Raghuvanshi: Unfortunately, people feel that private healthcare is something that does not require support or does not need to be revived. With more than 80 per cent of healthcare in India provided by private healthcare players, it represents a very important sector. The industry as a business and enterprise is staring at hard times in the future if appropriate measures are not taken, including for health workers and medical staff at all levels.
In the post-epidemic period, private providers must bear the burden of optional treatment, which is now postponed. So it is very important for the sector to be able to function optimally. We hope that the government will support us through measures such as tax breaks for a limited period and concessions. An extension of various licenses, which entails huge administrative costs, and the availability of credit limit by the banks at relatively lower interest rates, will be extremely helpful to the industry.
Q: Som coronavirus continues to bring sectors to a standstill, what are the biggest challenges you see as CEO of a hospital chain?
Dr. Raghuvanshi: One of the biggest challenges when the situation recovers is that we will have to find ways and means to engage with our patients in remote models such as telemedicine and other digital platforms because people are hesitant to come to the facilities. This would be the most important part of how we customize our operations and flow of patients in these hospitals.
The second challenge would be on the supply chain side. As things start to recover, there has been a major disruption both in the manufacture and delivery of the material, and as a result, some of the prices have become asynchronous compared to what it used to be. Standardizing the supply chain will be another major challenge for some time. There would be persistent cost pressures throughout the year, so revenue may recover over the next few months, but cost pressures will continue. Balancing this part will be very important to us.
Question: When Fortis offers teleconsulting, how do you see the answer among doctors and patients? What other technological changes have been adopted by the hospital?
Dr. Raghuvanshi: Telemedicine has been there for a long time, but its acceptability and its adoption has been pretty slow in the past, but now people see the importance of it.
At present, telecommunications consultations constitute a very small part of what the normal level of outpatient consultations would be. The platforms that are currently available to us are not that mature. Since we did not use telecommunications as a great tool, we did not have a specialized platform for it. We are working on evaluating several other platforms to see what will be the most robust.
If chronic patients use these platforms, it is probably a win-win from both sides as it is more effective and convenient for doctors and patients. We have felt that technology can provide a lot of efficiencies, of course there is always a curve where the costs need to be justified.
We have much more use of technology such as virtual meetings, an online training platform for internal learning development, and have also become more digital throughout our entire patient and management interface. However, touch will never be replaced in healthcare and will remain a very important part.
Question: How do you see the handling of new coronavirus outbreaks in India?
Dr. Raghuvanshi: India is doing reasonably well and has been able to flatten the basket extensively and that is a good thing. Due to the efforts made, the incidence of coronavirus has not increased dramatically with mortality relatively lower in India. It is very inspiring for us to see how some of our nurses, administrators and doctors worked during this period.
When the shutdown opens, it will place a lot more responsibility on society and organizations to continue to prevent ourselves and the people around us from the disease.