COVID-19: Mid, small-size hospitals stare at survival crisis, seek MSME benefits

NEW DELHI: The covid-19 onslaught has raised questions about the survival of small and mid-sized hospitals which have reached out to the Union health ministry for help in availing benefits announced by the Centre for Micro, Small and Medium Enterprises (MSMEs).

These hospitals, provider of about 85% healthcare services in the country, have been bleeding as the pandemic has shifted focus from other services to treatment and management of covid-19.

Small hospitals typically have up to 100 beds, medium-sized hospitals have more than 100 but less than 300 beds, while large hospitals have more than 300.

“The small and mid-size hospitals have suffered major losses and are facing a sustenance crisis. The Indian Medical Association (IMA) reached out to us. For helping the sector, we have spoken to the MSME ministry, that willing to help, said that these hospitals can register in the MSME category. As far as the benefits are concerned, MSME will decide on it,” said Arun Singhal, special secretary, Union Health Ministry.

Finance minister Niramala Sitharaman last month had announced 3 lakh crore emergency working capital facility for businesses, including MSMEs, 20,000 crore subordinate debt for stressed MSMEs, 50,000 crore equity infusion through MSME Fund of Funds, among other measures to help the sector.

“The small hospitals and nursing homes…have been facing acute financial stress due to the sharp fall in people seeking regular treatment and surgeries owing to covid-19. Most of them do not have enough reserves and are facing cash flow challenges to even pay the salaries of their workers,” said Shobha Mishra Ghosh, assistant secretary general, FICCI.

According to a FICCI-EY study released in April, many small hospitals and nursing homes, especially in tier-II and III cities, have been forced to close down since their cash flows had dried-up.

“Many have been almost non-operational due to unavailability of staff or inadequate infrastructure to deal with the covid situation…,” said Mishra, adding that the government should ensure specific measures like funding support and their inclusion under MSMEs to help them survive.

Dr Prathap Kumar N, CMD and the chief interventional cardiologist at Meditrina group of hospitals, Kerala, explained the small hospitals also need to take care of fixed cost amid absence of business. “Even in cases where doctors and other essential and non-essential staff do not report on duty, hospitals belonging to the small and mid-sized category are mandated by law to pay their salaries,” Kumar said.

For instance, for Ujala Cygnus Healthcare Services the impact on revenues started from 15, March and has continued while occucpancy halved. “The gap between the revenue and cost has widened so much that it will take a good amount of time to fill it and also need government interventions,” Dr Shuchin Bajaj, director and founder, Ujala Cygnus Healthcare Services, a mid-size hospital chain in Delhi.

The government had kept the management of covid-19 cases restricted to public sector initially. “Even during lockdown 1 and 2, closure of clinics and routine elective surgeries and administrative erratic orders like penalising a doctor or the nursing home to attend to covid-19 hospitals were sealed and some cases, FIRs were lodged for either handling or for delayed information. This led to fear psychosis and thus closure of these set ups,” Dr Vinay Aggarwal, owner of a small sized hospital in Anand Vihar, Delhi.

A survey conducted by NATHEALTH, an institution representing small and medium hospitals and nursing homes, in 251 healthcare facilities across nine states and 69 cities revealed an 80-90% fall in revenues, with 21% straining to survive. Hospitals in tier 1 and 2 cities have seen 78% reduction in OPD footfalls, and a drop of 79% in in-patient admissions. About 90% of organisations surveyed require some form of financial assistance. –Livemint

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