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The hospitals and labs are working smart in the second wave

As the second wave began, early March 2021 and there was a surge in Covid-19 infections across the country, the healthcare service providers were prepared. Each ensured that, unlike the first wave, this time, their respective non-COVID business grew.

In the last quarter, ending March 2021, Dr Lal PathLabs had ensured that its non-COVID business grew at 26.8 percent YoY, while COVID portfolio contribution to total revenue had seen a decline to 11.2 percent in Q4 FY21, from 21.6 percent in Q3 FY21, due to regulations on pricing of RT-PCR testing. Thyrocare Technologies too witnessed overall revenue growth of 44.8 percent YoY (+6.2% QoQ), driven by normalization in the non-COVID business. Volumes for non-COVID tests grew 28 percent YoY (+21% QoQ) with stable realizations, resulting in regular business growing 28.1 percent YoY (+21% QoQ). COVID-19 related tests witnessed a sequential jump of 33.8 percent in volumes but sharp decline of 44.8 percent in realizations, causing a QoQ fall of 26.1 percent in revenue. Contribution from COVID-19 tests during the quarter stood at ~14 percent of total sales, down from ~20 percent in Q3FY21.

Hospital chains too followed a similar strategy. As medical tourism took a huge hit, elective surgeries were shelved and OPDs suspended;, their revenues, profits, and occupancy, had plummeted during the lockdown from March-September 2020. The hospitals had just begun to somewhat recover in 2QFY21 and 3QFY21, when the second wave struck. With the government capping per-day package rates for COVID-19 treatments in private hospitals, lower Average Revenue per Occupied Bed (ARPOB) per day, and higher Average Length of Stay (ALOS) for COVID patients, large hospitals now took care not to turn the non-COVID patients away. Not only did they build COVID-negative zones and reconfigure ducted HVAC systems, they also launched mobile apps, and aggressively facilitated digital consultations. This was backed by returning non-COVID patients as elective surgeries and cardiology, orthopedic and cancer treatments could not be postponed indefinitely.

In contrast, after the initial shock of the imposition of lockdown restrictions, the smaller hospitals gained from the travel restrictions, and saw their billing increase, as the patients could no longer travel to the larger cities.

As the healthcare facilities focus on breaking the chain of transmission and inoculate as many as the vaccine supplies permit, they are also gearing up for the third wave, which seems a likely certainty now. While hospitals add ICU beds, oxygen-generation plants that augment daily requirement, and upgrade infrastructure; makeshift centres are being set up by corporate houses, NGOs, missionaries, and philanthropic organizations; and some states are allotting funds for converting areas as community centres in each district to dedicated children’s hospitals, while others are putting in place designated Paediatric COVID wings.

The coronavirus pandemic is far from over!

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